Daily Financial News Analysis – 19th Oct’20

Table of Contents

Sunset Date – Import Tariffs

India may introduce a SUNSET DATE for higher import tariffs imposed on goods such as mobile phones and televisions
AIM is to boost local manufacturing
The idea is to ensure that the local industry makes sincere attempts to become competitive instead of just relying on protection from higher import tariffs.
The government had raised import tariffs on a host of products as part of the phased manufacturing plan (PMP) in the electronics sector.
The programme may be expanded to include some other sectors under the Atmanirbhar Bharat initiative.
The focus is now to ensure there is increased value addition in the country under the PMP and production-linked incentive (PLI) scheme.
India had in July imposed restrictions on the import of some types of colour televisions, imports of which added up to $800 million in FY20.

Last week, curbs were imposed on the import of air conditioners.
Electrical and electronics imports were worth nearly $50 billion in FY20.
Large appliances, smartphones and consumer electronics have dominated the first leg of festive sales on Amazon and Flipkart.
Card discounts, exchange schemes and zero-interest instalment offers.
Brick-and-mortar retailers have also reported an uptick
The first 48 hours of Amazon’s ongoing Great Indian Festival sale have seen the heaviest sales in 7 years of operations in the country.
Flipkart said that in two days sellers notched up as much business as they did in six days of the year-earlier sale.
Brands such as Samsung, Apple and LG also reported their highest ever ecommerce sales in these two days.
The festive season accounts for 35-40% of annual revenue for most consumer companies in India.
Leading brick-and-mortar retailers such as Reliance Digital, Vijay Sales, Sangeetha Mobiles, Great Eastern Retail and Arvind Lifestyle Brands said they have seen a pickup in sales over last year in the same period.
Most retailers said they expect a bigger jump in business this week with Dussehra next weekend

The first-ever SCO Startup Forum will be launched on 27th October 2020 ahead of the SCO trade ministers meeting on 28th October.
The forum will lay the foundation for multilateral cooperation and engagement among the SCO Member States to develop and hone their startup ecosystems, collectively.
Innovation and Startups will be the key focus area of SCO Heads of Government meeting on 30th November 2020 to be hosted by India.
The Forum shall identify areas of cooperation by launching multiple entrepreneurial activities like

It will aid to understand the cultural and economic features of the startup ecosystem in the SCO Member States.
In the run up to the launch of SCO Startup Forum, a virtual SCO preparatory Seminar and a workshop were also organized by India.
Around 40 Indian Missions roped in to further augment Startup India efforts.
India is currently the third-largest startup ecosystem in the world with over 35,000 startups, close to 25% of which are core technology startups operating in areas of AI, Robotics, Cloud Computing, IoT, Digital Health, Financial & Education Technology.
The ‘Startup India’ has launched 10 bilateral bridges since its inception and has helped many technology-based startups to expand their businesses to global markets.
As part of planned SCO ministerial meetings in the run up to SCO Heads of Government meeting, Ministers of Law and Justice of SCO member states have met on Friday where they acknowledged the need for cooperation in alternative dispute resolution mechanisms.
In the view of the coronavirus pandemic, they emphasized the high relevance of mutual exchange of legal information on counteraction to the spread of the pandemic.

IMF Managing Director Kristalina Georgieva said a six-month extension of the Group of 20 major economies’ freeze in official bilateral payments would help low-income countries hammered by the COVID-19 pandemic, but more urgent action was needed.
She urged creditors and countries facing debt distress to start restructuring debts without delay.
Georgieva’s remarks come amid growing concern about sharp increases in debt levels, especially among low- and middle-income countries hard hit by the new coronavirus, a drop in tourism and in some cases, lower oil prices.
The G20 Debt Service Suspension Initiative has helped 44 countries defer $5 billion to spend on mitigating the COVID-19 crisis, but its efficacy has been limited by the absence of private creditors and China’s failure to include all state-owned institutions.
Many poorer countries have been reluctant to ask for a freeze in government bond payments, worried that doing so could harm their ability to borrow money in the future.
“Doing too little too late is costly to debtors, costly also to creditors.” – Kristalina Georgieva

MSME Ministry has now written to top management of over 2800 corporates by name to make payment of pending dues of MSMEs in this month itself.
Last month, It may be noted, Ministry of MSME had written to Top 500 corporates of India about the pending payments of MSMEs.
Ministry has said that very good response has been seen from the corporate India.
Out of the last five months, the maximum payments to MSMEs have happened in the month of September, 2020.
Not only that, in that timeframe, even the procurement and transaction appears to be maximum in the month of September.
MSME Ministry has informed that more than Rs. 13400 crore have been paid by Central Public Sector Enterprises (CPSEs) alone in the last five months.
Out of this, payments worth Rs. 3700 crore have happened in September only.
Ministry has complimented the Corporate sector of the country for this.
On its part, Ministry of MSME has made relentless efforts including personal follow-up and digital intervention for the purpose of assisting MSMEs of the country to get release of their dues from various procurers.
Ministry says that if the cash flows of MSMEs improve, they can make use of the festival season when there is opportunity to earn by supplying goods and services.
In fact, some of the MSMEs look for such a period for their sustenance of whole year.