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BUSINESS AND ECONOMY - December 2015

Dec 2015

Dec 21, 2019

Flag Countries Placing Non-tariff Barriers: Goyal

Union minister Piyush Goyal asked the industry to flag the countries that are placing non-tariff barriers on Indian exports and promised to take retaliatory actions against those countries.
Speaking at the 92nd Annual Convention of FICCI, the Commerce and Industry Minister also said that India needs to get more competitive, and stressed on addressing the problems of the entire value chain, be it inverted duties, dumping, or unfair subsidies.
He further said that the stakeholders need to tell the government, which country is using any trade remedial measures or non-tariff barriers which impact their exports to that country.

Panel Okays Spectrum Auction Plan

The apex decision body of telecom department, Digital Communication Commission, approved the most-awaited Rs. 5.22 lakh crore spectrum auction plan, which is expected to pave the way for 5G services in the country.
As per Telecom Secretary Anshu Prakash, the auction will entail sale of over 8300 MHz of spectrum spread over all 22 telecom circles, the reserve price of which comes to Rs. 5,22,850 crore.

Reliance, Shell India to Transfer Stake in Panna-Mukta oil Fields

Reliance Industries Ltd (RIL) and Shell India-owned BG Exploration and Production India Ltd (BGEPIL) will transfer their entire stake in Panna-Mukta oil and gas fields to state-owned Oil and Natural Gas Corp Ltd (ONGC). RIL, BG Exploration and ONGC have been operating the Panna-Mukta fields in a joint venture for the past 25 years.
In the Panna-Mukta and Tapti (PMT) joint venture, ONGC held 40% stake, while RIL and BG Exploration owned 30% stake each. BG Exploration is a subsidiary of Shell India.
The production sharing contracts (PSC) for the Panna-Mukta and Tapti fields, which were executed by the PMT JV with the government of India in 1994, expired on 21 December 2019.

Accenture Reaches Global Headcount Landmark

Accenture Plc, the Dublin-based digital technology and consulting major, emerged as the single largest tech employer in the world.
In its first quarter earnings call, the company said that its employee strength had surpassed 500,000, a significant people milestone, as on November 30, 2019.
TCS is the second largest tech employer with 450,738 people, followed by IBM at 350,600, Cognizant 256,000, Infosys 228,123 and Wipro at 171,425.
India is the single largest geography for Accenture in terms of people, with a headcount of 150,000. The firm employs over 50,000 in the Philippines and about 17,000 in China.

Tata Chem. Buys Balance Stake in TCSAP

Tata Chemicals acquired the remaining 25 per cent stake in Tata Chemicals (Soda Ash) Partners Holdings for $195 million or Rs. 1,387.2 crore. Following the transaction, Tata Chemicals ownership in Tata Chemicals (Soda Ash) Partners increased to 100 per cent.
TCSAPH owns 100 per cent interest in Tata Chemicals (Soda Ash) Partners (TCSAP), the soda ash operating entity in the United States. The turnover of TCSAP for the year ended March 2019 was $465.5 million compared to $491 million in March 2018.

Import Cover Rises to 10 Months: RBI

India's import cover improved to 10 months at the end of June 2019, from 9.6 months at end-March, as the country's foreign exchange reserves increased to $429.84 billion, from $412.87 billion in the same period, the Reserve Bank of India (RBI) said in its half yearly report on foreign exchange reserves.
On a balance of payments basis, the foreign exchange reserves increased by $14.0 billion during April-June 2019 as against a decrease of $ 11.3 billion during April-June 2018.
The import cover has likely improved even more by now, as the country's reserves stood at $454.5 billion by December 13. In the same period, the ratio of short-term debt to reserves, which was 26.3 per cent at end-March 2019, declined to 25.5 per cent at end-June 2019.

Dec 20, 2019

Yamaha Rides into 125cc Scooter Market, to Exit 110cc Segment

Japanese two wheeler company India Yamaha Motor announced its foray into the 125cc scooter segment with two models (drum and disc brakes) and also launched a BS-VI emission norm compliant MT-15, a 155 cc motorcycle.
According to Chairman Yamaha Motor India Group of Companies, the company will expand its Blue Square retail outlet to 100 numbers in 2020.
Yamaha will exit the 110cc scooter market.

Mistry Free to Sell $17 bn Stake in Tata Sons

The National Company Law Appellate Tribunal (NCLAT) set aside the Registrar of Companies' (RoC) decision to change Tata Sons Limited from a public company to a private company, terming it illegal and ordered the RoC to make a correction in its records showing Tata Sons as public company.
The company cannot exercise its powers under Article 75, under which the board can transfer anyone's shares by passing a special resolution.
Seen together, this means that former Tata Sons chairman Cyrus Mistry, who owns 18.4% stake in Tata Sons valued at over $17 billion, is free to sell his stake.

China Announced New Tariff Exemptions for US Chemical, Oil Products

China unveiled a new list of import tariff exemptions for six chemical and oil products from the United States, days after the world's two largest economies.
The exemptions will be for one year from 26 December.
Duties already imposed on US products would not be refunded.
The tariff waivers will apply to four chemical products, such as metallocene high-density polyethylene (HDPE) and a special grade of linear low-density polyethylene (LLDPE), and refined oil products that include white oil and food-grade petroleum wax.
The exemptions could see China resume buying more HDPE and LLDPE from the US, reversing the trade flow, as the US supplies have been diverted to Latin America and Europe while China has been importing mostly from the Middle East.

Jet Airway's Lenders May Invite EoI Afresh

The committee of creditors (CoC) of beleaguered Jet Airways decided to call fresh expressions of interest (EoI) from prospective investors after two new entities expressed an interest in reviving the airline. South America-based airline company Synergy Group was the sole bidder for the defunct airline, but it had submitted only a draft resolution plan.

RBI Plans Indian Version of Operation Twist

The Reserve Bank of India (RBI) will conduct a simultaneous sale and purchase of bonds in a move seen by market participants as an attempt to bring longer-term yields lower.
It is the first time the RBI conducted a special open market operation (OMO) of this kind, similar to the 'Operation Twist' carried out in the US near the start of the decade.
Bond yields have been rising since the RBI unexpectedly left its key repo rate unchanged earlier this month, even as it slashed its forecast for economic growth to its lowest in over a decade.
RBI will buy Rs. 10,000 crore worth of the current benchmark 10-year bond while selling four bonds maturing in 2020 for an equivalent amount.

Dec 19, 2019

World Bank's Ease of Doing Business Report 2020

In the World Bank's Ease of Doing Business Report 2020, India made a remarkable jump ranking 63rd among 190 countries. It improved by 14 ranks from its rank of 77 in 2019.
India improved its rank in 7 out of 10 indicators and moved closer to international best practices. The 2020 edition of the report acknowledges India as one of the top 10 improvers, the third time in a row, with an improvement of 67 ranks in 3 years.

Mazagon Dock Gets SEBI's Go-ahead to Float IPO

State-owned Mazagon Dock Shipbuilders received SEBI's go-ahead to float an initial public offering (IPO).
Going by the draft papers, Mazagon Dock, a leading shipyard of India serving the nation's strategic requirements, will see sale of over 2.8 crore equity shares by the government.
The issue is being managed by Yes Securities, IDFC Securities, Axis Capital, JM Financial and Edelweiss Financial Services.

NCLAT Reinstates Cyrus Mistry as Executive Chairman of Tata Sons

The National Company Law Appellate Tribunal (NCLAT) restored Cyrus Mistry as Executive Chairperson of Tata Sons, and held the appointment of Natarajan Chandrasekaran as illegal.
A two-member NCLAT bench headed by Chairperson Justice S. J. Mukhopadhaya pronounced the judgement following a petition moved by Mistry. Mistry is a member of the Shapoorji Pallonji family that owns a minority stake in Tata Sons.
He got involve in the legal battle after being removed as the Chairman in October 2016.

Pact on Ore Supply to Kadapa Steel Plant

The Andhra Pradesh Government signed a memorandum of understanding (MoU) with the National Mineral Development Corporation (NMDC) for the supply of iron ore to the Kadapa Steel Plant for which the Chief Minister Y. S. Jagan Mohan Reddy will be laying the foundation stone.
Kadapa steel plant would come up between Sunnapuralla Palli and Pedha Nandaluru villages in Jammalamadugu mandal of YSR Kadapa district.

Fiat Chrysler and Peugeot Sign Merger Deal

The Boards of Fiat Chrysler Automobiles and PSA Peugeot signed a binding merger deal creating the world's fourth-largest auto company with the scale to confront the challenges of stricter emissions regulations and the transition to new driving technologies.
The companies new group will be led by PSA's cost-cutting CEO Carlo Tavares, with Fiat Chrysler's Chairman John Elkann as Chairman of the merged company. Fiat Chrysler CEO Mike Manley will stay on, but it was not announced in what capacity.

Infosys Settles Visa Case with California

Global software major Infosys reached an out-of-court settlement for $800,000 (Rs. 5.7 crore) with the California Attorney General on charges related to the alleged violation of B-1 visa rules by it to its techies.
California Attorney General Xavier Becerra said that Infosys would pay the western state $800,000 to resolve the charges that the Indian IT firm and its subsidiary (Infosys BPM Ltd) had employed about 500 techies in California on B-1 visas rather than H-1B visas between 2006 and 2017.

Dec 18, 2019

Retail Loans to Double in 5 Years

According to a study jointly conducted by private sector lender ICICI Bank and rating agency Crisil, retail loan book of financiers in India will double to Rs. 96 lakh crore by March 2024, compared with Rs. 48 lakh crore in March 2019.
The retail loan book of financiers will double to Rs 96 lakh crore by March 2024 due to higher private consumption, willingness to take loans and usage of data analytics.

BSNL to Save Rs. 1,300 crore in FY20 with VRS Offer

State-owned Bharat Sanchar Nigam Ltd (BSNL) said that post VRS, it expects to save Rs. 1,300 crore in wage bills this fiscal after the scheme becomes effective in January, 2020.
In all, 78,569 employees have opted for the voluntary retirement scheme (VRS).
On January 31, 2020, the voluntary retirement scheme (VRS) will be effective.
As per CMD P.K. Purwar, the goal is that people who have applied for VRS, their application should be considered and approved.
Mr. Pawar said that after the VRS, BSNL will have around 70,000 employees, but added that the company has an option to hire contractual employees from third parties as and when required.

NBCC Bid to Acquire Jaypee Infra Cleared

A week-long voting process threw up NBCC Limited as an overwhelming favourite to complete the under-construction assets of Jaypee Infratech. Pitted against a consortium of Suraksha Realty Limited and Lakshdeep Investments and Finance Private Limited, the state-owned company secured 97.36% of the votes that had 13 lenders and over 12,000 homebuyers participating in the exercise.
The projects, many of them lying along the 167-km-long Yamuna Expressway, are based in Noida, Tappal, Jaganpur, Agra and Mirzapur in Uttar Pradesh.
Jaypee Infratech is one of the twelve companies that figured in the first list the Reserve Bank of India had sent to the banks in June 2017 to initiate bankruptcy proceedings against under the newly minted Insolvency and Bankruptcy Code, 2016 (IBC).
The middle-class families, who have had their money stuck for as many as eight to nine years, can now hope to get their dream asset in nine to 42 months as promised by NBCC.

Telecom Body Defers Zero IUC by a Year

The telecom regulator deferred by a year a plan to scrap a levy charged by operators for handling incoming calls from rival networks, offering relief to older telcos that generate a part of their revenue from interconnect usage charges (IUC).
The Telecom Regulatory Authority of India (TRAI) will now scrap IUC from 1 January 2021 instead of next month. As a result, operators will continue to earn 6 paise a minute for every mobile call they receive on their networks till 31 December, 2020.

Boeing to Halt Production of 737 Max

Boeing has suspended production of the 737 MAX starting January 2020 as it struggles to get approval from regulators to put the plane back in the air.
Boeing's decision is expected to pose further problems not only for SpiceJet, which has ordered 205 of these aircraft in 2017, but also for other airlines worldwide.

Elgi Equipments Acquires Michigan Air Solutions

Elgi Compressors USA Inc, a subsidiary of Elgi Equipment Limited, acquired Michigan Air Solutions, one of the largest independent air compressor distributors in Michigan.
With this acquisition, Elgi has expanded its presence in the US.
According to Jairam Varadaraj, Managing Director, Elgi Equipments Ltd, Michigan Air Solutions complements Elgi's global growth strategy, and brings significant market reach and scale, that will add further value to our product offerings and go-to-marker plan across the region.
Elgi's acquisition of Michigan Air is a continuation of strategy to invest in select, inorganic opportunities to gain presence in the North American market.

Dec 17, 2019

BYD Plans to Make India a Hub

V. Rishi Kumar BYD Co Limited, the diversified business conglomerate based in Shenzhen, China, is on expansion mode in India through the 'Make in India' drive.
It is in the process of stepping up its engagement in India in the entire electric mobility chain and electronics, while also seeking to transform it as a hub for the region.
The company is evaluating the possibility of introducing pure electric passenger vehicles and exploring business prospect for rail transit.
Build Your Dreams, set up in the Shenzhen Special Economic Zone in 1995, has made its India entry with a tie up with Olectra Greentech (Goldstone) for supply of electric buses. It is now looking at expanding its manufacturing base in Chennai, where it manufacturers electric buses.

Tata Motors in Alliance Talks with Chinese Firms

Tata Motors Ltd, India's largest vehicle maker, is in initial talks with a couple of Chinese automobile companies for a tie-up for its passenger vehicles business.
These companies may either invest directly in Tata Motors or form a joint venture. The collaboration could include joint development of technologies related to electric mobility, sharing of manufacturing capacities, development of engines and platforms and other aspects of the business.
The move could help Tata Motors significantly reduce its debt for its India business that stood at Rs. 23,365.49 crore as of 30 September, according to Bloomberg. Its consolidated debt, including that of its UK unit Jaguar Land Rover, stood at Rs. 95,465.08 crore.

Legacy Arms Help Air India

At a time when Air India (AI) is striving to keep the operations going despite serious financial crunch, several of its arms are helping it stay afloat.
These institutions, namely its engineering division, now called Air India Engineering Services Ltd. that runs MRO services, its security department with 3,600 personnel as well as its Aviation Security Training Institute, in-house crew training institute and simulator facility are helping it to manage operations in a cost-effective manner.
The government has cut the financial lifeline to the loss-making national carrier which is being sold or dis-invested through a listing.

U.K. HC Rejects Plea against Anil Ambani

The UK High Court dismissed an application for summary judgment by Chinese banks for a $680 million claim against Anil Ambani.
The court, however, passed a conditional order on the basis that Ambani's defence against the claim, while possible, is improbable.
Now, the Business and Property Courts of England and Wales asked Ambani's legal team to submit further evidence in his defence and prove that the claim by Chinese lenders holds no merit.

ArcelorMittal Forms JV with Nippon Steel

ArcelorMittal SA formed a joint venture with Nippon Steel Corp to run Essar Steel, the bankrupt Indian steel company that ArcelorMittal took over.
India's Supreme Court had cleared the way for ArcelorMittal to take over Essar Steel following a legal tussle that dragged through multiple courts for over two years. ArcelorMittal and Nippon Steel had bid jointly for Essar, which has a capacity of 10 million tonnes of steel per year.
ArcelorMittal holds 60% stake in the new venture - ArcelorMittal Nippon Steel India Ltd - the world's biggest steelmaker.
The new company aims to export up to 15 million tonnes of finished steel.
Essar Steel, which had debts of nearly 500 billion rupees ($7 billion), was among twelve large steel and infrastructure companies that were referred to India's bankruptcy court in 2017.

RBI Asks Banks to Waive NEFT Charges

Giving a big boost to digital funds movement, the Reserve Bank of India (RBI) operationalised round-the-clock (24 X 7 basis) availability of the National Electronic Fund Transfer (NEFT) and asked the banks not to levy any charges on NEFT transfer from savings bank account holders.
Customers can now transfer money through NEFT without paying any charges any time of the day whereas banks charge a fee for fund transfer through cheques and demand draft (DD).
In order to give further impetus to digital retail payments, it has now been decided that member banks shall not levy any charges from their savings bank account holders for funds transfers done through NEFT system which are initiated online (internet banking and/ or mobile apps of the banks).

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