Good morning, folks! What better way to start Independence Day week with all three main stories from India. When there’s so much happening within our borders worth knowing, why venture further?
Mission Defence Atmanirbhar
Starting the independence week with a bang, Defence Minister Rajnath Singh announced a negative list for big defence weapon imports, ranging from guns to missiles to helicopters. Not wanting to take any chances, the number was capped at an auspicious 101.
More details please: This ban on outright imports will be imposed progressively from December 2020 to December 2025. However, partnerships for domestic manufacturing would be welcomed, which also got a boost from the increase in FDI limits in the sector from 49% to 74%. Within the budget also, Ministry of Defence has carved out Rs. 52,000 Crore for domestic capital procurement from the total outlay of Rs. 1.18 Lakh Crore
Got any more numbers? Currently, India is the second largest weapon importer at 9.5%, second only to Saudi Arabia. With this negative import list, current estimates suggest that contacts worth Rs. 4 Lakh Crores will come the way of domestic weapon manufacturers. One such beneficiary, already publicly licking it’s lips at the opportunity is Bharat Forge calling the move a “strategic step” towards Atmanirbhar Bharat.
The beacon of India’s global vaccine efforts
For anyone following the progress of coronavirus vaccine, the one name that can’t have escaped their attention is the Pune-based Serum Institute of India (SII).
Producer to vaccine front runners: SII inked a deal way back in June with Astrazeneca and the Oxford vaccine effort to produce one billion doses. Last week, SII got the DGCI approval to conduct Phase 2 and Phase 3 human trials for the vaccine in 1600 volunteers over 17 locations in the country. Increasing the probability of getting the right vaccine, late last month, SII has now also got the exclusive rights in India for the American candidate Novavax’s vaccine.
The funding dose: While SII might have the expertise to manufacture the drug, Bill and Melinda Gates foundation stepped in to do their part by announcing a funding of $150 million through the Gavi foundation. This funding is to help in expanding manufacturing capacity so that a 100 million doses can be produced as early as 2021 first half for India and other countries. The condition? Both vaccines can be priced to a maximum of $3 or approximately Rs. 225 a dose. In the midst of all this, CEO Adar Poonawala managed to keep his tongue firmly in cheek as he responded to Ronnie Screwvala on Twitter that enough doses would be kept for the small Parsi community.
Handloom industry skimmed
With a catchy slogan “Minimum Government Maximum Governance” an intent to become a lean machine, the government scrapped the All India Handicrafts Board and the All India Handloom Board.
Why? As per the Print, Sanjay Rastogi, development commissioner for handlooms, pointed out to the redundancy of the board stating they hadn’t even met in the last 6-7 years. He also said that instead, a draft textile policy taking into account views of all stakeholders is being worked upon. Although, dare we say, abolish the old when the new is all set to come in place?
What’s the concern here? As per the Fourth All India Handloom Census, 31.45 lakh households derive their livelihood from the sector, powering the country to be home to 95% of the world’s hand made textiles. The handicraft board had a vintage of 70 years while the handloom board was a more recent entrant, established in 1992, both with an intent of helping the government formulate policies beneficial to the sector. Industry veterans like activist Laila Taybji and public policy reviewer Dr. D. Narasimha Reddy are questioning the rationality of the move. Considering what an important part of our heritage the industry is, and the challenges it anyway faces in the presence of power looms, kid gloves would probably work better than this attempted iron fist.
Ram and Shyam of pharma results: Late last week was a lesson for investors that not all pharmaceutical companies will have the same cakewalk of profits from this pandemic. Lupin announced a 59% drop in it’s consolidated net profit citing weak business in the main markets of India and US thanks to the lockdown. Cipla, on the other hand logged in a 21% higher profit YoY, with sales rising in all markets, and 64% in emerging markets apart from India.
Stating the obvious: National Council of Applied Economic Research or NCAER carried out their quarterly Business Confidence Index or BCI survey in June 2020 to come to unsurprising conclusions. BCI stood at 46.4, dropping from 77.4 in the last quarter and a 62% drop YoY. This is the lowest figure in the recorded history of the survey.
India retains the title of ICC T20 World Cup 2021 host: Although the 2020 edition meant to be hosted in Australia New Zealand was pushed to 2022, India remain the hosts for the tournament in 2021. Scheduled for October-November next year, it is hoped that things will be much smoother by then.
Battle’s a tik-toking: The tik tok story in the US is getting all kinds of absurd. First, Donald Trump gives a deadline of 15th September for US business to be taken over by an American country. Then, he asks for a cut from the proceedings, of course, for the American Treasury. Microsoft volunteers to be patriotic and starts counting out the cash, when it’s founder Bill Gates calls the deal a “poisoned chalice”. Finally, Twitter starts chirping it’s interest in Tik Tok. There is definitely more drama in store for the next one month.
Cheer for the Canadians: For all those dreaming about a Canadian PR, there is some good news. As per the July numbers, Canada added 419,000 jobs. While the number was higher than expected, a lot of these were part time jobs. The national unemployment rate showed steady progress to come down from 13.7% in May to 10.9% in July.
There is only one way to describe such a day in equity markets – flat with Asian Paints contributing to the green with a 4% rise. Although the mid and small cap indices did their best to boost their clan with S&P BSE Mid Cap index ending at 1.4% gain and S&P BSE Small cap index gaining 0.78%.
Friday also saw the listing of Mindspace Business Parks REIT, the second launch in India in this space. Considering the fairly resilient performance of debutante Embassy Office Parks, Mindspace REIT got investors enthusiastic enough to garner a listing at 11% premium.
Even in the face of a global pandemic, some people have the ability to get their quirky on. Exhibit A, Vedic, a vegetarian multi-cuisine restaurant in Jodhpur. Their newest addition to the menu is a Covid curry, malai kofta version where the dumpling has the pointy edges in the shape of a virus. The best option to wipe up this curry? Mask naan where our good old flatbread is made in the shape of, you guessed it, face mask. Whether it manages to get more people to try it or not, the restaurant has definitely managed some PR with it’s creative streak.