Morning Scan: All the big stories to get you started for the day

A round-up of top newspaper stories

#1. Google in talks with Dixon to make Pixel 8 smartphones in India

Google is in advanced discussions with India’s Dixon Technologies and Bharat FIH, an arm of Taiwan’s Foxconn, to produce its flagship smartphone Pixel 8 in India. Sundar Pichai, chief executive of Google’s parent Alphabet, announced that his company’s first made-in-India Pixel devices will be rolled out in early 2024. Google’s decision to make its smartphones in the country follows the start of its Chromebook production in India earlier this month in partnership with HP.

Why it’s important: The latest decision by Google will provide a significant boost to India’s ambitions to emerge as a global electronics manufacturing hub. It will become the latest global phonemaker after Apple and Samsung to build its flagship devices in the country.

#2. Government will not restrict imports of computer hardware products

The Indian government has announced it will not restrict import of laptops and other IT hardware products, while unveiling a new contactless import authorization system. It had earlier said it was planning to bring several IT hardware products under the restricted label as part of attempts to ensure a trusted supply chain and reduce import dependence on China. Now, import permits will be issued in an online format and the process will require less than 10 minutes to complete. Importers will be allowed to apply for multiple authorizations and receive custom clearances.

Why it’s important: The latest development lays to rest apprehensions that India could be going back to the license raj. Major makers of computer hardware will be relived.

#3. High-frequency indicators show rise in economic momentum, says Reserve Bank

India’s high-frequency indicators are pointing to a broad-based increase in momentum although surging yields and rising crude oil prices have emerged as immediate risks to global growth, according to an article in Reserve Bank of India’s October bulletin. Deleveraging and higher capacity utilization have enabled capital-heavy industries to gain traction, the article said.

Why it’s important: The Reserve Bank’s monetary policy actions and continued disinflationary stance of withdrawing accommodation seem to be yielding results, but it is too early to declare victory.

#4. Consumer goods firms report robust urban sales growth in September quarter

India’s packaged consumer goods companies have reported robust urban growth in the September quarter, marked particularly by consumer preferences for premium products although demand in rural markets remained subdued. Earnings of Hindustan Unilever underscored the resilience of urban markets despite lingering effects of the pandemic. Similarly, Nestle India has reported double-digit growth. ITC has reported robust growth as well.

Why it’s important: In what would bring smiles to FMCG boardrooms, urban markets are showing a marked demand for premium products where margins are higher. Rural demand remains subdued though.

#5. Byju’s in initial talks with Bain and KKR to ssell controlling stake in Aakash

Byju Raveendran, CEO of Byju’s, has held exploratory talks with Bain Capital and KKR, among others, to discuss the sale of a controlling stake in Aakash Educational Services. Some private equity firms such as Carlyle are open to backing Aakash Chaudhry, former CEO and part of the family that founded Aakash, to buy back the company.

Why it’s important: The development marks an interesting twist to the proposed sale of Aakash by Byju’s to raise money to retire part of its debt. India’s most valuable unicorn seems to be juggling multiple balls to grapple with a repayment crisis.

#6. India’s agricultural output likely to grow by over 3 percent in 2023-24

Farm output is expected to grow by more than 3 percent in the current financial year despite initial concerns about the adverse impact of an erratic monsoon, government think tank NITI Aayog member Ramesh Chand has said. A 3 percent increase in farm output would mean a moderation from the 3.5 percent growth in gross value added in 2022-23 and the 4 percent growth seen in the year before.

Why it’s important: It is now certain that the uneven southwest monsoon and the El Nino weather pattern will scrimp India’s farm output. Food prices might soften a bit after the harvest comes in.

#7. Government must notify treaty benefits for overseas companies to avail lower tax

The Supreme Court has said the lower 5 percent withholding tax on dividend income of companies was not available to all Organization for Economic Co-operation and Development countries just on the most favored nation basis. A bench led by Justice Ravindra Bhatt held that international treaty practices are not enforceable in India unless the government notifies them.

Why it’s important: The ruling is likely to have wide ramifications for industry and could result in millions of dollars of additional tax revenue for the government.

#8. Adani Group set to refinance $3.5 billion debt taken to buy Ambuja-ACC

The Adani Group is set to sign a definitive agreement to refinance $3.5 billion in loans taken for 2022’s acquisition of ACC and Ambuja Cement. At least 18 global banks have agreed to join the consortium led by Barclays, Deutsche Bank and Standard Chartered to refinance the debt. As part of new terms, the promoter Adani family will prepay around $300 million.

Why it’s important: The debt had helped fund the biggest M&A in India’s cement industry. The latest agreement will be the largest refinancing exercise across Asia Pacific in the current financial year.

#9. SoftBank to slash stake in Zomato, plans full exits from food-delivery platform

SoftBank fund SVF Growth Singapore will sell at least 1.1 percent stake in food-delivery and restaurant-discovery firm Zomato for around Rs 1,020 crore this week, even as the Japanese venture capitalist plans a full exit from the food delivery business. Over the past one year, Zomato’s stock price has risen by 80 percent to Rs 111.65 from Rs 62.05.

Why it’s important: SoftBank’s decision to sell stake in Zomato follows the platform’s dramatic rise in market price over the past one year.

#10. Female participation in blue-collar jobs increasing across manufacturing sector

India’s current female blue-collar workforce participation is at 8 percent, or one in 12, a significant rise from less than 2 per cent a couple of decades ago, according to Deloitte’s Blue Collar Workforce Trends Report 2023. The life sciences, automotive, and engineering design are sectors that are leading in gender diversity ratio on account of their high degree of automation, skilled talent requirement and premium pay. The study covered 104 organizations and more than 300 factories.

Why it’s important: Women’s participation in India’s workforce has been worrying low for quite some time. Although it seems to be increasing in the manufacturing sector, a lot more ground needs to be covered.