Ecommerce fires Bengaluru airport to hit 26-month high cargo shipment

Source: ETRetail.com, Nov 25, 2020

Bengaluru: The Kempegowda International airport in Bengaluru has processed 34,339 metric tonnes MT) of cargo in October, recording a 26-month high in tonnage.

The airport witnessed a highest-ever domestic outbound tonnage of 8,117 MT in October, largely driven by e-commerce shipments, according to a press release from the airport operator, BIAL .

Perishable commodities, which have been the major growth driver for the airport in the year 2020-21, continued to be the top international commodity, accounting for 12% of total exports in October. Doha emerged as the top destination in October 2020, with 1,095 MT of cargo.


After becoming the first airport in India to record positive growth in September 2020, the trend has continued in October 2020 as well, registering a 0.1 % increase compared to October 2019.

The record single-day Air Traffic Movement (ATM) was 52 ATMs on October 22, with the day witnessing a volume of 1,359 MT of Cargo, the press release added.

Short-term rates crash in India with funds overflowing with cash

Source: LiveMint.com, Nov 26, 2020

A glut of cash chasing assets in India has caused short-term rates to plunge.

A three-month treasury bill was sold at a record low yield Wednesday, while the market repo clocked a trade at 0.01%. Key borrowing costs like the weighted interbank call rate and collateralized money-market rates are way below the Reserve Bank of India’s benchmark in recent days, indicating investors such as mutual funds are accepting returns lower than what RBI’s deposit window would offer banks.

Governor Shaktikanta Das has pledged to stay accommodative well into 2021 as he tries to dig the economy out of an unprecedented technical recession. But a liquidity bloat is coming from the central bank’s intervention in the foreign currency market, as it seeks to rein in the rupee and keep exports competitive.

“The RBI’s dollar buying to prevent the rupee from appreciating has driven liquidity to a large excess,” said Arvind Chari, head of fixed income and alternatives at Quantum Advisors Pvt. “The RBI may have to act to suck out liquidity to maintain the sanctity of the reverse repo rate.”

Deposit Window

Banks have parked ₹6.1 lakh crore ($82.5 billion) of excess cash with the central bank at the reverse repo rate of 3.35%, according to the Bloomberg Banking Liquidity Index. Mutual funds and other such investors don’t have access to this window, and ICICI Securities Primary Dealership suggests the RBI should consider including them if it’s worried about the depression of overnight yields.

“A weekly or fortnightly liquidity absorption window with wider participation could address the skew in excess liquidity and reinforce the reverse repo rate as the floor,” ICICI Securities economists including A. Prasanna wrote in a note. “A stronger option would be to introduce the Standing Deposit Facility at a rate slightly above reverse repo — say 3.5% — so that money market rates reset.”

The so-called SDF is a tool that would enable the central bank to take in money without offering collateral.

The State Bank of India, the nation’s largest lender, warned that a sustained cash surplus may eventually push loan rates below similar-rated bonds, introducing policy unpredictability.

“Such type of irrational pricing, because of abundant liquidity, can impact banking sector profits and initiate asset liability mismatch, if the spread is more prevalent for lower-rated borrowers,” according to Soumya Kanti Ghosh, group chief economic adviser at the lender.

“A sure recipe for financial instability in the future.” The Reserve Bank’s policy review meeting is due to start next week with the announcement on Dec. 4.

Cabinet approves ₹2,480 crore FDI in ATC Telecom

Source: LiveMint.com, Nov 25, 2020

Union Cabinet on Wednesday approved ₹2,480 crore foreign direct investment (FDI) in ATC Telecom Infra Pvt Ltd. ATC Asia Pacific Pte. Ltd is looking to acquire 12.32% stake in ATC Telecom Infra Pvt Ltd through the FDI route.

“The Cabinet Committee on Economic Affairs chaired by Prime Minister Shri Narendra Modi has approved the FDI proposal no. 4930 for acquisition of 12.32% of the equity share capital (on a fully diluted basis) of M/s ATC Telecom Infrastructure Private Limited by M/s ATC Asia Pacific PTE Limited as a result of exercise of put option by M/s Tata Tele Services Limited (TTSL) and Tata Sons Private Limited (TSPL),” the Union cabinet said in a statement.

This would lead to foreign direct investment inflow of ₹2,480.92 crore. With this approval the cumulative FDI of M/s ATC Asia Pacific PTE Limited (ATC Singapore) into ATC Telecom Infrastructure Private Limited (ATC India) will be ₹5,417.2 crore in financial years 2018-19 to 2020-21.

ATC Telecom Infrastructure Private Limited is engaged in the business of providing telecom infrastructure services to telecom operators. The company has existing FDI approval up to 86.36 % and with this approval it will rise to 98.68% (on a fully diluted basis), the centre said. Founded in 2006, ATC Asia Pacific Pte Ltd’s business includes holding or owning securities of companies other than banks.

Govt moves to set up open e-commerce platform

Source: The Hindu Business Line, Nov 25, 2020

New Delhi: The Department for Promotion of Industry and Internal Trade (DPIIT) is moving to set up an e-commerce platform to provide easy access to all, including small traders and producers. To this end, it has set up a steering committee for formulation, implementation and policy oversight of Open Network for Digital Commerce (ONDC).

“It will be a neutral e-commerce platform which may provide equal opportunities to all and provide easy access to e-commerce not only to traders but also consumers.

This step of the government was much awaited in the wake of a large number of complaints of malpractices by existing e-commerce companies,” explained Praveen Khandelwal, Secretary-General, Confederation of All India Traders (CAIT), who is part of the steering committee.

Earlier this year, the work of carrying out a pilot on the ONDC was given to the Quality Council of India.

The steering committee, according to a DPIIT order of Tuesday, will initially build consensus and, once the project gets underway, ensure that it continues to meet the set vision, goals, and objectives.

More to be done

“The government, it seems, is testing the water to see what kind of an open platform is required and feasible to increase accessibility and reach of e-commerce. It is just the initial stage and a lot of work will need to be done before the idea can be given a concrete shape,” a Delhi-based researcher told BusinessLine.

Khandelwal said that such a platform will give consumers the right to choose better products at reasonable prices and with efficient and responsible delivery system. The committee is headed by a senior DPIIT official and includes representatives from the Department of Commerce, the Ministry of Electronics and IT, the Ministry of MSME and the NITI Aayog. Quality Council of India Chairman Chairman Adil Zainulbhai, NPCI Technology CEO Dilip Asbe and NSDL Technolgoy CEO Suresh Seth are also part of the committee and will provide domain expertise. Apart from CAIT, a representative of the Retailers Association of India will also be part of the committee to give industry inputs.

India’s IT, business services market to hit $13 billion by December: IDC

Source: Business Standard, Nov 25, 2020

New Delhi: India’s IT and business services market is expected to grow 5.4 per cent annually to reach $13 billion by December this year, research firm IDC said.

The segment grew 5.3 per cent year-on-year (y-o-y) in January-June (H1) 2020 period as compared to 8.9 per cent growth in H1 2019, IDC said in a report.

Of the IT and business services market, the IT services market contributed 77.4 per cent in H1 2020, growing 5.9 per cent y-o-y as compared to 9.3 per cent growth in the year-ago period.

“IT services market will begin picking up momentum gradually from 2021 onwards and is projected to grow at a CAGR of 7.2 per cent between 2019-2024, to be valued at $13.4 billion by the end of 2024,” it said.

This reduced rate of growth in the IT services market in India is due to the COVID-19 pandemic, IDC added.

“During H1 2020, application hosting services and infrastructure hosting services continued to be higher growth markets on account of increasing adoption of cloud applications (majorly collaboration applications and video-conferencing) and cloud infrastructure,” IDC said.

Owing to increased demand for VPN licenses and requirement for higher network connectivity, network services witnessed higher adoption, it added.

“In H1 2020, the role of IT services vendors gained higher prominence, as organisations increasingly approached them to help ensure business continuity by putting in place various technologies, solutions, best practices and frameworks,” IDC India Market Analyst, IT Services, Garima Goenka said.

During these difficult times, organisations were investing higher in collaboration applications, VPN licenses, endpoint devices, cybersecurity solutions, cloud, artificial intelligence, and automation.

“Apart from just ensuring business continuity, the role of IT service providers have also been towards helping organisations to achieve a higher degree of tech resilience, adaptability…,” she said.

Goenka noted that vendors have launched AI-based applications to help the government and healthcare sectors to provide citizen services and answer COVID-19 related queries, and for organisations to ensure safe and secure return of their employees to the workplace.

“IT investments across all the major sectors such as BFSI, healthcare, telecom, IT/ITeS, government and manufacturing increased considerably to improve overall experience and maintain business continuity and resiliency,” IDC India Senior Research Manager, Enterprise Software and ICT Services, Shweta Baidya said. She added that the government also relaxed some of the stringent guidelines that provided increased flexibility with respect to work from home/anywhere policies.

Cabinet approves Rs 6,000 cr infusion in NIIF debt platform

Source: The Economic Times, Nov 25, 2020

The Union Cabinet approved the government’s capital infusion of Rs 6,000 crore in the National Investment and Infrastructure Fund (NIIF) over two years.

“The cabinet took an important decision for Rs 6,000 crore of capital infusion in the National Investment and Infrastructure Fund in next two years,” said Prakash Javadekar, union minister of information and broadcasting, during a briefing on Wednesday.

Under the NIIF, two firms, Aseem Infrastructure Finance Limited (AIFL) and NIIF Infrastructure Finance Limited (NIIF-IFL) will mobilise the funds, the minister said.

While AIFL will finance under construction green field and brown field projects with less than a year of operations, NIIF-IFL will finance mature operating assets by helping infrastructure investors to replace high cost bank finance with cheaper finance post-commissioning, according to an official statement.

The Centre, who’s investment will go into the NIIF’s strategic opportunities fund, has allocated Rs 2,000 crore for the current fiscal, the statement said.

“However, in view of the unprecedented financial situation and availability of limited fiscal space due to the prevailing Covid-19, the proposed amount may be disbursed only if there is readiness and demand for debt raising,” it said.
NIIF-IFL is a AAA rated company while AIFL was AA rated. The NIIF debt platform will put in Rs 7,000 crore equity while about Rs 1 lakh crore will be mobilised through global bond markets to make Rs 1.1 lakh crore available for infrastructure projects in the first tranche, Javadekar said.

Pre-pack scheme: Insolvency resolution time may be cut to just 3-4 months

Source: The Financial Express, Nov 25, 2020

The government is weighing a proposal to reduce by more than a half the time limit for the resolution of stressed assets under a so-called ‘pre-pack’ insolvency scheme. Any such move would not just expedite the resolution of bad debt but also cut costs. The “pre-pack” scheme will require amendments to the Insolvency and Bankruptcy Code (IBC) to take effect, and the government may introduce a Bill to this effect as early as the next session of Parliament, sources said. As reported by FE earlier, the “pre-pack” scheme will be a pre-IBC window for resolution of toxic assets, which will only complement the existing framework but not substitute it.

At present, under the IBC, the corporate insolvency resolution process has to be wrapped up within a maximum of 270 days. Of course, in many cases, especially the large ones recommended by the central bank that included Essar Steel and Bhushan Steel, the resolution process dragged on for months, far exceeding the mandatory time-frame. But that was primarily due to litigation.

While details are being worked out, the “pre-pack” scheme will typically allow a stressed company to prepare a financial reorganisation plan with the approval of its at least two-thirds of creditors (and share-holders). The resolution plan so reached can then be placed before the NCLT for approval and subsequent implementation. However, the fineprint of the scheme will be crucial to its success, analysts have said.

Under the extant IBC norms, a creditor can drag a debtor to the NCLT if the default amount is `1 crore or more. Once the creditor’s application is admitted by the NCLT, the resolution process starts and it has to be wrapped up in 180 days, which can be extended by a maximum of 90 days. “The time limit may be reduced to just 3-4 months under the ‘pre-pack’ scheme. The government is in the process of finalising the changes,” one of the sources said.

Data available with the Insolvency and Bankruptcy Board of India (IBBI) show, of the 2,108 ongoing cases as of June 2020, the resolution of as many as 1, 094 has been dragging on beyond the mandatory 270 days. Analysts have attributed this delay to the legal hurdles posed primarily by defaulting promoters’ dogged pursuit to hold on to their companies.

Earlier, the government had set up a committee under IBBI chairman MS Sahoo to submit a report on ‘pre-pack’ insolvency. The planned amendments are expected to be based on the Sahoo panel report. Since a resolution plan under a “pre-pack” arrangement is already endorsed by the lenders, it will effectively bypass various requirements and interventions by the NCLT at different stages under the usual IBC process, thus, reducing litigation costs and delays. It will also help decongest the over-burdened NCLTs, especially after the lifting of the suspension of insolvency cases against fresh Covid-related defaults. The government has already extended the suspension by three months from September 25, upon the expiry of a six-month deadline last week. The idea was to help cash-strapped firms tide over the Covid impact without the fears of getting dragged to the NCLT.

India bans AliExpress, 42 other Chinese apps over security concerns

Source: Business Standard, Nov 25, 2020

Bengaluru: In another blow to Chinese apps functioning in India, the government has banned 43 more apps in the country, including the popular online retail portal AliExpress, belonging to Jack Ma-owned e-commerce giant Alibaba Group.

The Ministry of Electronics and Information Technology (Meity) on Tuesday issued the order for blocking the access to these apps under Section 69A of the Information Technology Act.

“This action was taken based on the inputs regarding these apps for engaging in activities which are prejudicial to sovereignty and integrity of India, defence of India, security of state and public order,” it said in an official statement. The decision was taken based on the comprehensive reports received from Indian Cyber Crime Coordination Centre, Ministry of Home Affairs, Meity said.

Other popular apps on the list include Snack Video, a short video app which was gaining traction after the earlier ban on TikTok, and Alipay Cashier, which helped users collect payments from Alipay by scanning a QR Code. AliExpress and Snack Video have over a 100 million downloads each on Google Play Store. While shopping apps like Shien and Club Factory were blocked weeks ago, AliExpress had evaded the ban earlier. This time, over a dozen Chinese dating apps, including Chinese Social and We Date, have also been red-flagged by the country.

“This was due for a while now and even more could be in the pipeline. E-commerce, payments and online dating are the primarily targeted infrastructures that have access to quite a lot of critical consumer information. What needs to be seen is whether Indian alternatives can replace these existing platforms with profits rather than just replace them with a burn,” said Ankit Chaudhari, CEO & founder, Aiisma, a data marketplace.

Some industry players claimed that some of these apps were banned earlier as well but they cloaked themselves under a new identity to enter the Indian market again. “The ban is a very smart move and sends out a clear message that Chinese apps can’t use such tactics to engage in activities that are prejudicial to India’s sovereignty,” said Sumit Ghosh, CEO and co-founder of Chingari, which claims to have the highest engagement time in the short-form video space in India.

Experts say the biggest security concern is that a lot of apps on smartphones collect massive amounts of data which has nothing to do with the services they provide. “As the threat to secure user data is increasing, users must make sure their mobile phones are protected, secured and encrypted,” said Aditya Narang, co-founder & managing director, SafeHouse Technologies, a cyber security tech enterprise. Overall, the government has banned 220 apps since June amid continuing tensions along the India-Chinese border. These include PUBG, WeChat and Alipay. After being banned for over two months in India, the creators of PUBG are preparing to launch PUBG Mobile India, a mobile version of the popular game, to cater to the India market. According to reports, PUBG Corp has registered an Indian subsidiary in Bengaluru indicating a relaunch in the country soon.

New national retail policy: Licence rationalisation among five focus areas

Source: Business Standard, Nov 24, 2020

Mumbai: The government had identified five areas in its proposed national retail policy, Anil Agrawal, joint secretary in the department for promotion of industry and internal trade (DPIIT), Ministry of Commerce, said on Tuesday. Agrawal was addressing delegates at the Confederation of Indian Industry’s (CII’s) virtual retail summit, saying a discussion paper had been launched and that the final stages of revision would be undertaken shortly.

The five areas that would be addressed in the policy are ease of doing business, rationalisation of the licence process, digitisation of retail, focus on reforms and an open network for digital commerce.

“Offline retail and e-commerce have to be looked at in an integral manner. There is also a need for skilling and reskilling the retail workforce,” Agrawal said.

Setting up a shop or department store requires 24 to 57 licences, with the compliance burden having grown in the past few years.

The need to unwind the knots in retail has been necessitated owing to its importance in the country’s economy. Retail is India’s third-largest sector, showed a report by consultancy firm Kearney released at the CIl summit. Growing at the rate of 10-11 per cent in the past few years, its pace has now slowed to about 9 per cent, due in part to the Covid-19 pandemic, which has curtailed business activity.

Of the segments seeing a surge in business include channels like e-commerce, which has been growing at the rate of 28 per cent per annum. This came as digital adoption continued to increase in the pandemic and post-pandemic world, Kearney said.

Modern trade and general trade, on the other hand, have been growing at the rate of 10 per cent and 8 per cent each per annum, the consultancy said, with the need for a truly omni-channel play to be adopted by retailers for future development and growth.

Also, close to 50 million people were employed in the country’s retail sector, implying that jobs had to be protected and nurtured, even as digitisation improved efficiency, experts said.

Shashwat Goenka, chairman of the CII national committee on retail, said the industry had the potential to create an additional 3 million jobs, if a cohesive national retail policy was introduced in the country. Goenka is the head of the retail and fast-moving consumer goods verticals at the RP-Sanjiv Goenka group.

“Moving forward, as the industry revives from its slump, new and emerging models need to be deliberated in order to accelerate the recovery process. The industry is still hampered by the loss in demand. Therefore, proactive steps need to be taken in order to revive consumer confidence,” Goenka said.

The national retail policy was expected to address concerns of small and medium retail entrepreneurs who had borne the brunt of the lockdown and pandemic, analysts said.

“The government has always been proactive for the retail sector and has taken several measures to help create a robust environment which has allowed retail to thrive. However, now as we recover from the pandemic, a policy-led approach where the industry and government work together cohesively will allow the retail industry to bounce back and grow exponentially in the years to come,” Goenka added. The Kearney report says that improving access to capital, especially for traditional retailers, rapid adoption of technology and modernisation by offline players, bridging logistics and supply chain infrastructure gaps, and enhancing labour participation and productivity are some of the building blocks for the future.

Govt looks to revamp key exports incentive scheme for services sector

Source: The Economic Times, Nov 25, 2020

New Delhi: The government is looking to revamp a key exports incentive scheme for the services sector, the hardest hit by the Covid-19 pandemic. The proposed revamp could see some widening of the scheme to bring in more beneficiaries and sectors, said an official.

The Service Export from India Scheme (SEIS) covers nine broad sectors, including business services, communication, construction and tourism.

“We are looking at a new form of SEIS and what could be the upper limits, new beneficiaries and new services to be included in the scheme,” said the official.

SEIS was launched in 2015 to boost services exports. It offers incentives of 5-7% of net foreign exchange earned.

Under the scheme, benefit is extended in the form of duty credit scrip which enables the holder to import all goods which are freely importable without payment of basic customs duty.

The scrip and the goods imported against the scrip are freely transferable.
“There are talks of capping the incentive under the scheme due to limited budget and the government does not want only the big players to benefit,” said an industry representative.