Bharat Rakshak

The Organization for Economic Cooperation and Development (OECD) on Wednesday pegged India’s FY23 economic growth at 6.9 per cent, the lowest by a major bank or institution, saying the country had been adversely affected by Russia’s invasion of Ukraine.

“As an importer of energy, fertilisers and edible oils, India is adversely affected by the war in Ukraine. Gross domestic product (GDP) growth, which reached 8.7 per cent in FY22, is projected to slow to 6.9 per cent in FY23 and 6.2 per cent in FY24, with weaker external demand growth and tighter monetary conditions being mitigated by strong government spending and an ambitious set of measures to simplify the business environment,” OECD said in its June global macroeconomic report.

The institution said that headline inflation is projected to ease gradually, though remaining above the central bank’s upper tolerance limit of 6 percent throughout 2022 and 2023.

Fitch Ratings has revised the outlook on India's long-term foreign-currency Issuer Default Rating (IDR) from “negative” to “stable” on diminished downside risks to medium-term growth. It affirmed the IDR at 'BBB-'.

The revision in outlook reflects India's rapid economic recovery and easing financial sector weaknesses, despite near-term headwinds from the global commodity price shock. “We expect robust growth relative to peers in order to support credit metrics in line with the current rating,” Fitch said in a statement.

Firstly, the linking of credit cards with UPI will have a direct bearing on the number and volume of transactions. UPI, on debit payments alone and contrary to the hopes and expectations of many, breached the Rs 10 trillion mark in May 2022, with the number of transactions inching towards 6 billion. However, even with a debit facility alone, there are reasons to be bullish on the UPI volumes, and the numbers could go as high as 50 billion per month in another four-five years. The credit card integration is only going to accelerate this push.

Two, there is now an opportunity for banks and other financial institutions to go big on digital credit cards. Already, some applications and platforms offer a pay later facility. In the United States, Apple, through an in-house subsidiary, will soon begin experimenting with a digital credit card for the services within its ecosystem.

The ideal endgame for India’s pursuit of financial inclusion is to ensure personalised access to formal financing products. The building blocks have already been put in place in the last eight years, starting with Aadhaar, Jan Dhan accounts, the digital payments on mobile connected to the first two components, and most importantly, the account aggregator framework. Thus, a steady increase in the adoption of the account aggregator framework is expected, given financial institutions will seek elaborate information on first-time borrowers.

With the open network for digital commerce coming into play soon, having users choose from a wider option of payments, easing their access to credit and allowing financial institutions to create customised financial products that may offer a loan of as little as Rs 1,000 for a week to Rs 5,000 for a month, the marketplace for e-commerce will also receive a big boost, especially for the vendors.

There is also the worry of predatory lending to desperate first-time borrowers at high interest rates, as was the case during the 2008 financial crisis when everyone could access NINJA (no income, no jobs) loans. For the loan providers, this is an opportunity to garner data which they later sell to third parties or to enable harassment for the borrower. Awareness must always be the key to customer-friendly regulations for financial institutions willing to sign up to make credit offerings in the future.

The UPI framework is merely getting started, even at 6 billion transactions per month, even with only RuPay credit cards linked to the UPI IDs, but the potential for the entire ecosystem, with each block powering a specific purpose, is huge. It only gets bigger, better, and bolder from here.

Retail inflation eased to 7.04 per cent in May, mainly on account of softening food and fuel prices as the government as well as the RBI stepped in to control spiralling price rise by way of duty cuts and repo rate hike.

However, the inflation print stayed above the Reserve Bank's upper tolerance level of 6 per cent for the fifth month in a row.

The Consumer Price Index (CPI) based retail inflation was 7.79 per cent in April. In the year-ago month of May 2021, retail inflation stood at 6.3 per cent.

Inflation in the food basket in May 2022 was at 7.97 per cent, down from 8.31 per cent in the previous month, as per data released by the National Statistical Office (NSO) on Monday.

The food basket has weightage of 39.06 per cent in the overall Consumer Price Index.

As per the data, the inflation print in 'cereals and products' segment eased to 5.33 per cent in May as against 5.96 per cent in the preceding month, while that for 'oil and fats' softened to 13.26 per cent from 17.28 per cent.

In yet another boost to the Unified Payments Interface (UPI) and Rupay, union communications and electronics & information technology minister Ashwini Vaishnaw has announced that UPI and Rupay cards will soon be accepted in France. According to a report by ANI, The National Payments Corporation of India International (NPCI International), the international arm of National Payments Corporation of India (NPCI) has signed a memorandum of understanding (MoU) with Lyra Network, a French payment solutions company. As part of the MoU, Lyra Networks will allow Indians to pay using UPI and Rupay cards at terminals and machines offered by Lyra Networks, making it easier especially for students and tourists from India to make payments.

The duration of the journey is less than 25 days, as opposed to the approximately 40 days it now takes to move cargo from Russia to India through the Baltic Sea – North Sea – Mediterranean Sea – Suez Canal – Red Sea -Arabian Sea route

Kaivalya wrote:https://www.opindia.com/2022/06/russia- ... route/amp/

International North-South Transport Corridor: Russia sends test consignment to India through Caspian Sea – Iran route avoiding Suez Canal

The duration of the journey is less than 25 days, as opposed to the approximately 40 days it now takes to move cargo from Russia to India through the Baltic Sea – North Sea – Mediterranean Sea – Suez Canal – Red Sea -Arabian Sea route

Four Indian companies — namely TCS, HDFC Bank, Infosys and LIC — were featured among the top 100 global biggest brands, along with companies like Apple, Google, Amazon and Microsoft.

TCS was the most valuable brand coming out of India, which sat on the 46th spot of the list. The company’s brand value is estimated to be $50 billion by Kantar Brands 2022, the author of the ‘Most Valuable Global Brands’ report.

Its counterpart Infosys, a latest entrant in the list, was ranked at 64th position as its brand value lingered at $33 billion. Wipro —which is one of the top IT firms in India along with TCS and Infosys — was missing from the top 100 list.

Meanwhile, HDFC Bank stood at the 61st rank as the second biggest brand from India. LIC — which recently held India’s biggest public issue of ₹21,000 crore — was at the 92nd spot, with a brand value of $23 billion.

Kaivalya wrote:https://www.opindia.com/2022/06/russia- ... route/amp/

International North-South Transport Corridor: Russia sends test consignment to India through Caspian Sea – Iran route avoiding Suez Canal

The duration of the journey is less than 25 days, as opposed to the approximately 40 days it now takes to move cargo from Russia to India through the Baltic Sea – North Sea – Mediterranean Sea – Suez Canal – Red Sea -Arabian Sea route

nandakumar wrote:The Sterlite plant needs a local strongman to handle the activists led opposition in Tuticorin. He, in all probability would be financially (indirectly of course) and politically supported by the present ruling dispensation in TN. It is advantage VV Minerals- owned by a powerful local entrepreneur.

Arima wrote:

nandakumar wrote:The Sterlite plant needs a local strongman to handle the activists led opposition in Tuticorin. He, in all probability would be financially (indirectly of course) and politically supported by the present ruling dispensation in TN. It is advantage VV Minerals- owned by a powerful local entrepreneur.

it better not be VV, by all definition he is BIF.

Jammu and Kashmir will be hosting the G-20 summit in 2023.

G-20 brings together the world's major economies.

Union Territory government on Thursday set up a five-member high level committee for overall coordination.

According to the MEA, India will be part of the G20 Troika (preceding, current, and incoming G20 Presidencies) from December 1, 2021 till November 30, 2024.

G20 brings together 19 of the world’ leading economies and the European Union, with its members accounting for more than 80 per cent of global GDP, 75 percent of global trade and 60 percent of the global population, according to the MEA.

G20 member nations are Argentina, Australia, Brazil, Canada, China, Germany, France, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States.

g.sarkar wrote:Actually methane is not produced by gobar gas plants. It is produced by the digestive system of cattle and normally escapes into the atmosphere. Gobar gas plants just burns methane after it is caught in a digester, where gobar is placed. Fertilizer is also produced as a biproduct. It was not very successful in India, but it did take off in China, if I remember correctly.
Gautam

g.sarkar wrote:Actually methane is not produced by gobar gas plants. It is produced by the digestive system of cattle and normally escapes into the atmosphere. Gobar gas plants just burns methane after it is caught in a digester, where gobar is placed. Fertilizer is also produced as a biproduct. It was not very successful in India, but it did take off in China, if I remember correctly.
Gautam

For more than a decade, Silicon Valley’s moguls have been promoting Bitcoin and blockchain-based cryptocurrencies, claiming these will transform global commerce. Instead, Bitcoin long ago died as a digital currency, becoming nothing more than an empty speculative asset with its value most recently plunging from $60,000 to less than $20,000. Meanwhile, as those same hypesters now promote a mystical Internet world called Web3, India is racing ahead and implementing what the crypto crowd had promised—with its Unified Payment Services (UPI).


A French company, Lyra Network, just announced it would deploy UPI. Entrance into the European Union is just the latest international move for UPI, an alternative payments system designed to be secure, reliable, and interoperable among different payment companies. Merchants in Singapore, Malaysia, Thailand, Philippines, Vietnam, Cambodia, and Bhutan, accept UPI payments through QR-code payment systems common in Asia. The National Payments Corporation of India is now negotiating with Australia to integrate UPI with Australia’s own nascent fast payment rail, called New Payments Platform.

The reason for its broad adoption abroad is that UPI has been shown to work well for a very large population. In addition, UPI has an open protocol upon which other technologies can be built, creating a much larger and more useful network than its competitors for financial payments. By facilitating exactly what blockchain was supposed to do—cutting out intermediaries and inducing greater competition—UPI could force a global acceleration of innovation in payment technology.

Because UPI transactions are presently free and will eventually cost only a tiny fraction of what merchants and consumers pay to move money on private payment systems such as those run by Mastercard and Visa, the UPI payment rails could boost GDP in India by a meaningful amount. As for security, UPI was also designed to require strong two-factor authentication, making it more impervious to fraud than the older systems in richer countries.

As a result, whilst blockchain may have been all the rage in Silicon Valley, UPI has become a global favorite. Facebook, Google, and Walmart have all given UPI a direct or indirect vote of confidence: Payment subsidiaries of all three giants are using UPI to help customers in India make payments. So good is UPI that Google brought it to the U.S. Treasury Department as an example of good implementation of open payments standards and technology.

Ambani’s first-born, Akash, 30, will succeed him as chairman at India’s No.1 wireless carrier Reliance Jio Infocomm Ltd. The patriarch, who resigned from the Infocomm board, will continue to helm Jio Platforms Ltd., which owns all digital assets including the telco. This is probably a stopgap arrangement until Jio Platforms, whose investors include Meta Platforms Inc. and Alphabet Inc., concludes its much-awaited initial public offering. Since telecom carriage is entwined with commerce — Ambani’s Reliance Retail runs India’s largest network of stores while his JioMart is a federation of mom-and-pop shops looking to sell online — Akash’s twin sister Isha is widely expected to head it.

In such a scenario, the 27-year-old Anant — the youngest of the three children — will likely preside over the legacy oil-to-chemicals business. But with a twist: He has to complete his dad’s pivot away from polluting hydrocarbons and toward cleaner energy sources like solar panels, sodium-ion batteries and, most importantly, green hydrogen at under $1 per 1 kilogram within a decade, or what his dad calls the 1-1-1 target.

New Round of Industrial Transfer: The Reasons

Chinese commentators argue that unlike the labour-intensive industries (clothing, furniture, etc.) that relocated from China in the last decade, the latest pull-out appears to be dominated by technology-intensive industries. Three main reasons have been put forward to explain this trend:

First, this is part of the natural process of industrial transformation where low-value industries flow towards countries with lower labour and land costs. Second, challenges in the external environment such as geopolitics and the pandemic have made operating in China untenable, forcing many foreign-funded enterprises to opt for a “China+1” operation model. Third and most importantly, Sino-US trade frictions which have been intensifying since 2018, and have greatly impacted important sectors like electronic components. The US-China trade competition is viewed by some as the biggest driving force for multinational companies to leave China, with high-end manufacturing moving to the US and low-end industries relocating to Vietnam and India.

China sees two big winners: Vietnam and India

Chinese experts are of the opinion that in the past few years, the manufacturing capabilities of emerging economies like Vietnam, India, and Indonesia, have started to catch up with China. For example, while China used to be the global mobile phone manufacturing hub, accounting for 75% of the world’s mobile phone production in 2016, its share fell to 67.4% in 2021 as production centres began to move to alternative locations like India and Vietnam.

In the Chinese assessment, Vietnam has been the biggest beneficiary of this round of industrial transfer from China. Between 2019 and 2021, Vietnam's exports to the US increased by almost 25% to US$96.3 billion. Notably, the export of items like computers, electronic products and their parts exceeded US$10 billion, demonstrating the impressive growth of Vietnam’s high-tech manufacturing sector.

On the other hand, India has emerged as a key destination for low-value industries leaving China, particularly mobile phone manufacturers. Many have been attracted by India's low labour cost and high tariff policy. The supply chain of global brands like Samsung and Apple, as well as Chinese companies like Oppo, Vivo, Xiaomi, Lenovo, TCL, Haier, Midea and other electronics and home appliance industry chains have taken root in India.

“Cooperative Vietnam” v/s “Competitive India”

Undeniably, the outflow of industries will be a blow to the Chinese economy. However, some Chinese experts believe that the negative impact to China would be far less if these industries relocated to Vietnam rather than India. After all, Vietnam is constrained by a small domestic market, meaning that it could only play a minor role as a processing and transhipment hub in the global electronics industry chain. Thus, China need not feel threatened by the loss of manufacturing to Vietnam, and could still treat it as an extension/spill over of China's economic space, as an expansion of the international influence of China's industrial chain.

In a big boost for the government's 'Make in India' initiative, the import of toys has gone down by 71 per cent while the export has shot up by 61 per cent over the last three years.

For HS Codes 9503, 9504, and 9505, the import of toys to India has reduced from USD 371 Mn in FY 2018-19 to USD 110Mn in FY 2021-22 thus showing a decrease of 70.35 percent.

The imports of toys under HS codes 9503 (tricycles, scooters, pedal cars and similar wheeled toys; dolls' carriages, dolls, puzzles etc), 9504 (video game consoles and machines, articles for funfair, table or parlour games etc), and 9505 (festive, carnival or other entertainment articles, including conjuring tricks and novelty jokes) have reduced from $371 million in FY 2018-19 to $110 million in FY 2021-22, showing a decrease of 70.35 percent.

Meanwhile, the exports of the aforementioned toys have increased from $202 million in FY 2018-19 to $326 million in FY 2021-22, up by 61.39 percent, a Commerce Ministry release said on Tuesday (5 July).

The trade deficit during the first three months of this fiscal widened to USD 70.25 billion from USD 31.42 billion in the year-ago period.

Crude oil imports in June soared 94 per cent to USD 20.73 billion. Coal and coke imports surged to USD 6.41 billion in June 2022 as against USD 1.88 billion in June 2021.

Gold imports during the month rose sharply by 169.5 per cent to USD 2.61 billion.

On the exports front, outbound shipments of petroleum products rose by 98 per cent to USD 7.82 billion. Gems and jewellery shipments increased by 19.41 per cent to USD 3.37 billion.

Commenting on the numbers, ICRA Ltd Chief Economist Aditi Nayar said that despite an expected fall in gold imports, the merchandise trade deficit widened further to a ''worrying'' level in June, with a sequential dip in exports.

''With a steady uptick in the size of the merchandise trade deficit over the course of the quarter, we expect the current account deficit to more than double to USD 30 billion in Q1 FY'2023, from the modest USD 13 billion in the previous quarter,'' she said.

The export growth was constrained by the base effect as well as the contraction posted by engineering goods, drugs and pharma, cotton yarn, she added.

Citing the coal supply shortage and high power consumption, the Coal Ministry on 7 July said it is mulling to start production of 12 new coal mines by 2022-end. Currently, a total of 36 captive and commercial mines are under production.

of the fiscal year 2022-23 which looks robust despite disruptions, expectations of monetary tightening and heightened inflation expectations, a CRISIL analysis of over 300 companies rings a note of caution. It indicates that corporate profitability — which is earnings before interest, taxes, depreciation and amortisation (EBITDA) margin — may have seen a 200-300 basis points fall in first quarter (Q1) financial year 2023 (FY23), on an year-on-year basis.

However, it estimates growth in corporate revenue by 30 per cent year-on-year (YoY) in the first quarter of the fiscal on the back of volume gains largely triggered by recovery in economic activity.

Carrying over the positive note in a survey reflecting company prospects, 44 per cent of the 136 top CEOs polled by the Confederation of Indian Industry (CII) at its second national council meeting projected revenue growth of their firms in the range of 10-20 per cent during first half of FY23, followed by another 32 per cent of the CEOs who anticipated a bigger jump in revenues, to the tune of more than 20 per cent during the same period.

The optimism extended to profits as well, with 45 per cent of the CEOs indicating that their company’s profit growth is likely to increase more than 10 per cent, closely followed by 40 per cent of CEOs who felt profit growth may be up to 10 per cent, during first half (H1) FY23.

However, the overall buoyant profit outlook is underlined by the concern, of 46 per cent of the CEOs polled, over rising input prices affecting their profits between 5-10 per cent during H1 FY23. Another 28 per cent of CEOs expect a bigger hit to their profits in the range of 10-20 per cent.

On the external front, while a large share of the CEOs expect a further depreciation in the rupee and expect it to stand at more than Rs 80/US dollar during H1 FY23, a sizeable 55 per cent of them also expect their exports to benefit and perform better in H1 FY23 versus last year’s levels.

On the imports front, about 50 per cent of the CEOs indicate mild to moderate disruption in supply of inputs during the first half of the current year compared to first half of last year but having diversified majority of the procurement away from China, industry is banking on the opportunities during these disruptions in terms of enhanced exports or new export opportunities.

Another encouraging factor, as highlighted by the CII poll, is the expectation of improvement in rural demand in H1 FY23 as against the corresponding period last year.