Daily Financial News Analysis – 7th Sep’20

Table of Contents

Production Linked Incentive Scheme

Applications by iPhone contract makers Foxconn, Pegatron and Wistron as well as Samsung, Karbonn, Lava and Dixon to export mobile phones worth around $100 billion from India have been cleared by the empowered group.
Under the production linked incentive scheme.
All the applications will be placed before the cabinet probably this week.
Members of the empowered committee include the Niti Aayog CEO along with the secretaries of economic affairs, expenditure, revenue, MeitY, DPIIT and DGFT.
The extraordinary response to the PLI shows enormous trust of the global community in India’s manufacturing capability and leadership.

Defence minister Rajnath Singh met his Iranian counterpart Brigadier General Amir Hatami in Tehran on Saturday en route to India from Russia.
Singh became the first Indian minister to visit Iran since the outbreak of Covid-19.
The Iranian minister said negotiations rather than a military approach will work in Afghanistan.

Singh also called for diversification and expansion of trade and commerce.
Both sides are trying to expedite the conclusion of Preferential Trade Agreement.
Both ministers laid stress on the historical, civilisational and linguistic ties between the two countries, marked by extensive people-topeople contacts.
Farsi language continues to be read in Indian academic institutions.
It may be recalled that India, Iran and Russia had collaborated to safeguard their interests by supporting the Northern Alliance when Taliban was in power between 1996 and 2001.
India’s two-year stint as a non-permanent member of the UNSC will begin from January 1.
Amid the US sanctions on Iran, Hatami hoped that India would be impartial while dealing with global issues at the UN Security Council.

April-August 2020: More than 30% of restaurants and bars in India have shut down permanently.
National Restaurants Association of India (NRAI)
India’s largest listed restaurant chain Jubilant Food Works (JFL), which operates 1,354 stores including Domino’s Pizza and Dunkin Donuts, said in a post-earnings conference call that it is shutting down 105 unprofitable dine-in stores.
A report by delivery and search company Zomato late last month said 30% of restaurants closed due to Covid-19 are unlikely to reopen even after the pandemic ends.
The industry is operating at just 8-10% gross merchandise value (GMV) from prepandemic levels, Zomato said.
However, the report said deliveries have recovered 75-80% of pre-Covid GMVs.
Katriar called for liquidity and policy support from the government, landlords moving to revenue share models temporarily, suppliers offering better prices and credit terms and aggregators lending support.

The festive season in India falls between October and November every year during which festivals such as Dussehra, Durga Puja and Diwali are celebrated.
The festive season is unlikely to bring any cheers to the travel industry, including the airline sector.
Less than 20% of people polled plan to travel during October-November amid the pandemic.

DPIIT has started the exercise for the ranking of states and UTs in terms of ease of doing business for the next year.
DPIIT secretary Guruprasad Mohapatra said the ease of doing business ranking for next year would be released by March 2021.
We have communicated the Business Reform Action Plan (BRAP) for next year with the states/UTs, which they have to implement.

Fugitive diamond merchant Nirav Modi, who has been lodged at a prison in London since his arrest in March last year, is set to appear via videolink for the second leg of his extradition trial at a UK court.
The 49-year-old jeweller is fighting extradition charges related to the estimated $2-billion Punjab National Bank (PNB) fraud and money laundering case brought by the Indian government.
District Judge Samuel Goozee has directed Modi’s appearance from a room in Wandsworth Prison in south-west London with social distancing norms in place for the part-remote setting for the five day hearing scheduled to conclude on Friday.
Justice Goozee had presided over the first leg of the extradition in May, during which the CPS sought to establish a prima facie case of fraud and money laundering against Modi.
The upcoming hearings are ear-marked to complete those arguments after the Indian government had submitted additional “corroboratory evidence”.
It will then go on to deal with the additional extradition request, made by the Indian authorities and certified by UK Home Secretary Priti Patel earlier this year, which add on the charges of “causing the disappearance of evidence” and intimidating witnesses or “criminal intimidation to cause death” against Modi.