Exide Industries on Wednesday said its subsidiary has executed a sales agreement in Bengaluru to set up a lithium ion battery cell manufacturing facility. Exide Energy Solutions Ltd NSE 2.85 % (EESL) has executed the lease-cum-sale agreement with Karnataka Industrial Areas Development Board (KIADB) for procuring land parcel in Bengaluru, the company said in a regulatory filing.
The plant would be used to set up multi-gigawatt Li-ion battery cell manufacturing facility for the new-age electric mobility and stationary application businesses in India, it added.
A new cross-party UK parliamentary panel has been created to promote trade, investment and people-to-people ties with India, backed up by British Indian think tank 1928 Institute.
The India (Trade and Investment) All Party Parliamentary Group (APPG) was formally registered last week as part of celebrations of the 75th anniversary of India’s independence and is made up of 25 members of Parliament and peers of different political affiliations.
With a stated goal to promote trade and investment between India and the UK for the mutual betterment of their citizens, whilst building an inclusive living bridge between the two countries, the new APPG hopes to support the ongoing India-UK free trade agreement (FTA) negotiations and promote its benefits once concluded.
“Given 75 years of India’s Independence, the creation of an All-Party Parliamentary Group focused on India will set the tempo between the UK Parliament and India/Indians,” said Navendu Mishra, Indian-origin Opposition Labour Party MP for Stockport in north-west England and Co-Chair of the new APPG.
“Investment in people is the best way to ensure economic stability and this APPG intends to benefit the peoples of both the UK and India. In particular, I’m looking forward to bringing investment to Stockport and to the Greater Manchester region, both from stronger cultural ties and from utilising the trade agreement,” he said.
“Furthermore, what better way to celebrate the 75 years of Independence then to strengthen the living bridge between the countries and to solidify an equal partnership between these two great nations,” he added.
From trips across different parts of Britain to visits to India, the India (Trade & Investment) APPG said it will work with diverse stakeholders and encourage beneficial collaborations.
“It’s a new chapter in the story of the Indo-British trade partnership and I’ll be working tirelessly to ensure that we get the best possible FTA and that it is utilised after. The group’s establishment coincides with the 75th year of India’s Independence and it will be a parliamentary driving force behind the UK-India story in the years to come,” said Lord Karan Bilimoria, Indian-origin businessman and Co-Chair of the APPG.
“This APPG will be the conduit which not only connects UK and Indian policymakers but connects businesses and entrepreneurs to drive growth. The APPG will ensure that dialogue and engagement will cut across all levels of business, particularly encouraging a wider lens on female led business and start-ups,” added Baroness Sandy Verma, the President of the new group.
The APPG is chaired by Conservative Party MP Bob Blackman and includes other Indian-origin parliamentarians as vice-chairs, including Lord Meghnad Desai, Baroness Usha Prashar, Labour MP Virendra Sharma and Tory MP Gagan Mohnidra.
“We are honoured to facilitate the APPG as its Secretariat and look forward to collaborating with diverse partners to champion trade, investment, and development,” said the 1928 Institute, a University of Oxford spinout focussed on Indian diaspora research in the UK.
“We intend to create an energised, inclusive, and pluralistic space to accelerate the improvement of material conditions for all. Our vision spans opportunities from Pembrokeshire to Punjab, and we encourage you to get in touch to help shape this nascent space,” it said.
The new APPG will officially kick-start its activities when Parliament resumes after its summer recess under a new Prime Minister in September.
APPGs are informal, cross-party groups in the UK formed by MPs and members of the House of Lords who share a common interest in a particular policy area, region or country and have no official status within Parliament.
Ease of Doing Business for MSMEs: The government has now set a target of procuring all of its goods and services through the public procurement portal Government e-Marketplace (GeM). It aims to make 100 per cent procurement through GeM by the end of the current financial year and 75 per cent by August 15, according to a statement by Commerce Ministry.
Chairing a review meeting of GeM on Friday, Commerce Minister Piyush Goyal “emphasized that Prime Minister has set a target of 75 per cent procurement to be made through GeM by the 15th of August and 100 per cent by the end of the current financial year,” the statement said. Over 50 central government ministries and 50 central public sector enterprises (CPSEs) were invited to share their feedback on buying from GeM which was launched in August 2016.
While the current share of the government’s procurement from GeM could not be ascertained but Commerce Secretary BVR Subrahmanyam in August last year noted that the portal tapped only 5 per cent of the total government purchases of around Rs 20 lakh crore a year even as it has helped save 10 per cent in cost — around Rs 10,000 crore in a cumulative procurement of Rs 1 lakh crore in five years. The secretary was speaking at the CII’s National Public Procurement Conclave.
Goyal further noted that procurement data generated on GeM will help the government in improving transparency and efficiency in public procurement. Moreover, the aggregation of demand via the procurement model through a single portal will also help in reducing the cost of procurement for the buyers. “With collective wisdom and collective efforts of all stakeholders, GeM can well become the largest marketplace for public procurement in the world,” he added.
The gross merchandise value (GMV) of GeM has jumped 178 per cent from Rs 38,280 crore in FY21 to Rs 1,06,760 crore in FY22. The portal is aiming to double its turnover to Rs 2 lakh crore in FY23. “This growth of Rs 1.06 lakh crore is 17 times more than the first year when GeM came into being and almost 55 per cent of the cumulative (turnover) in the previous financial (year). This shows excellent growth from MSMEs, PSUs, and states,” GeM Chief Executive Officer Prashant Kumar Singh had said at MSME Business Conclave organised by Financial Express Digital in June this year.
GeM has around 61,440 government buyer organizations and about 47.99 Lakh sellers and service providers with a listing of more than 41.44 lakh products and 1.9 lakh services.
The Department of Telecom has floated a consultation paper on the revamp of telecom rules mainly to keep pace with the change in technology like 5G, simplify laws and promote investments, according to an official document.
The new rules will not be applicable with retrospective effect to cause any adverse impact on the relevant entity, according to the consultation paper. “A new law on telecommunication needs to aim at establishing an enabling future-ready framework for the development of telecommunication sector and deployment of new technologies. Such a law needs to consolidate the existing laws governing telecommunication sector, while keeping in view global best practices,” the consultation paper dated July 23 said.
The government has proposed that the new framework should be drafted in a plain and simple language so that any citizen is able to understand the rules. The proposed law is envisaged to provide adequate provisions to ensure regulatory certainty and promote investment.
“This would mean continuity of licenses and authorizations under the old regime. To minimize policy disruption, such a law needs to provide for continuation of rules, guidelines, administrative orders issued under the existing regime until superseded by new rules. Furthermore, a new law needs to ensure that the terms and conditions will not be modified with retrospective effect to the detriment of the relevant entity,” the paper said. The proposal has come at a time when the country is gearing up to start a spectrum auction for rolling out 5G services. Along with existing players like Bharti Airtel, Reliance Jio, and Vodafone Idea, Adani Group has applied to bid for the airwaves and enter the wireless telecom services business. The government has proposed to come up with rules for the surrender of the spectrum that has been missing under the existing framework and entities that have shut business or are under the process of liquidation have not been able to gain from their spectrum holding. Under the new framework, the government plans to relax penal provisions and make them proportionate to offences. The DoT officials at present impose the highest permissible penalty of Rs 50 crore per offence to avoid alleged biasedness in their work and save their neck from any subjective interpretation of law enforcement agencies or the auditors. The government is looking to expand the funding scope of the Universal Services Obligation Fund (USOF) from just rural telecom projects to urban areas as well including research and development projects, training activities etc. The DoT has fixed August 25 as the last date for comment on the consultation paper.
European Auto component major Behr-Hella Thermocontrol GmbH (BHTC), a leading player in the climate control and thermal management solution, expects India to grow at double the pace of its global businesses. The company plans to tap into the growing domestic market and use it as a critical sourcing base for EVs.
The global board had visited the country to inaugurate the new manufacturing facility in Pune. In an exclusive interview with ET, Michael Jaeger, CEO of BHTC Group, stated that India will be amongst the fastest growing market for BHTC globally.
“We expect India to grow at a CAGR of 15% in the next five years, as against a plan of 7% growth we expect globally. The new facility will cater to the growing demand in the country but will also be a key strategic export hub for our thermal management system and automotive displays or Human Machine Interface solutions,” said Jaeger.
The company has committed Rs 100 crore to expand a new facility in Pune.
The German auto component maker expects the share of Indian business to double to about 10% of its total revenues and profits in the next five years. BHTC believes that the shift towards electrification only adds to the opportunities for the company to grow, and its content per car is only set to grow in the coming years. The share of exports which is merely 5% of its total business at present is likely to shoot up to 25% by 2025.
This location will grow on the manufacturing side and R&D side. The company will be hiring about 150-200 engineers to participate in global development of projects, “The big growth plan for the global development from India. The centre of competency here will also work on software development for global projects,” added Jaeger.
BHTC’s engineers in India are already working on the latest technologies and innovations for our local and global customers. With the expansion, BHTC aims to accelerate the global development activities in the coming months and ramp up our R&D strength to about 300 very soon.
As a global centre of competency for advanced climate control and HMI solutions, BHTC continues to leverage their local expertise to provide end-to-end, innovative and cost-effective solutions to their global and local customers.
The head of BHTC believes that the change in the interiors is becoming a “key differentiator or USP” in the automotive industry, which puts BHTC in a very good position given its products that are very well integrated into functionalities of the future cars.
“We sincerely believe that the Indian automotive industry can play a key role in the global industry. Having a strong presence in India will play a key role in the future of BHTC,” added Jaeger.
The facility in Pune already specializes in end-to-end product development and manufacturing of advanced HMI and Climate Control Panels for leading automotive OEMs in India and across the Globe. The facility houses an advanced testing and validation centre, global R&D centre, global IT and shared services under one roof.
As e-commerce in India gathers momentum, technology in its varied dimensions remains the main driving force behind online marketplaces. Given the central role of technology in markets across the globe, industry analyst Benedict Evans has compared it to the solar system. Here, smartphones are akin to the sun while all other elements orbit around these smart devices.
Going by a Cisco study, India will be home to more than 800 million smartphone users this year with these devices driving 44 per cent of its total internet traffic. Moreover, the proliferation of smartphones will result in per capita data consumption touching almost 14 gigabytes in 2022 from 2.4 GB in 2017, the world’s highest growth rate, notes Cisco’s ‘Visual Networking Index’.
E-commerce to M-commerce
Considering the demographic dividend that accrues from India’s population of almost 1.4 billion, mobile apps hold immense significance in e-commerce, which could more accurately be called m-commerce or mobile commerce. Since apps offer ample opportunity for personalisation, they help e-commerce players understand consumers better while communicating more frequently with them and targeting these cohorts with relevant products according to their browsing history. Almost 25 million new smartphone users are being added every quarter in India, highlighting the importance of apps and m-commerce.
Meanwhile, driven by pandemic-linked tailwinds that nudged millions of consumers and retailers into embracing digital transactions, the country has now transformed into a mobile-first economy, as per the Annual Mobile Marketing Handbook 2021 from InMobi. Thanks to these trends, the country accounted for approximately 11.6 per cent of all app downloads around the world in 2021, according to a recent report by App Annie.
As per the same App Annie report, Indian consumers spend almost 5 hours a day on mobile apps. This can also be attributed to the emergence of m-commerce app categories such as gaming, health & fitness, entertainment, edtech, long- and short-form video content and hyperlocal delivery gaining prominence after the pandemic. The availability of these apps in vernacular languages also plays a pivotal role in empowering content creators and consumers.
Retailers need to jump on the bandwagon
There is no doubt the pandemic has transformed consumer habits, impacting marketing strategies in a major way. Consumer preference for mobile-first services seems poised to drive a transition towards an app-based economy.
With India transforming into a mobile-first economy, retailers who successfully deploy apps will make greater headway in the highly competitive marketplace. To derive positive outcomes, app developers must focus on developing lighter apps with minimal loading times, so users enjoy relatively seamless experiences. But even while keeping the apps lean, they need to ensure great content for an engaging consumer experience.
Developers should also customize apps for different cohorts of users. This is particularly important because companies are seeing an increasing number of orders originating in tier-II and tier-III cities, emphasizing the importance of multilingual and regional language content. The comfort of conversing or transacting in their language facilitates higher conversion in non-metros.
M-commerce allows consumers to order anything at any time from anywhere. Ordering products or services from home saves time, money and effort, especially during the pandemic when consumers are avoiding overcrowded malls and markets.
As a result of evolving consumer habits, using apps to generate greater leads and conversions is not a choice for retailers any more. Rather, it is imperative if retailers do not wish to be left behind in the ongoing battle for gaining, retaining and growing their market share, even as a significant percentage of retail businesses shift from offline to online.
With the e-commerce user base growing Y-O-Y, even SMEs are realising the importance of apps to expand their customer base. After all, there is no better way of reaching out to consumer cohorts 24×7 from anywhere, anytime.
(Sanjeev Barnwal is the founder and CTO of Meesho)
FINANCE Metaverse unfolds a new dimension, a new universe – a space where our real world, augmented reality, and virtual reality intersect, seeding an immersive and collaborative shared virtual 3D environment. In the metaverse-sphere, cryptocurrency and digital art, namely non-fungible tokens, are commonplace. While technocrats, gaming platforms and social media fans are busy talking about the extraordinary experience one will witness in the metaverse, people are looking at alternative digital possibilities and eager to find new pathways to seamless financial transactions.
Sighting the near future, Metaverse has not only become the new favourite of large technology companies, but also the new favourite of the investment industry.
Digitally acquired fintech solutions are revolutionising how transactions are carried out in real life. With cashless transactions witnessing an upswing, these will form the basis of financial transactions carried out in the metaverse – forming the backbone of the huge economic metaverse ecosystem.
Metaverse is expected to become an important digital platform for personal and business interaction. In fact, financial data management and financial transaction management that match real life scenarios provided by financial technology solutions will contribute to the meta-universe, making the meta-universe as indispensable as a real life situation.
To make this new environment as immersive and realistic as possible, the ability to manage finances and transactions intricacies will be critical. The pandemic encouraged people to interact and pay digitally more than ever before. As a result, fintech adoption boomed worldwide.
Based on the current blockchain technology, cryptocurrencies exercise better security, seamless transactions, reduce settlement processes and provide efficient transactions, establishing cryptocurrencies as the official payment method in the metaverse and eliminating the use of the various currencies to carry out financial transactions entirely. However, each cryptocurrency performance will have to be gauged in the metaverse towards becoming the preferred standardised choice for carrying out transactions.
Following a similar pattern to digital wallets, the only difference is that metaverse wallets will help store cryptocurrencies. The wallet can be used for carrying out financial transactions one does in real life. For example, the metaverse wallets can be used to buy and sell products, like NFTs or virtual real-estate, on the metaverse platform. Similarly, it can also be used for receiving or transferring tokens between users within the metaverse.
Helping customers analyse real-world financial decisions in the virtual world by recreating those scenarios in the metaverse by using ‘gamification’ can boost financial literacy while eliminating the risks with real, hard-earned money. Inculcating the concept of gamification, financial institutions can leverage financial literacy among individuals. With the quest to attract yet retain its consumer base, fintech services create applications targeting the younger generation to better grasp various financial concepts like budgeting, taxation, investing, stock trading and even buying properties.
Virtual employee onboarding and training
With the pandemic leading to the adoption of remote work, the real scope of interaction and socialising between employees has become limited to a screen. Owing to enhancing the user experience of financial service professionals, these institutions can create a virtual office in the metaverse where the employees and; digital avatars can work in a simulated real-world environment. Employees can talk, interact, and hang out with each other in the metaverse, quite like the real-world paradigm. Additionally, metaverse accommodates virtual meetings for new employees.
Onboarding and carrying out associated activities like training them.
While the metaverse fintech ecosystem is a universe one might just be equipped for, financial institutions will have to make smart investments in the digital economic ecosystem of the metaverse if they want to succeed on the platform and be future-ready. Be it visiting a virtual mall and; expenditures, attending an event/conference or comprehending basic finance through gamification, metaverse could add a robust dimension to the world of finance.
In a notification,the DGFT said importers of steel and products need to register with the Steel Import Monitoring System within 60 days before the arrival of their consignment. Earlier, they were mandated to do so at least 15 days before the expected arrival of the consignment.
The new rule, thus, grants the importers more time to register their imports. The government had in late 2020 directed traders to register themselves with the SIMS.
The Reserve Bank of India (RBI) has stressed the need for frontloading of monetary policy actions to keep inflation expectations firmly anchored and re-align inflation with the target while reducing the impact such actions will have on medium-term growth, the central bank said in its bulletin for July. To that effect, the RBI has already initiated coordinated monetary and fiscal policy responses.
While the role of monetary policy to control inflation caused due to global supply shocks leaves limited space for the RBI to maneuver, there is risk of unhooking of inflation expectations due to the increasing intensity and frequency of such supply shocks, the RBI said, citing the ongoing supply side issues stoked by the Ukraine war and rebound of pandemic.
If crude prices increase by 10%, inflation could increase by around 30 basis points (bps) at its peak and gross domestic product (GDP) will weaken by 20 bps, the RBI observed, which requires monetary policy tightening to push inflation back to target. In such a scenario, the government will have to opt for reduction in its capital expenditure to maintain the trade deficit target or maintain the spending target and go for a higher trade deficit. Although the required interest rate tightening is lower in either scenario, there will be spillover effects on the growth of the economy, the RBI said.
In a separate article of the bulletin, the RBI had said that India can overcome the worst surge of inflation if the commodity prices soften and supply chain issues are resolved.
India’s current account deficit (CAD) was 1.2% of the gross domestic product (GDP) in FY22, slightly lower compared to 1.3% in the previous year. Although the deficit moderated to 1.5% in the fourth quarter of FY22 from 2.6% in Q3FY22, the surging oil prices are likely to have widened the current account deficit to 2.7% of GDP in Q1FY23, ICICI Securities said in a report.
The widening trade deficit leads to the depreciation of the Indian rupee due to depletion in foreign exchange reserves, which has resulted in a massive $8.1 billion decline in the country’s foreign exchange reserves as of July first week, the latest RBI data shows. The rupee is expected to depreciate further and may test psychological levels of 80.00 in coming sessions, the brokerage had said in another report earlier this month.
Merchandise exports rose 23.5% in June from a year before even on an unfavourable base but a steep 57.6% jump in imports on the back of elevated global commodity prices drove up trade deficit to a new monthly record of $26.2 billion.
With this, trade deficit in the June quarter jumped to a record $70.8 billion, way above that of $31.4 billion in the same quarter last fiscal, according to the provisional data released by the commerce ministry on Thursday.
This will likely inflate the country’s current account deficit for the first quarter of FY23 to more than 3% of GDP, compared with 1.5% in the previous quarter, according to some analysts.
Given the fears of recession in top markets (US and the EU), which have contributed immensely to India’s stellar export performance in FY22, external demand for Indian merchandise may falter in the coming months. The global supply chains, despite some improvement in recent weeks, still remain tangled.
Of course, with softening commodity prices, some pressure on the CAD front is expected to ease in the second half of this fiscal. Moreover, the dramatic rise in imports for a second straight month (even without oil and gems & jewellery, imports jumped as much as 38.3% in June) signals improving domestic demand that had remained subdued for months in the wake of the Covid outbreak.
Exports increased to $40.1 billion in June, a record for the third month of any fiscal, and the growth is slightly higher than May’s 20.6%. Core exports grew 8.7% in June, against 8.6% in the previous month but well below 19.9% in April.
But imports spiked to $66.3 billion from $42.1 billion a year before, driven by a 99% jump in purchases of oil and petroleum products, 261% in coal and 183% in gold.
A spurt in prices inflated petroleum and coal import bill substantially, while massive gold imports were partly driven by jewellers’ bid to build inventory to cater for some pent-up demand. This is partly because many marriages were last year postponed to 2022 due to the pandemic, as pointed out in the finance ministry’s economic report for June. Fitch Ratings has already warned of a doubling of India’s CAD in FY23 to about 3.1% of GDP. Of course, senior government officials have assuaged concerns about financing the CAD.
Among high-value segments, the rise in exports in June was led by petroleum products (119%), followed by electronics (61%) and garments (50%).
Aditi Nayar, chief economist at Icra, said while the elevated trade deficit for June poses some upside risks to the CAD for Q1FY23, “the correction in commodity prices has softened the outlook for the ongoing quarter, even though export growth may undergo a slowdown amidst a weaker outlook for the global economy. She projected a modest downsides to our FY23 CAD forecast of $105 billion or 3% of GDP.”
A Sakthivel, president of the apex exporters’ body FIEO, said the spike in imports is a matter of concern. However, the decent export growth “indicates the strength of the export sector amidst challenging ongoing geo-political and rising global uncertainties”.