India's food-tech industry to grow at 25 pc CAGR to USD 8 bn by 2022-end

Source:, Jan 28, 2019

New Delhi : Rising internet penetration, increasing ordering frequency and favourable consumer disposition are some of the factors driving growth in the Indian food-tech industry that is poised to grow at a compound annual growth rate of 25-30 per cent to USD 8 billion by the end of 2022, a report by Google and Boston Consulting Group (BCG) said on Tuesday. “Riding on the wave of higher consumption in a growing market and maturing dynamics on the supply side, we expect the industry to grow from USD 4 billion to USD 8 billion in the next three years, a massive 25 per cent growth rate,” the report titled ‘Demystifying the Online Food Consumer’ said.

It added that funding in the food-tech space has grown by 35 times in the past five years.

Macro trends such as rising internet penetration, increasing ordering frequency, favourable consumer disposition, expanding reach in smaller tiers and expanding network of restaurants on food-tech platforms pan-India continue to drive momentum in the industry, the report said.

As a consequence, reach of food-tech aggregators has grown six times from 2017 to 2019. At the same time, consumers are spending more than double the time to explore and order online — from 32 minutes per month in 2017 to 72 minutes per month in 2019.

The study cited peer or network advocacy (52 per cent) plays a critical role in drawing people to try online food ordering for the first time. This was followed by advertisements (19 per cent) that emerged to be a strong driver in metros and among the higher income groups across the country.

“The food tech industry is nascent but one of the fastest growing in the country… Food tech has now made its presence in greater than 500 cities in India and with consumer confidence growing, there are new opportunities for the players to ‘win with the consumer’ in an evolving market,” Google Director (Travel, BFSI, Classifieds, Gaming, Telco and Payments) Roma Datta Chobey said.

Overall, online spending in India is expected to grow at 25 per cent over the next five years to cross USD 130 billion.

The report also flagged the impediments that hinder adoption by consumers.

A fifth of the respondents stated a lack of trust in the app as the main barrier to usage — they believe that the role and control of the aggregators in the actual food preparation is low.

Delivery charges (18 per cent), food quality concerns (13 per cent) and lack of customisation (10 per cent) were other reasons customers cited for not having experimented with online food ordering so far.

Interestingly, while delivery charge was the top reason for not ordering food online in metro cities; in tier-I cities, lack of trust in apps (29 per cent) emerged as the primary roadblock.

“Food tech start-ups have revolutionised the way Indians eat. There is now a greater demand for healthy, home-cooked meals leading to emergence of new business models like cloud kitchen and meal subscriptions. Ordering food online is now a habit,” BCG Senior Partner and Managing Director Abheek Singhi said.

There is large headroom to increase reach, engagement and usage frequency for food-tech apps, he added.

Gadkari unveils InvIT road map for NHAI, initial target ₹20,000 cr

Source:, Jan 29, 2019

Mumbai: The National Highways Authority of India (NHAI) will initially raise ₹15,000-20,000 crore in its maiden InvIT offer and then go for a larger round, depending on the response it receives from investors, Union minister Nitin Gadkari said.

NHAI’s InvIT offer, expected in the months ahead, is part of the government’s plans to tap alternative sources of financing to boost public spending in the roads and infrastructure sector amid declining private sector interest in the build, operate and transfer model, where the entire initial cost is borne by them.

In addition to the InvIT offer, the government has firmed up funds from domestic lenders to raise money for long-gestation projects, Gadkari, Union minister for road transport and highways, said in an interview on Monday. “We are working closely with the Reserve Bank of India on this issue and I just spoke to governor Shaktikanta Das and he has assured that banks will fund projects up to 30 years subject to financial viability,” he said. “This is for the total cost of projects, land acquisition, cost of construction, against toll receipts. State Bank of India has assured us ₹50,000 crore already.”

An InvIT manages income-generating infrastructure assets, typically offering investors regular yield and a liquid method of investing in infrastructure projects. While two private sector road developers have raised money through InvITs, the government’s plan to step into this market has enthused investors wanting to bet on the infrastructure sector. The Union cabinet cleared NHAI’s plans to launch an InvIT in December.

In a press release last month, the government said: “Given the magnitude of the Bharatmala programme ( ₹5.35 trillion), NHAI would need adequate funds to complete the projects within the prescribed timelines. As part of this exercise, a workable option is to monetize the completed and operational national highway assets to unlock their value and offer attractive schemes to private players to invest in construction of new national highways.”

“The InvIT will come soon, in the next (fiscal) year,” Gadkari said. “The initial package is small, at ₹15,000-20,000 crore. Money is not a problem and we have new models (of financing) coming up.”

Earlier this month, finance minister Nirmala Sitharaman unveiled a ₹1 trillion National Infrastructure Pipeline for the next five years. While the roads sector is a significant part of this programme, the budgetary allocation to the roads ministry has failed to keep pace with the government’s ambitions, forcing the former to look elsewhere for funds.

In the Union budget for FY20, the allocation to the ministry of road transport and highways increased 12% to ₹1.12 trillion, while support to NHAI increased from ₹68,563 crore to ₹72,058 crore. Meanwhile, NHAI’s debt is about ₹2.5 trillion and interest payments are poised to outstrip toll revenues this year.

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Jio is now the largest telecom player in both revenue, market share: Report

Source:, Jan 28, 2019

NEW DELHI: Reliance Jio has become the largest telecom player by revenue and subscriber base, India Ratings said on Monday. Reliance Jio Infocomm Ltd has remained aggressive in subscriber acquisition and has become the largest player in terms of wireless subscriber market share, broadband subscriber base and revenue, it said.

The increase in Reliance Jio’s subscriber base is largely at the cost of Vodafone Idea Ltd, whose subscriber market share has declined consistently in last two years.

Revenue market share of RJio’s also grew to 34.9 per cent in 2QFY20, which is the highest in the industry compared to other players, the agency said.

India Ratings also said that the industry is showing signs of recovery.

The average revenue per user (ARPU) reported by telecom companies has started showing signs of recovery in the last two to three quarters. Moreover, the recent tariff hikes by telcos in the range of 25 per cent to 35 per cent is likely to support the increase in ARPU over the next few quarters. Furthermore, the share of broadband subscribers in the overall subscriber base is on a continuous rise.

“The rising share of data subscribers along with growing data traffic and stabilising data tariffs augurs well for revenue growth in our view,” it said.

It also said that the release of a consultation paper by Telecom Regulatory Authority of India (TRAI) in December 2019 to evaluate setting a floor price for telecom tariffs is a positive move for the telecom industry in its view. Additionally, some sense of relief to the telcos was also provided by the extension of the implementation of zero interconnect usage charge regime by a year, the agency said.

TRAI has extended levy of ₹0.06/minute till December 2020 from December 2019 earlier. As a result, the effective date of implementation of the regime has been postponed to January 1, 2021. Indian Ratings has downgraded VIL’s long-term issuer rating to ‘IND BBB-‘ from ‘IND BBB’ while maintaining it on rating watch negative. The downgrade reflects the crystallisation of adjusted gross revenue related liabilities for VIL post the Supreme Court’s adverse ruling on January 16, dismissing the review petition filed by telcos. The SC ruling provides clarity on the liabilities that are payable by VIL to the Department of Telecom, which was earlier contingent upon the outcome of the review petition, the agency said.

3 developers call off NTPC’s solar contracts  over regulatory delays

Source:, Jan 29, 2019

Solar power contracts of three major power plant developers with state-run NTPC Ltd have been cancelled due to delays in regulatory approvals, potentially disrupting India’s clean energy trajectory by knocking 1,400MW off it.

These firms had participated in what was the first interstate transmission system (ISTS)-connected solar auction conducted by NTPC, India’s largest power generation utility, for building power plants and supplying 2,000MW in August 2018. These bids contributed toward lowering India’s solar power tariff trajectory. While Acme Solar Holdings, Shapoorji Pallonji Infrastructure Capital Co. Ltd and New York Stock Exchange-listed Azure Power Global Ltd bid ₹2.59 per kilo-watt hour (kWh) to win contracts to build plants of 600MW, 500MW and 300MW each, respectively, SoftBank-owned SB Energy bid ₹2.60 per kWh at which it will sell solar power, to win contracts to develop 600MW.

The terms of the PPAs allowed the developers to opt for their termination in case of delays.

“The PPAs of Acme Solar, Azure Power and Shapoorji Pallonji group have been terminated with only SB Energy’s remaining,” said a person aware of the development requesting anonymity.

This comes against the backdrop of termination of wind PPAs of Hero Future Energies, ReNew Power Ventures and Mytrah Energy with NTPC Ltd to supply 300MW each.

“Only PPAs of Actis Llp’s renewable energy platform Sprng Energy and Continuum Wind Energy Pte Ltd remain to supply 200MW and 50MW, respectively,” said the person quoted above.

India, the world’s third-largest energy consumer after the US and China, is running what will become the world’s largest clean energy programme with an aim of having 175 gigawatts (GW) of clean energy capacity by 2022 as part of its global climate change commitments. It plans to add 100GW of solar capacity by 2022, including 40GW from rooftop projects. Wind power projects are to contribute 60GW. India currently has an installed renewable energy capacity of around 84.39GW. An NTPC spokesperson in an emailed response confirmed the development and said, “Under the provisions of power purchase agreement (PPA) signed by solar power developers (SPDs) and wind power developers (WPDs) with NTPC, it was required that discoms buying above power would obtain approval from the regulatory commission(s) within a period of two months from the date of signing of agreement. In the event of delay in regulatory approval SPDs- WPDs/discoms can terminate the agreement without any financial liability to either party.”

“Due to delay of more than two months in regulatory approval in the above cases, some of the SPDs/WPDs have opted for termination of PPAs under the PPA provisions,” the spokesperson added.

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Reliance launches new road project to counter pushback against plastics

Source: Business Standard, Jan 29, 2019

Reliance Industries, India’s largest petchem player, is launching a project to use plastics in road construction, amid growing concerns over pollution in the country of 1.3 billion whose major cities are often plagued with smog and litter.

India, which uses about 14 million tonnes of plastic annually, lacks an organized system for management of plastic waste, leading to widespread littering.

Prime Minister Narendra Modi is urging India to end consumption of single-use plastics by 2022.

But Indians should focus on fighting pollution, not plastics, executives at Reliance, whose chairman is Asia’s richest man Mukesh Ambani, said during a launch event on Tuesday.

The company will seek to work with India’s highway authority and individual states to potentially supply a plastics-infused mix to make some of the thousands of kilometers of roads Modi wants to build to upgrade India’s creaking infrastructure.

Light plastics, the type used as carry bags or snack wrappers, are typically not viable to recycle and so end up in landfills, street corners or oceans. Reliance wants to shred these plastics and mix them with bitumen, a formula the conglomerate says is cheaper and longer-lasting.

“(This) can be a game-changing project both for our environment and our roads,” Vipul Shah, the COO of the petrochemicals business, said at a company petchem plant in the western state of Maharashtra.

Shah was coy on details, saying Reliance had yet to work out the financial fine print in what he stressed would be a philanthropic endeavour.

Reliance’s announcement comes as campaigners such as Greta Thunberg ramp up pressure on businesses to help tackle climate change.

“It is happening internationally and now has started percolating to India too, though it’s at a very early stage,” said Sunil Dahiya, an analyst at the Center for Research on Energy and Clean Air.

“Corporates and industries are a big source of all kinds of pollution in India, so much more serious thoughts, policies and actions are required from them,” he added. India was home to 15 of the 20 most polluted cities in the world in 2018, according to a study by two groups monitoring air pollution. New Delhi is the world’s most polluted capital, with smog causing school cancellations, flight diversions and untold health problems for its over 20 million people.

Cracking the whip: E-comm policy to deal with online counterfeits

Source: The Economic Times, Jan 29, 2019

New Delhi: The upcoming e-commerce policy will make it tougher for sellers to peddle fakes online. The policy, likely to be out in March, will detail a plan of action for consumers and companies to deal with counterfeit products sold online.

The Department for Promotion of Industry and Internal Trade (DPIIT) is looking at various ways through which fakes sold on e-marketplaces can be curbed. Officials said the department will study the recent steps proposed by the US to curb counterfeit imports through third-party sales on online retailers.

“The e-commerce policy will certainly deal with counterfeits,” said an official in the know of the details.

The official added that the department would examine the American policy which proposes higher oversight of US warehouses and ramped up fines and penalties for violations. The new US strategy is to shift the liability for counterfeit goods from third parties to e-commerce platforms.

The Confederation of All India Traders (CAIT) wants similar measures for the Indian e-commerce market. India’s draft national e-commerce policy released last year had extensively talked of online counterfeits and called it a “worrisome trend”.
It had prescribed anti-counterfeiting measures such as asking e-commerce entities to publicly share all relevant details of sellers who make their products available on their platforms of. It mandated all sellers/retailers to furnish an undertaking of genuineness of products to the platforms and asked the platforms to make these accessible to consumers.

“Mechanisms to enable trademark owners (and licensees) to be informed about any possible counterfeit product being sold on a platform have been included in the policy,” the department had said in the draft wherein it asked platform to seek authorisation from trademark owners before listing high value goods, cosmetics or goods having impact on public health on their websites.

Ahead of Trump visit: India and US set to finalise $10-billion trade deal in February

Source: The Economic Times, Jan 29, 2019

NEW DELHI: India and the US are likely to finalise a mega trade deal pegged above $10 billion (more than Rs 71,000 crore) next month when United States Trade Representative (USTR) Robert Lighthizer visits New Delhi.

The deal, whose legal vetting is underway, will be signed during US President Donald Trump’s visit to India, and is a precursor to a free trade agreement between the two nations, officials in the know of the plans said.

Lighthizer and commerce and industry minister Piyush Goyal are likely to meet in the second week of February to finalise the terms of the deal. Trump is expected to be in India during February 24-25, his first visit here as head of state.

There were meetings on the planned deal in Davos during the World Economic Forum. A six-member team from the US administration was in Delhi over the weekend, meeting Goyal and the relevant line ministries to discuss the contours of the proposed pact.

Goyal had met Lighthizer in the US last year.

‘Medical Devices Issue Resolved’
“It is a fairly large deal,” said an official aware of the details. The issue of medical devices, which was a key obstacle in the trade talks between the two countries, is resolved, the official added.

India and the US have been entangled in a series of trade spats across various sectors. The deal could touch upon Washington’s demand of doing away with duty on American information and communication technology goods along with market access for its dairy products and duty cuts on Harley-Davidson motorcycles. The US is also keen to sell more almonds to India. New Delhi, on the other hand, had sought market access to its fruits including grapes.

“We expect the full deal to be signed this time and the longer-term idea is an FTA,” the official added.

India also wants restoration of benefits under the Generalized System of Preferences (GSP).

Under the GSP, certain products can enter the American market duty-free if the beneficiary developing country meets the eligibility criteria established by US Congress. The benefits to India were withdrawn from June 5, 2019, after the US dairy and medical devices industries alleged that Indian trade barriers affected their exports.

In 2018, India exported goods worth $6.3 billion (as per USTR figures) to the US under the GSP, accounting for around 12.1% of India’s total export to the US.

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