Finshots:

1. Why the Tokyo stock exchange failed?

The arrowhead system developed by fujitsu is known to have some glitches. But, they build
redundancies. Even these, redundancies failed. In typical Japanese style took accountability instead
of blaming.

2. Bilateral netting

Sharing risks with other banks. Could have freed up 2000 crores in 2018-2019

3. Why is Adani betting big on airports?

Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati, and Thiruvananthapuram . 3 ways of earning

revenue:

a. aero revenues: allowing airlines to operate in the airport. But there are regulations to stop
overcharging.

b. non-aero : rent from stalls and shops set up

c. Real estate: provide land to hotels, offices etc and since it is a 50 year lease, it will lead to good
benefits.

4. Google tax: any app on google play store has to pay 30% tax on every sale they make in app. But
Netflix found a loop hole by asking credit card details. This is a monopoly. all apps downloaded from
its Play Store were going to be required to route their revenues through that store and pay a 30%
fee to Google as well.

5. Do export bans work?

By banning export you are increasing supply, which reduces prices. But this leads to loss of
reputation. And in India’s case the storage infra, is not adequate which leads to more problems.and
also changing production plans frequently also leads to price swings.

6. HSBC ponzi scheme: Although it notices huge amounts from us to hong kong , it ignored them.

7. Shapoorji -tata: Shapoorji is planning to sell its stakes in tata to raise money, but tata refusing this

8. Jio planning to build smartphones: this is good for local Indian manufacturers like karbon and lava,
but spells trouble for xiaomi
9. Tesla is in talks with Karnataka govt to set up R&D center.

SCM pro telegram:

Oct4:

1. India's exports turn positive for the first time in seven months. Merchandise exports registered
5.3% growth in September, driven mostly by pick up in external demand for goods in sectors such as
engineering, petroleum, pharmaceuticals and readymade garments.

2. Softbank's new food service robot Servi could replace waitstaff and food runners at restaurants.
Japanese company Softbank debuted Servi, a new food service robot. Softbank is the company
behind humanoid robot Pepper and the owner of Boston Dynamics. Servi has already worked at
Denny's and other restaurants amid Japan's labor shortage.

Oct 1:

1. Cisco webex: second largest virtual meeting app in india.

2. Amazon US launches Amazon explore, a virtual tourism service, for staying at home and exploring
new areas. It is a live streaming app and will use local experts as guides.

3. DHL go green initiatives: Thames freight services, with final delivery by bike. And rapid river freight
service in venice.

Sept 29:

1. Banning huwaeii in us, Microsoft azure cloud services is going for 5g , which powers self driving
cars, remote surgery and more automated manufacturing.

2. Tatas supper app which bring all its consumer business under on channel. Walmart may buy a
stake in this. a multipurpose online platform combining fashion, lifestyle and electronics retail, food
and grocery, insurance and financial services, as well as digital content and education. may get
flipkart data and phonpe access. A super app is a platform developed by a company offering various
services under one umbrella.

The Tata Group will be an entrant in an already crowded super app ecosystem of India. Currently,
Reliance Industries, under its Jio umbrella, is consolidated various services and offerings such as
shopping, content streaming, groceries, payments, cloud storage services, ticket bookings, etc.
Further, Alibaba Group investee Paytm has also brought together services like payments, ticket
bookings, games, online shopping, banking, consumer finance, etc into one app. Flipkart Group-
owned payments app PhonePe has tied up with companies such as Ola Cabs, Swiggy, Grofers, AJio,
Decathlon, Delhi Metro, booking.com, etc to offer these services from within its own app.

Apart from increased revenue realisation due to consolidation of services at one place, such apps
also provide companies large swaths of consumer data which can then be harnessed to learn more
about user behaviour.

3. FOxcon and other apple suppliers are planning to use the pli’s 4-6 % of incremental sales. Make
india an export hub.

4. KIRANA CHAARZER: This startup wants to turn kirana stores into electric vehicle charging stations.
Setting up charging infrastructure is a crucial part of India’s EV dream. Kirana Charzer has set out to
change the charging infrastructure in the country with a simple plan – turning your neighbourhood
kirana store, restaurant or even office into a charging station. Having launched in February this year,
the startup already has over 2000 orders, out of which 520 are from kirana stores.

Lalpath labs left data exposed on a public server for about an year. Contained more than 9000 files

Gaming industry in india:

Atmanirbhar bharat : Double domestic production and quadruple exports of defence

Amazon mini fulfilment centers: 10th of the size of fulfilment centres, in line with bringing inventory
closer to customer. Will reduce carbon footprint

Tea industry boom due to wfh

Snapdeal used robots for delivery, in tie up with autonomy

Youtube shorts alternative to tiktok

Denmark switch to ev may cost its welfare system: as fuel taxes will go down
Hul Carbon rainbow: each colour is a source for carbon and creates a circular economy

Apna.co : Like linkedin but for blue collar jobs

Knowledge Workers Are More Productive from Home. Here are the key findings - Lockdown helps us
focus on the work that really matters. We are spending 12% less time drawn into large meetings and
9% more time interacting with customers and external partners. Lockdown helps us take
responsibility for our own schedules.

Reliance Retail acquires Kishore Biyani’s Future Group for ₹25,000 crore in a ‘slump sale’. Aside from
Future’s 1500 retail stores, Reliance will also get control of the logistics and warehousing business.

Apple quicklook: to put a product you are interested in your personal space by using ar

Jio Smart metres: BY installing smart meters revenue of discoms will increase. Physical collection of
money by discoms is not required as a prepaid plan can be used. Around 15-20% rise in revenue was
observed. bility to remotely monitor and collect meter readings.

Airtel and BSNL in collaboration with hughes INDIA are planning to bring satellite internet to 2.5 lakh
gram panchayats across india.

New traffic law amendments (larger fines) could not curb traffic accidents.

Quad countries : India,Australia USa and japan are looking to reduce supply chain dependence on
CHIna and also india is partnering with USA to use geospatial data for improving navigational and
targeting capabilities

The Delhi government's decision to exempt road tax on battery-operated vehicles under its new
Electric Vehicle Policy will significantly push down the prices of electric vehicles in the national
capital. The crucial decision to provide monetary assistance can add to the much-needed increase in
the popularity of the EVs. As sales numbers indicate, India has underperformed in its transition from
IC to EV engine, but experts believe Delhi's policy push can be a good start.

EV startup Ultravioleete performance-oriented motorcycle it is tvs backed

Pepper content connects organisations to content creators such as graphic designers,writers etc.
Our mission is to disrupt the entire content creation industry at scale and create a stronger, high
quality, and more organised ecosystem for content creators. 

Tata Motors and hdfc are partnering to provide financing for vehicles from tata

Royal enfield motorcycle personalisation tool, which provides customer a tool to personalise colour
and trim etc.

India has put a ban on air conditioners from China to promote local manufacturing. Voltas and
havells are going to benefit from this. Contract manufacturing will also get boost from this .
Panasonic will share its manufacturing facilities for ac,fridge etc. the proprietary technology of
Panasonic wont be shared . 30% imported products will be manufactured here in phase 1 and in
phase 2 they will be manufactured here.

Samsung will modernise its plants to produce TV’s locally. Contract manufacturing with DIXON.

101 defense items are banned. a big step toward self-reliance in defense production. The items on
the list, worth a total of $53.4 billion, are to be manufactured in India, with local companies as prime
contractors. Between 2020 to 2024.

Tyres, agarbattis, and TV sets are also banned

Examples of contract manufacturing: Apple,Microsoft contracting to Foxconn.

Vietnam and Bangladesh are rapidly becoming China substitute. More than half of Smasung smart
phone manufacturing is done in Vietnam whereas Bangladesh is considered the best for garments

Micromax once the largest samart-phone manufacturing in india. In 2014, Micromax created history

when it beat South Korean consumer electronics giant Samsung in total smartphone shipments in
the domestic market. has a strong brand recall.

India also banned 59 Chinese apps including TikTok over security concerns.
Demand for Samsung phones grew in the June quarter and their market share jumped to 26% from
16% in the March quarter.

Netflix, Amazon ramp up regional content as language-specific OTTs gain scale

2.2 million Facebook and Instagram ads rejected ahead of US vote: Nick Clegg to not repeat events
which happened before 2016 election

Launched by Prime Minister Narendra Modi in August, the National Digital Health Mission aims to
create a mega database of all the health related information of every Indian citizen - at least, those
who choose to enroll in it. This will be facilitated via a personalised health ID that citizens can create
using their mobile or Aadhar number. Once they do, it’ll start storing details of every doctor or clinic
they visit, every test or drug that’s prescribed to them, and all the medical conditions that afflict
them. As you can imagine, this will take a lot of guesswork out of doctor visits.

Consider second opinions. In the current system, if you’re not satisfied with your doctor and decide
to consult another one, you’ll have to carry loose prescriptions and spend a good amount of time
catching them up with your medical history. Even then, you may miss out on some salient points.
However, if you have a health ID, you can just give them access to your previous records with the tap
of a few buttons.

Tata eyes BigBasket

The Tata Group is reportedly in talks to buy a minority stake in online
grocer BigBasket, which has been looking to raise $200 million in
growth capital

Flipkart and Walmart to invest in Ninjacart, to improve its grocery

distribution

Paytm mini app store for 1 million apps, to counter googles new policy
of taking 30% of in app purchases.

Delhi government exempts EV of rod taxes.

Most powerful women:

1.Christine Lagarde: President of European Central Bank. Due to lot of

geopolitical activity going on in Europe, she has an important role to
play.

2. Melinda Gates: Philantrophy through bill and Melinda gates

foundation. To tackle education,poverty,sanitation contraception.

3. Ginni Rommety: Has helped in transitioning IBM into a data

company, reinvented the while portfolio to be offered by IBM.
Acquired Red hat and made IBM competitive in the Cloud computing
space.

Why India is flagging in China+1

sweepstakes
9 min read . Updated: 19 Oct 2020, 10:44 PM ISTRahul Jacob

Vietnam and Bangladesh are doing well in the global race to replace China’s exports. India
needs to act quickly
Topics

Long Reads Long Reads

Earlier this month, Vietnam earned a distinctive stripe in its bid to be an Asian
Tiger, that accolade of rapid economic development that Korea, Taiwan
and China achieved over the past several decades. It was accused of currency
manipulation by the US trade department, putting its booming exports in the sights
of the Trump administration for possible retaliation.
September’s economic data for the country of 100 million also proved buoyant.
Exports were up 18% year on year in September on the back of a 26% jump in
computers/components exports and a 63% jump in machinery/accessories exports
in the third quarter. More than half of Samsung’s smartphone production is from
Vietnam.
Vietnam is well out in front in the global race to replace some of China’s export
production. In fact, it is now grappling with the problems of success. While the
outlook for the country is “particularly strong," a banker based in Ho Chi Minh
City says that the challenge now is ensuring its ports, roads and airports can keep
up “with the next $100 billion in foreign direct investment (FDI). It’s a disciplined
Communist economy with a high level of corruption, but they do execute (plans)
very well". Morgan Stanley’s emerging markets strategist Ruchir Sharma dubs it
the next Asian Miracle and points out that FDI has averaged more than 6% of
G.D.P. in Vietnam, the highest ratio in any emerging country.
Bill Stoops, Ho Chi Minh City-based chief investment officer of Dragon Capital,
the largest listed equity investor in the country, says Vietnam’s export mix has
changed dramatically. Ten years ago, it was skewed towards crude oil and
agriculture; last year fish was the only non-manufacturing product in among its top
ten exports.
“Also, about 65% of the country is still rural so there is an endless supply of people
willing to move to cities. I am not concerned about Vietnam’s ability to
accommodate more FDI," said Stoops. Still, the labour market is tightening;
unemployment dropped to 2.5% in September, in part because it is business as
usual in Vietnam. Covid-19 in Vietnam has seemed akin to a seasonal flu: total
cases since the pandemic began are about 1,100.
The past four weeks have provided evidence from India and Indonesia to Vietnam
and Bangladesh that the race to supplement China’s role as the world’s factory has
quickened dramatically. What was once referred to as the China + 1 strategy to
managing global production a decade ago after the Chinese government forced up
factory wages by double-digit levels is in vogue once again.
This time the driver is a desire to reduce dependence on China as companies want
to guard against disruptions to supply chains after the experience early this year
after China’s lockdown in response to the covid-19 pandemic as well as to find
low-cost labour.
As a McKinsey Global Institute article on supply chain resilience recently
observed, the threats to supply chains have become more frequent. Disruptions
caused by 40 extreme weather events associated with climate change cost more
than $1 billion each in 2019 alone. The tech war between China and the US adds
another dimension of uncertainty.
For all these reasons, companies are seeking to diversify their production bases and
Asia’s governments in turn are responding by seeking to make their countries more
attractive to manufacturing investment. The Modi government’s pushing through
Parliament of significant labour law reforms in late September was quickly
matched by President Joko Widodo’s government’s changes to Indonesia’s stifling
labour laws, passed by its Parliament about ten days later.
Last week, in preparation for losing its least-developed-country preferential trade
privileges by 2024, Dhaka’s ministry of commerce was reported to be negotiating
17 preferential and free trade agreements, which have been critical to maintaining
its huge lead over India in garment exports.
A recent Goldman Sachs survey found that for companies contemplating
diversifying, Vietnam followed by India top the list as potential secondary
production bases (see graphic). But, the survey also found that different
assessments applied to different industries. In garments, for instance, Bangladesh is
the prime beneficiary and Cambodia is on the ascendant.
Last week, the International Monetary Fund sparked a flurry of headlines by
declaring that Bangladesh would momentarily surpass India’s per capita income in
2020. This reflects its success as a labour-intensive producer of garments, where its
exports are double those of India’s, and also its performance on human
development indicators.
To be sure, the Goldman report (“If not China, then Where") cautions that the story
of companies moving from China is more “nuanced" than headlines suggest.
“Anecdotes of China manufacturing relocation can be misleading," the report said,
arguing that China’s superior ports and highways and well-educated workforce
mean that companies in most industries will continue to locate the major part of
their production there.
Goldman reports that in industries such as automobiles and auto components while
some production is being started elsewhere, many companies are simultaneously
expanding production in China because its large domestic market remains a huge
draw.
The Indian response
This post Covid moment of seemingly large opportunities to draw manufacturing
FDI away from China is on closer inspection riddled with legacy problems for
those countries that have been slow to reform.
The risk is that countries such as India and Indonesia could fail to get on the
springboard of export-led growth that has propelled Vietnam and Bangladesh
despite the pandemic while struggling to compete directly with Chinese workers’
higher productivity levels, its first world roads and ports and the subsidies to
manufacturers.
But India has succeeded spectacularly in the recent past. As a recent paper by
Ashoka University’s Arvind Subramanian and Soumitro Chatterjee underlines,
India was itself among the fastest growing export-led economies for about two
decades from the mid 1990s. But its performance in labour-intensive exports is
well below potential. A notional calculation in their paper (published in The Indian
Express) of the opportunities lost to countries such as Vietnam, Cambodia and
Bangladesh shows that India is “defying the comparative advantage" of having the
world’s largest youthful workforce.
As the tragic migration back to villages by tens of millions showed in late March
after India abruptly went into lockdown, the jobs held by much of India’s labour
force remain tenuous in the extreme.
Still, the Modi government appears determined to catch up. Its labour reforms
should help create an environment for small companies to grow into mid-sized
ones as they allow for easier hiring of contract workers and allow firms of up to
300 employees to lay off workers without seeking government permission. It has
created a single-window clearance for new investments, according to a report in
Business Standard. It also created a productivity linked incentive scheme to draw
mobile phone and component manufacturers to India.
In late September, three of Apple’s largest contract manufacturers were reported to
be investing almost $1 billion in India in the next five years to take advantage of
the government’s production-linked scheme that offers companies cash for up to
4% to 6% of an increase in sales of locally-made smartphones over the levels they
reached in 2019-20.
The hope is that this will lead to India becoming an export base for smartphone
manufacture. (Tariffs on assembling mobile phones have increased by 20% in
successive moves since the Modi government took power.) But the complex
scheme is also a way to compensate companies for subsidies that are no longer
allowed by the World Trade Organisation.
As the Ministry of Electronics and Information Technology website explains with
admirable candour, “The domestic electronics hardware manufacturing sector faces
lack of a level playing field vis-à-vis competing nations. The sector suffers
disability of around 8.5% to 11% on account of lack of adequate infrastructure,
domestic supply chain and logistics; high cost of finance; inadequate availability of
quality power; limited design capabilities and focus on R&D by the industry; and
inadequacies in skill development."
Same old story
Muddled logic also underpins the pledge to build a self-reliant India and India’s
trade policy in general. As Subramanian and Chatterjee point out, since 2014, there
have been 3,200 tariff increases on most-favored-nation imports; the average tariff
has jumped from 13% to nearly 18%.
Speaking to me for a Mint Long Story in August, mid-sized exporter after exporter
in industries ranging from apparel to furniture complained of the effects of higher
tariffs and non tariff barriers on imported inputs they needed to compete overseas.
Since then, the drop in imports coming into India because of additional customs
scrutiny on countries of origin has increased the compliance burden on our small
and midsize businesses, and, coupled with the drop in demand for imports because
the economy has slowed down, has led to a shortage of shipping containers for
export shipments.
Japan, Korea and Taiwan used industrial policy to manage economic development
50 years ago as did Nehruvian India, but the problem with India’s renewed love
affair with import substitution is that supply chains are much more international
than before, and Indian exporters’ competitors in Vietnam and Bangladesh are not
similarly handicapped.
Trade in intermediate goods to keep supply chains humming have tripled since
2000 to $10 trillion, according to McKinsey. Mobile phones and computer
components in north Asia often cross borders 20 to 30 times before the finished
product is finally shipped to retailers overseas. Indian customs officials are already
notorious; a rallying cry such as self-reliant India will be used to harass small and
midsize exporters in particular.
India’s main weakness as it enters the race to profit from the opportunities to be the
+ 1 to China in global manufacturing is that economic policy has long played
second fiddle to the distractions of politics and been undermined by a socialist
bureaucracy. Bangladesh’s politics have often been toxic as well but the
government responds energetically to the needs of the garment industry, creating
the equivalent of a hotline between Bangladesh’s garment manufacturers’ industry
body and the commerce ministry.
In Vietnam, Stoops similarly characterises the Communist leadership’s approach to
economic development as pragmatic. The government focused on primary and
secondary education and healthcare while building up its industrial base. Says
Stoops: “The Communist government has a policy-planner consensus approach."
Vietnam’s manufactured exports increased 25% last year to reach $304 billion.
India, with 12 times its population, saw its exports decline slightly to $323bn while
Guangdong, China’s most industrialised province with 113 million people, boasted
2019 exports of $444 billion. The challenge for India is that its competitors
paradoxically have both the purposefulness of the tortoise and the speed of a hare.