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.

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: ETRetail.com, 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.

Actis to set up 2 green firms with $850 million

Source: LiveMint.com, Mar 29, 2021

Private equity firm Actis Llp plans to invest $850 million in India to build two green energy platforms, said two people aware of the development, highlighting continuing interest among global investors in the domestic renewable energy market.

The first platform will focus on setting up grid-connected solar and wind power parks while the second will cater to the growing commercial and industrial (C&I) segment. These investments will be made from Actis Energy 5 LP fund.

“While Actis plans to make an equity investment of around $600 million for the new firm that will set up grid-connected wind and solar projects, the other new firm that will cater to the C&I segment may see an equity investment of around $250 million,” said one of the two people cited above requesting anonymity.

The person added that these firms will be set up shortly.

Considering the regulatory risks over green energy contracts and their enforcement, investors are increasingly looking at the C&I space as it tends to be insulated from risks such as curtailment in procuring power and tariff-shopping by state-owned distribution companies (discoms).

Green energy companies backed by global investors such as Petroliam Nasional Bhd-owned Amplus Energy Solutions Pvt. Ltd, Royal Dutch Shell-backed Cleantech Solar Energy, Netherlands Development Finance Co.-backed Avaada Energy Pvt. Ltd and Warburg Pincus-backed CleanMax Solar are currently supplying power to third-party as well as captive consumers in India who prefer such suppliers instead of depending on a more expensive electricity grid.

Also, there is considerable interest in the grid-connected clean energy space as well, given marquee deals such as the Goldman Sachs-backed ReNew Power’s proposed merger with Nasdaq-listed special purpose acquisition company (SPAC) RMG Acquisition Corp. II (RMG II), at an enterprise value of around $8 billion. Also, Greenko recently raised $940 million for refinancing through its latest dollar bond issue.

The third and the fourth firm clean energy firms being set up by Actis in India follow its earlier deal wherein it sold Ostro Energy Pvt. Ltd to ReNew Power Ventures in 2018 at an enterprise value of $1.5 billion.

Actis’s renewable energy platform in India—Sprng Energy—has an operational portfolio of 800 megawatts (MW) comprising wind and solar assets. With another 400MW coming online shortly, the PE firm plans to grow Sprng Energy to 2-gigawatt (GW) capacity before it monetizes it.

Some of the other clean energy platforms in India backed by private equity investors include KKR’s Virescent Infrastructure and European alternative asset manager EQT and Singapore’s state investment firm Temasek Holdings Pte.’s O2 Power.

The enthusiasm among global investors stems from India setting a target of 450GW renewable energy capacity by 2030. It currently has an installed renewable energy capacity of 89.63GW, with 49.59GW under execution. Also, ₹4.7 trillion has been invested in the country’s renewable energy space in the past six years, with an expected ₹1 trillion investment opportunity annually till 2030.

Actis, which invests only in emerging markets, has committed $2.1 billion in the Indian market so far spanning the energy, financial services and real estate sectors.

“Actis will also buy operating renewable and road assets through the Actis Long Life Infrastructure Fund, a yield-based fund,” said the first person cited above.

A spokesperson for Actis declined comment. Actis acquired two solar projects totaling 400MW from Acme Solar Holdings Ltd last year through Actis Long Life Infrastructure Fund. It has bid to acquire Ashoka Concessions Ltd.

Biocon partners with Libbs Farmaceutica to launch generic drugs in Brazil

Source: Business Standard, Mar 30, 2021

New Delhi: Biotechnology major Biocon on Monday said its subsidiary has joined hands with Libbs Farmaceutica to launch generic drugs in Brazil, the world’s sixth most populous country.

Biocon Pharma, a unit of the company, has tied up with Brazil-based Libbs Farmaceutica to introduce generic formulations in the Latin American country, Biocon Ltd said in a statement.

This partnership, which marks the entry of Biocon’s generic formulations into Latin America, builds upon a successful association with Libbs, which began in 2017 to launch biosimilar Trastuzumab in Brazil, it added.

As part of the out-licensing deal with Libbs, Biocon Pharma will be responsible for drug development and manufacturing, while Libbs will leverage its deep expertise and reach in Brazil to import, distribute and market, subject to approvals from the Brazilian health regulatory agency, ANVISA.

“Expanding our association with Libbs Farmaceutica, a trusted partner, to our generic formulations, will help us establish a firm footing in Latin America, starting with Brazil,” Biocon Ltd Chief Executive Officer and Managing Director Siddharth Mittal said.

The company remains committed to expanding its global presence with high quality and affordable medicines and invest in strengthening capabilities that enables it to serve patients globally, he added.

Libbs Executive President Alcebades de Mendona Athayde Junior said the partnership that is going to make a difference in patients’ lives. “We started with Biocon Biologics years ago, and we were very successful: our Trastuzumab became a leader in the private market, a milestone for our company. We will now continue making a difference in people’s lives with Biocon, with the goal to expand access to quality, safe and effective treatments to our patients,” he added.

India’s goods exports to stand at $290 bn in FY21, says Piyush Goyal

Source: Business Standard, Mar 27, 2021

New Delhi: India’s goods exports will stand at USD 290 billion for the financial year ending March, 7 per cent short of the shipments in the previous fiscal, Union Minister Piyush Goyal said on Friday.

However, the minister said this was “great” considering the country has bounced back so quickly in a challenging year.

India’s goods exports stood at USD 313 billion in FY20.

“As against about USD 313 billion of goods exports last year, we will end the year with almost 93 per cent of that, USD 290 billion. Now isn’t that great,” Goyal said while addressing the Times Network India Economic Conclave.

Asked about big foreign firms which have made investments in India in the past year, the commerce and industry minister said Apple and Samsung have invested on a large scale in the country and expanded their facilities.

Referring to the two firms, he said: “I believe they are looking at India as their prime production base to meet the needs of the world.”

He added that pharma companies are also looking at expanding their investments in India.

The minister also expressed confidence that going forward, India will be able to overtake China in its engagement with Bangladesh.

His statement comes at a time when Prime Minister Narendra Modi is visiting Bangladesh.

The Prime Minister left for Bangladesh on Friday on a two-day visit during which he will take part in a wide range of programmes aimed at furthering cooperation between the two countries.

Goyal further said it will be a “record year” in terms of FDI inflows for India, despite the pandemic and “the fact that all international statistics suggest that foreign investments across the world are going to significantly fall in the current months.”


Observing that India was amongst the “rare countries” which saw FDI growth in 2020, the minister said he has “absolutely no doubt it will be a record FDI”.

Asked about India’s relations with Bangladesh vis-a-vis Bangladesh-China ties, he said India has been working relentlessly to build strong relations with all its neighbouring countries.

Goyal said India’s ability to add more value to the products and services has helped it expand trade ties with countries like Bangladesh.

“I have the confidence that going forward, we will be in a position to overtake China in their engagement with Bangladesh. We are working with that single-minded purpose and our industry has the ability,” said the minister.

He said India’s services sector has the confidence, adding that “we in government are also proposing several initiatives, some of which should be discussed during PM Modi’s visit to Bangladesh.”

However, he added that India does not hold a grudge against any country for its engagement with anybody else and focuses only on what it can do with that country better.

Goyal, who is also the railways and consumer affairs minister, said the Indian Railways has seen the highest freight loading in its history every month since September 2020 till February 2021.

“When we close March 2021, despite the setback of first few months of the lockdown, we will be exceeding last year’s loading in the Indian Railways in terms of freight and it will be the highest freight loading that Indian Railways has seen in its long history,” he said.

On the Bharat Bandh called by farmers” organisations on Friday to protest against the three farm laws, which included train blockade, Goyal said he has been monitoring the situation and in the last report sent to him, he saw that in the whole country some 60 odd trains were disrupted for 5 to 15 minutes.

The minister said this clearly shows that “farmers across the country are happy with these laws”, adding that the three farm laws do not take away anything from what was already existing and they are an added option given to the farming community. Asked about the ‘TRP scam’, Goyal said the investigation will bring to light any wrongdoing and stringent action will be taken against the guilty.

India, US agree to work towards resolving key bilateral trade issues

Source: Business Standard, Mar 27, 2021

New Delhi: India and the United States will look at ways to expand its trade relations and cooperate on pending bilateral issues, US Trade Representative Katherine Tai said soon after meeting Union Minister of Commerce and Industry Piyush Goyal.

“Then I met with Minister Piyush Goyal. We agreed to revitalize engagement through the US-India Trade Policy Forum, find ways to expand our trade relationship, and cooperate on a broad set of issues,” Tai said in a tweet.

Tai, who was confirmed as a top US trade negotiator last week, discussed crucial issues with Goyal over a phone call on Thursday.

Meanwhile, Goyal on Friday said that trade deals should never be done in a hurry and should not be looked at only as tools of diplomacy. Therefore, India is extremely cautious in its approach to trade deals and wants to ensure reciprocity in trade deals.

“I’m glad to share with you that only I think yesterday, I had my first engagement with my counterpart in the US, Miss Katherine Tai… We hit it off extremely well yesterday in our very first engagement, and we are looking forward to quickly ramp up our discussions,” he said at the India Economic Conclave.

“Having said that we are looking at expanding our trade ties through removal of non trade barriers through better mutual recognition agreements through other means to expand both the trade in goods and services,” he added.

In the past, India had extensive discussions with the US on a mini trade deal. However, that didn’t get through. “Of course, the US, new administration has broadly announced that they are not looking at free trade agreements in the near future. Probably they are also looking at the way India looks at it that doing these things in a hurry, is not always advisable,” he said.

MSMEs look at Foreign Trade Policy for relief from up to 50% spike in input, fuel costs

Source: The Economic Times, Mar 30, 2021

It’s not just bigger companies that are facing input cost rise.

Medium micro, small and medium enterprises (MSME) are severely hit by rising raw material and fuel costs, prompting them to seek government help.

The rising prices of metals, plastics, fuel and other raw materials along with a shortage of shipping containers have been adding to the woes of the MSME sector, said Rupa Naik, senior director, MVIRDC World Trade Center, Mumbai – a trade facilitating organisation.

The Ministry of Commerce and Industry is likely to roll out its new foreign trade policy for a five-year period effective from April 1 in a bid to boost India as a leader in international trade.

The need to address the inflationary trend in commodity prices needs to be addressed as India’s MSMEs, which contribute over 48% of the country’s exports, are operating on too thin a margin to absorb this cost pressure, Naik said.

Also, the forthcoming foreign trade policy should provide renewed thrust on 235 commodities that witnessed strong growth in exports despite the challenging world economic environment amidst the pandemic.
The trade
In the calendar year 2020, India’s trade surplus across select 235 commodities grew to $33 billion from $12 billion in the previous year as imports declined by 14% to $27 billion, while exports surged 36% over last year, as per the data analysed by World Trade Center, Mumbai.

Out of the 235 commodities, pharmaceuticals including medical equipment and agro-products are the largest categories accounting for 22 percent each with an export value of $13.4 billion and $13.2 billion, respectively. Metals and chemicals stand at third and fourth positions accounting for 18 percent and 11 percent respectively, out of these 235 commodities.

MSME trade bodies in Karnataka have said that the operating cost of over 60 lakh medium, small and micro enterprises (MSMEs) in Karnataka will go up at least 30% due to the recent hike in petrol and diesel prices. Manufacturing, engineering, and auto component firms are hit the most as they have to run their machines on diesel gen-sets during daily power cuts.

Also, MSME operations are heavily dependent on transport and logistics as they have to deliver products to OEMs and procure raw materials on a daily basis.
Corrugated box makers
The rising input cost coupled with the unabated increase in kraft and board paper prices has forced the corrugated box manufacturers of eastern India to go for a voluntary shutdown of their units this month.

A release issued by the Eastern India Corrugated Box Manufacturers’ Association (EICMA) said, “The corrugated box industry comprising MSME entrepreneurs has been suffering immensely as it neither has any control on the unabated increase in input costs nor over escalating kraft paper prices. The situation is critical and the survival of the industry is under threat.”

Other inputs including steel stitching wire, starch, labour, energy, transportation and other costs have witnessed unprecedented rise thereby increasing the conversion cost by 40 per cent to 50 per cent, it said.