Strong growth in new seller addition in India despite pandemic: Amazon

Source: E-Retail.economictimes, Apr 9, 2021

NEW DELHI: Amazon India has witnessed a strong growth in seller addition and rise in number of ‘crorepati’ businesses on the platform even during the pandemic-hit year, a top company executive said.

Speaking to PTI, Amazon Global senior vice president and country head India Amit Agarwal said more than 2.5 lakh new sellers have joined since last year, and that the rate at which sellers have come online has gone by 50 per cent post COVID-19.

“There will always be naysayers out there who would not embrace technology but the right kind of people take advantage and embrace technology and (they) are going to come out of it (pandemic) as far more robust digital businesses and serve their customer base, online and offline and in ways that were not possible before,” he added.

Amazon, Reliance Industries and Walmart Inc’s Flipkart are locked in a battle to gain market share in India, where millions of middle-class customers are newly adopting online purchases of food and groceries due to the pandemic. The booming e-commerce market in the country is expected to touch $86 billion by 2024, according to research firm Forrester.

E-commerce companies have pumped in billions of dollars in setting up infrastructure like warehouses and logistics as well as marketing and promotions to woo users to their platforms, especially from tier II cities and beyond.

Asked about allegations that only a few large sellers – especially those where Amazon has invested – are doing well, Agarwal said “the facts speak of a very different reality”.

“You will always have naysayers and disgruntled custodians out there who do not want to embrace technology and that is okay with us, that happens with every disruption…What I’m super excited about is that entrepreneurs in this country are embracing technology and building robust digital businesses,” he said.

Agarwal pointed out that in offline retail too, not all shops are of the same size.

The Confederation of All India Traders (CAIT) has alleged unfair practices by Amazon and had sought a probe into the role of Amazon seller, Cloudtail India and Appario Retail (where Amazon is a stakeholder).

“$3 billion in exports doesn’t happen when genuinely grounds up sellers are not coming online…When more customers come, everybody wins…Last year, the number of sellers who became crorepatis exceeded 5,000 and that number increased year over year by 30 per cent,” Agarwal said.

Therefore, not only is the number of crorepatis increasing, but also the rate at which sellers are becoming greater than one crore in sales, is going up, he added.

On the new e-commerce policy that is in the works, Agarwal said the rules should improve the ease of doing business online and exports and should create a more “predictable and stable environment” that enables long-term investment.

“It’s important to realise that e-commerce is very nascent and small, it’s barely 3-4 per cent of overall retail (in the country). Secondly, it’s having a very meaningful impact in the vision of digitising India, enabling an Aatmanirbhar Bharat as laid out by our prime minister, in bringing exports and job creation,” he said.

Agarwal added that an enabling policy would help increase the rate of growth of the e-commerce industry, which is going to be an important lever for economic recovery and job creation.

“It should improve the ease of doing business online, it should improve the ease of doing exports…it should create a predictable and stable environment that enables long-term investment,” he said.

Agarwal explained that building out infrastructure – that allows the smallest of sellers to benefit – requires investment in areas like warehouses, logistics, cataloging, labelling, imaging and training etc and all of that requires capital.

India open for stronger trade relations with EU: Anurag Thakur

Source:  Economic times of India, Apr 08, 2021

Union minister Anurag Singh Thakur on Thursday said India is open for stronger trade and investment with the European Union (EU). Portugal’s Minister of State for Internationalization Eurico Brilhante Dias called on Thakur ahead of the 5th Joint Economic Commission India-Portugal meeting in Delhi.

The meeting would discuss the ongoing negotiation process of trade and investment agreements between India and the EU, the Finance Ministry said in a series of tweets.

“Indian and Portuguese Prime Ministers share a special bond and both nations have strong ties. India welcomes and is open for trade and investment with the EU,” Thakur, the Minister of State for Finance, said.

Portugal is a member of the EU that comprises 27 nations.

The negotiations between India and the EU on a free trade agreement have been stalled since May 2013, when both sides failed to bridge substantial gaps on crucial issues, including data security status for the IT sector. The negotiations were launched in June 2007.

Vehicle sales remain on the road to recovery in March

Source: Livemint, April 08, 2021

Retail sales of cars and utility vehicles continued to improve in March on the back of sustained improvement in economic activity, despite the surge in coronavirus cases, and a shift in customer preference towards personal mobility to avoid covid-19 infection. A low base effect also aided the growth in passenger vehicle sales during the last month of FY21.

Showroom sales of passenger vehicles increased by 10.11% on a month-on-month (m-o-m) basis to 279,745 units during March, according to sales data released by the Federation of Automobile Dealers Associations (Fada). Sales were also boosted by the long waiting period on popular products because of a demand-supply mismatch.

Retails of passenger vehicles increased by 28.39% from March last year, when sales came to a halt because of the lockdown measures imposed to contain the outbreak of the covid -19 pandemic. Operations had remained suspended till the beginning of May and in some cases early June.

Tractors and passenger vehicles were the only two categories that saw healthy double-digit growth and the lack of growth in other categories can be associated with multiple factors such as the low base of last year, transition from BS-IV to BS-VI norms and India going under total lockdown, according to Vinkesh Gulati, president, Fada.

“A global shortage of wafers, which is an input for making semiconductors, continued to linger around and kept the waiting period for passenger vehicles as high as seven months. According to a Fada survey, 47% of passenger vehicle dealers said they lost more than 20% sales because of supply side constraints,” Gulati said. Retails of commercial vehicles continue to show signs of a pick-up after more than two years, on the back of a faster recovery in economic activity, albeit on a low base. Showroom sales of commercial vehicles increased by 14.15% m-o-m to 63,372 units.

Supporting growth paramount for RBI now: Governor Shaktikanta Das

Source: Business Standard, April 7, 2021

Stating that “growth is of paramount importance now”, the Reserve Bank on Wednesday said it will do whatever it takes to sustain the fledgling recovery by ensuring ample and assured liquidity and cheaper funds to oil the wheels of the economy.

Announcing the first monetary policy of fiscal 2022, the central bank left the key policy rate unchanged at 4 per cent for the fifth time in a row, after the rash of rate cuts earlier last fiscal.

It also assured of an indefinitely long period of accommodative policy stance which was topped by a historic move to commit its own balance sheet to the market with a new liquidity tool called ‘the secondary market government securities acquisition programme’ or G-Sap, under which it will buy government bonds worth Rs 1 lakh crore this quarter.

Addressing the media online, Governor Shaktikanta Das said “as of now growth is of paramount importance…and we’ll do whatever it takes to help sustain the recovery.”

But he was quick to add that “inflation targeting is also important.”

“More importantly, the government reiterating the plus-minus 2 per cent of 4 per cent inflation targeting gives us enough policy space to support growth as there are more downside risks to growth on the horizon now than in recent past which make growth…of paramount importance,” he added.

The central bank chose to retain its last forecast of 10.5 per cent GDP growth this fiscal, saying it is “too early to revise its own forecast done two months ago as we have just entered the new fiscal year.”

Asked why the thrust was on growth despite pencilling in an upward inflation trajectory (5.2 per cent for the first half and 4.4 per cent for the second), and offering an indefinite period of accommodative policy stance, Das said, “We’ll continue to be accommodative till growth becomes sustainable and we will do whatever it takes to achieve that.”

Das continued to explain that “inflation is already in a well-entrenched and well-anchored framework now and so is inflation expectation, that’s also well-anchored. This is very clear from the fact that the government notification has reiterated the plus-minus 2 per cent of 4 per cent inflation targeting.”

“This framework gives RBI enough leeway gives enough policy tools to manage any extraordinary situations like the current pandemic.

“For the time being and at the current juncture, growth is of paramount importance, while of course keeping in mind inflation targeting is also important. After all, the the primary goal of the monetary policy is to maintain a certain level of inflation,” he said.

However, the governor was quick to admit that the inflation outlook is uncertain.

On when the RBI will begin to exit the low reverse repo regime, Das said “that’s something only time can decide. All I can tell you now is that we are accommodative and will remain so till we feel it is needed. So, we will have to wait when we will exit reverse repo.”

His deputy Michael D Patra chipped in saying whenever the reverse repo is in operation, the policy is accommodative, parrying a direct response to a query on the impact of such high liquidity infusion on inflation.

On whether the RBI is anticipating some shocks to the system, Patra said, “We are mindful of the liquidity situation. And we will be mindful of taking a balanced action.”

“To begin with, for the first in history, RBI is committing its balance sheet to the monetary policy under which we are committing to the market that we will give you Rs 1 trillion each quarter (up to Rs 3 trillion this fiscal), whether you want it or not, and irrespective of the market movement we will give you that amount of liquidity through the G-Sap,” he said.

He went on to explain that when the policy rates are left unchanged, other tools are required to run the policy.

Patra said the bond buying is “an upfront assurance and is similar to what other major central banks are doing in buying the best and most secure assets, that is G-secs — the benchmark for the entire money market.”

“We are not leaving anything to the market to guess on the quantum, the timing or the demand or anything else. And this is a commitment to fund it from the RBI balance sheet itself,” Patra said.

On maintaining the GDP forecast at the previous level of 10.5 per cent (26.2 per cent in Q1, 8.3 per cent in Q2, 5.4 per cent in Q3 and 6.2 per cent in Q4), Das said, “It is too early to give a guidance especially now the pandemic situation has become more uncertain due to the recent surge in infections. Also, we are at the beginning of a the new fiscal year.”

“But at the same time I would like to like to say that the current situation is unlikely to impact the economy so much as it did this time last year because lockdowns are very selective this time. Also, many establishments, manufacturing units and businesses are fully operational and are better prepared to face the challenges now. And so are the general public.

“Therefore, we’ve reiterated our 10.5 percent forecast as the situation prevails today; and I don’t think there is any significant upside risks to this as of now. Vaccine is an additional factor on the table which was not there last year. Overall we are better prepared. “So whatever guidance we’ve given so far looks reasonable. Going forward we will be watchful, Das noted.

Growing AI adoption in India, but still some way to go: Romal Shetty, Deloitte India

Source: Economic Times, Apr 01, 2021

While financial services, Hi Tech, telecom, oil and gas, FMCG verticals in India are ahead of the curve in AI adoption, there is huge potential to be tapped in large parts of transport/logistics, retail, education, government, said Romal Shetty, President Consulting, Deloitte India in an interview regarding Deloitte- CII’s recent report titled ‘The Age of with: Humans and Machines’. Edited excerpts:

Are you witnessing trends in AI adoption across certain industries more so than others? If so, what are the key industries where you see major AI adoption?
India is a major developer of AI solutions, and has seen its analytics industry move from dashboards and data warehouses, to advanced industrial and services applications of AI. Across industries, companies are trying to reap the benefits of AI. While financial services, Hi Tech, telecom, oil and gas, FMCG verticals in in India are ahead of the curve in AI adoption, there is huge potential to be tapped in large parts of transport/logistics, retail, education, government, etc.

To democratize AI usage, the Indian Government’s policy think tank, NITI Aayog has been actively working on the #AIforAll program. As part of the Digital India initiative, the Government also intends to leverage AI in healthcare, agriculture and e-governance. Today, solutions are being developed from India for both the domestic and global market.

How have Indian organizations fared in terms of AI adoption when compared to other nations?Indian companies both big and small (Indian MNCs and family-run businesses) have responded at speed to the opportunities that have been thrown up in the past year due to the pandemic disruption – specifically more so in customer facing and manufacturing areas, but also in virtualization of various parts of the enterprise, given the new normal of work, workplace and workforce.

AI has come to be used in the customer facing (sales and marketing, customer experience), operations (supply chain, logistics, manufacturing) as well as support (HR, IT, finance) functions. While a lot of companies have initiated on this journey, there is still some way to go before all of these would be used at scale enterprise wide.

As far as AI is concerned, while India is still behind developed countries, we are seeing a drive towards this direction – India-centric innovation (for India from India). This has increased significantly as lift-and-shift models haven’t really worked given Indian realities.

What type of governance and policy problems occur with increasing AI adoption? Furthermore, could you elaborate on Deloitte’s framework to tackle this?
Despite wide adoption, organizations count ethical risks as one of their top challenges in implementing AI initiatives. Concerns include lack of explainability and transparency in AI-derived decisions, using AI to manipulate people’s thinking and behavior. A well-established governance and ethical model guides organizations to adopt AI more efficiently.

Deloitte’s Trustworthy AI framework is an effective tool in diagnosing the ethical health of AI while maintaining customer privacy and abiding by relevant policies. The key features of the framework put an emphasis on privacy, on AI being fair and impartial, transparent and explainable, the organisational policies being responsible and accountable, keeping systems and stakeholders safe and secure, and AI-driven output being robust and reliable.

Historically, have investors and stakeholders responded positively to companies adopting AI?Companies that are adopting AI are forward looking and ready for change. This has typically been appreciated by investors, all else being equal. For example, we were working with an EPC company which is looking to use AI-driven forecasts in order to look at bid values and walk-away prices for infrastructure bids. Strategic, as well as institutional/retail investors, have looked upon this company with a lens that they will be on another level compared to their peers in delivering shareholder value.

The PE/VC community already has a clear view that AI-driven solutions are valued better, in fact there is a joke that any company AI-driven will necessarily be funded.

Having said that, the story is not the same with all stakeholders. Some  employees have been a bit apprehensive of being shown that machines can potentially do a better job than them, especially in areas where there are long years of experience. It is a potential classical “Deep Blue beats Garry Kasparov” moment, where machines pitted against humans can show better results in many fields (for example, even cancer detection from visual inspection apparently can be done better by AI algorithms than expert doctors).  Also, in many countries, regulators and governments have sought to regulate the usage of AI – whether it is purely AI-driven decision making, for instance for credit card approvals (which may bring in biases), autonomous cars, conversation-AI enabled digital voice assistants answering first line calls at call centres, etc, which can risk bringing up various socio-legal issues as well as create an unfair playing field. Overall, the march of AI like any other technology will have supporters and detractors. However, the technology itself is a revolutionary one, and mankind has to figure out the right ways to use it in a meaningful and positive fashion to improve the lives of citizens and consumers.

Lastly, how can the fear of AI replacing human jobs be remedied? As we call it the “Age of With” where humans and machines together bring disproportionate value, not one or the other. Human creativity, judgement and intelligence is as vital a component as machine intelligence, and therefore we will have both co-exist.  We at Deloitte, looking at Technology Trends, observe three stages towards achieving full utilization of AI. First being assisted intelligence – e.g. a car warning a driver when they change lanes. Second, augmented intelligence – e.g. a car warning a driver when they change lanes and if they do not act in time, it takes the decision on the driver’s behalf. Last, autonomous intelligence – e.g. a car driving itself from source to destination point. While autonomous intelligence forms the holy grail that everyone would want to get to, we believe that most of the AI that assists in decision support on core business issues would fall in the first or second category. That is where AI will not replace humans, but assist and augment the intelligence of humans. It will be humans who will make the decisions based on their judgements.

6-digit HSN code mandatory in invoices for biz with over Rs 5crore turnover

Source: Financial Express. Apr 01, 2021

Businesses with turnover of more than Rs 5 crore will have to furnish six-digit HSN or tariff code on the invoices issued for supplies of taxable goods and services from April 1

Businesses with turnover of more than Rs 5 crore will have to furnish six-digit HSN or tariff code on the invoices issued for supplies of taxable goods and services from April 1, the Finance Ministry said on Wednesday. Those with turnover of up to Rs 5 crore in the preceding financial year would be required to mandatorily furnish four-digit HSN code on B2B invoices. Earlier, the requirement was four-digits and two-digits respectively. “With effect from the 1st April, 2021, GST taxpayers will have to furnish HSN (Harmonised System of Nomenclature Code), or Service Accounting Code (SAC) in their invoices, as per the revised requirement, the Ministry said in a statement.

In trade parlance, every product is categorised under an HSN code (Harmonised System of Nomenclature). It helps in systematic classification of goods across the globe. HSN codes for goods at 6 digits are universally common. Therefore, common HSN codes apply to Customs and GST. Accordingly, codes prescribed in the Customs tariff are used for the GST purposes too. The Ministry said manufacturers and importers/exporters have been commonly using HSN Codes. Manufacturers were furnishing these codes even in the pre-GST regime. Importers and exporters have been furnishing these codes in import/export documents. Traders would mostly be using HSN codes furnished in the invoices issued to them by the manufacturer or importer suppliers.

“A large number of GST taxpayers are already furnishing HS codes/SAC at 6/8 digits on voluntary basis on the invoices, e -way bills and GSTR 1 returns,” it added. AMRG & Associates Senior Partner Rajat Mohan said traders, manufacturers and services providers would be required to give more precise HSN code while issuing an invoice to the supplies with effect from April 1. “This will help tax officers with deeper data analytics for every item supplied and help them in arresting tax evasion emanating from fake invoices and irregular tax credit claims,” Mohan added.

Toyota Kirloskar sells 15,001 units, its highest dispatch during March in eight years

Source: The Economic Times, Apr 01, 2021

Toyota Kirloskar Motor (TKM) on Thursday said it sold a total of 15,001 units in March, registering the highest ever domestic sales in the month of March since 2013. The automaker had sold 7,023 units in March 2020, amid a nationwide lockdown due to the COVID-19 pandemic.

In February this year, the company had reported wholesales of 14,075 units.

“We have been able to sustain the growth momentum as we closed the last quarter registering a 73 per cent growth in domestic sales, when compared to the sales in the corresponding period last year (January-March 2020). In fact, last month witnessed the highest ever domestic sales in the month of March since 2013,” TKM Senior Vice President Naveen Soni said in a statement.

The company’s sales performance in the last quarter proved to be better than the sales in the festive season of the third quarter (October- December 2021), he added.

“The demand for personal mobility still continues to grow as we witness a surge in both enquiries and customer orders thereby registering a 7 per cent growth in domestic sales in March 2021 when compared to the sales in February 2021,” Soni noted.

This reiterates the popularity of the brand amidst customers which has been further enhanced by the two new recent launches of the new Innova Crysta and the New Fortuner, as well as the Legender, he said.

India’s inflation “uncomfortably high”: Moody’s Analytics

Source:, Mar 30, 2021

India’s inflation is at an “uncomfortably high” level, which is an exception among Asian economies, Moody’s Analytics said on Tuesday.

Higher fuel prices will keep upward pressure on retail inflation and keep the RBI from offering further rate cuts, said Moody’s Analytics, a financial intelligence company.

Retail inflation rose to 5 per cent in February, from 4.1 per cent in January. The Reserve Bank mainly takes into account retail inflation while deciding on the monetary policy.

Core inflation (which excludes food, fuel and light) was up 5.6 per cent in February, from 5.3 per cent in January, Moody’s Analytics said, adding India’s inflation is “uncomfortably high”.

In its macro roundup, Moody’s Analytics said inflation is subdued in most of Asia, and expected to only gradually pick up over 2021 because of rising oil prices and economies starting to reopen. Brent crude has climbed 26 per cent this year at around USD 64 per barrel. It was around USD 30 per barrel in March 2020, when the COVID-19 crisis was near its peak.

“India and the Philippines are exceptions. In these economies, inflation is above comfort levels, adding to the list of challenges for policymakers,” it said.

Stating that India’s inflation is “worrisome”, it said volatile food prices and rising oil prices led retail inflation to exceed the upper band of 6 per cent several times in 2020, inhibiting the RBI’s ability to keep accommodative monetary settings in place during the height of the pandemic.

Under the monetary policy framework, RBI has a target for maintaining retail inflation at 4 per cent (+/- 2 per cent).

” RBI is expected to retain its current inflation-targeting band beyond its current expiry date of March 31,” Moody’s Analytics added.

DGFT extends deadline for track and trace system in pharma exports till April 1, 2022

Source: The Hindu Business Line, Mar 30, 2021

The Directorate General of Foreign Trade (DGFT) has extended the deadline for implementation of the track and trace system in pharma exports till April 1, 2022.

A public notice has been issued by the DGFT in this regard.

According to the DGFT’s previous order, the system was to be implemented from April 1, 2021.

“With this, the date for implementation of Track and Trace system for export of drug formulations with respect to maintaining the Parent-Child relationship in packaging levels and its uploading on Central portal has been extended till April 1, 2022,” R Uday Bhaskar, Director General, Pharmaceutical Export Promotion Council told BusinessLine. The Pharmexcil had earlier represented to the Commerce Department on the difficulties expressed by its member exporters with respect to the implementation of track and trace and had requested for an extension of timeline.

Centre tightens rules of grant allocation for transparency, efficiency

Source: Business Standard, Mar 31, 2021

New Delhi: The government has enforced new rules that will change the operating procedure for Centrally Sponsored Schemes (CSS). The new rules will tighten the procedure for grant allocation and increase the scrutiny on utilisation of funds disbursed, according to report in the Economic Times .

The Department of Expenditure order, dated March 23, vouches for “more effective cash management and bring more efficiency in public expenditure management”, said the report.

From July 1, 2021, all the state will have to set up a Single Nodal Agency for each Centrally Sponsored Schemes. The states will have to open with an account in a commercial bank to carry out their government business. If reqiued, separate SNAs may be created for sub schemes of an umbrella scheme.

All Union ministries and departments will release the central share for each CSS to a state government’s account held in the RBI for further release to this SNA account.

Then, the state governments will transfer the Central share within 21 days and release its own share within 40 days of the release of the Centre’s share.

CSS had become one of the largest financial outgo for the Centre. Several committees and finance commissions have recommended pruning and rationalisation to increase its effective. The time lag in release of grants, poor utilisation of funding and parking of funds in states for interest are among the issues red-flagged.