India's bicycle market on a fast track amid pandemic

 Indians lanes are now dotted with cyclists. The industry was growing at 5-7 per cent every year but because of the coronavirus pandemic, it is now expected to grow at 15-20 per cent, led by a surge in first-time users.

Indian cycle industry is second largest in the world, followed by China. It is worth mentioning that 22 million units are made in the country every year and the annual turnover is Rs 7,000 crore.

According to industry numbers, 22 million cycles were sold in 2018-19 and 18 million were sold in in 2019-20. Not just adult professionals but kids, too, are increasingly taking up cycling as an activity. Since more people are taking up cycling as an activity, many have requested the government to make arrangements to make it a safer sport in India.

While the number of people taking up cycling as an activity is increasing, the trend of people going to work on cycles has not kicked off in urban India yet. It may be noted that the number of employees who ride bicycles to work in India are much lower in comparison to European countries.

Another challenge is that India’s growing cycle enthusiasts is the cost of good bicycles.

Good bicycles cost anywhere between Rs 40,000 and Rs 60,000 rupees — an amount most Indian households will think twice before spending. Many feel that the time is appropriate for Indian manufacturers to jump make good cycles available at cheaper rates.

It may be noted that a lot of bicycle components come from China and cyclist have urged Indian manufacturers to make these components in the country at cheaper costs. And if the costs for good bicycles reduce in future, cycling could become much more than a sport or activity in the country.

Government of India to develop an AVGC Centre for Excellence with IIT Bombay

The Government of India plans to develop an AVGC (Animation, Visual Effects, Gaming and Comic sector) Centre for Excellence along with the Industrial Design Centre of IIT Bombay. “The Centre will provide a place where different technologies, developments in the field of animation, gaming will be brought to one place. It will also train the thought leaders in the field of AVGC,” Amit Khare, secretary, Ministry of Information and Broadcasting said. The centre is likely to come off the ground in the next one-two years.

According to Khare, the M&E sector has a huge growth potential and is already currently growing at nine percent. Within the M&E sector, the AVGC sector is growing even faster at around 29% while audio visual sector and services is one of the champion sectors identified by the Government of India growing almost at the rate of 25%.

Khare also highlighted that the entire M&E industry, but for a few interventions from the Government, is totally a private-led initiative. And even while the Government is closely coordinating on developing the AVGC Centre for Excellence, the underlying policy of the Government is to act as a facilitator where it requires any intervention, not as a regulator. He further stated that there is a huge market for gaming globally and if the country can go by having ‘Make in India’ for the world, that is, it develops Indian stories for audiences across the globe, the sector will see a great success. 

Koppala to get India's first toy manufacturing cluster

 To boost the India’s toy manufacturing industry and be in line with Vocal for Local campaign, Karnataka Chief Minister B S Yediyurappa announced the proposed toy cluster in Koppala in Karnataka.

This will be the India's first toy manufacturing cluster and is expected to attract over Rs 5,000 crore in investments. The proposed toy cluster will have connectivity to NH-63 and Belagavi Airport. It will be a 400-acre SEZ with top-class infra and will generate 40,000 jobs in five years.

The Karnataka government is trying to enhance its outreach to global investors to set up units in the South Indian state; and to make this easier for industries to consider Karnataka for its investments it has also  amended the industrial, land and labour laws.

Karnataka is the third-largest market for toys in India (USD 159 million) 9.1 percent of the national market.

The state's toy industry has grown at a CAGR of 18 percent (2010-2017) and is expected to reach USD 310 million by 2023.

Railways likely to run 100 more trains soon

 

The Indian Railways is likely to announce the operation of nearly 100 inter-state and intra-state trains passenger trains very soon; the railway ministry is seeking go ahead from the home ministry.

These trains would be designated as special trains. Out of the 230 express trains being operated, 30 are of Rajdhani type trains.

The timing of these trains will remain unchanged when railways launch its zero-based timetables in next couple of months or in April With Unlock 4.0 announced and Metro Rail services starting from September, there is high probability of the workforce moving from one place to another.

Growth first time since March: India's August Manufacturing PMI at 52

 

India’s Manufacturing Purchasing Managers’ Index (PMI) for August has come in at 52, compared to 46 in July, signalling growth and rebound in production volumes for the first time in five months.

“The upturn was led by an improvement in customer demand as client businesses reopened, after lockdown restrictions eased amid the COVID-19 pandemic,” IHS Markit said. It added that output and new orders expanded at the fastest paces since February – recording a 21-month high.

The decline in foreign exports weighed slightly on overall new orders as firms cited subdued demand conditions from abroad. Despite easing from July - job shedding continues in August at a strong rate, extending the current sequence of decline to five months. The pace of contraction in workforce numbers softened from that seen in July but remained strong overall.

Higher levels of production supported a modest rise in the quantity of purchases during August, but firms told Markit that limited availability of goods, which onset a further reduction in stocks of purchases, has extended the current rate of depletion to five months.

Higher raw material costs due to supplier shortages and transportation delays stemming from the COVID-19 pandemic, resulted in rising input prices during August.

Cost burdens rose for the first time since March, with the rate of input price inflation at its highest since November 2018. Despite rising cost burdens, Indian manufacturers reported lower factory gate charges due to competitive pressures and efforts to boost sales.

However, the rate of decline eased to only a fractional pace that was the weakest in the current sequence of decrease.

Looking ahead, Indian manufacturers remained optimistic for the next 12 months. “Positive sentiment was often attributed to hope of the passing of COVID-19 pandemic, improving client demand, and new business wins. Nevertheless, market uncertainty and the onset of a global recession weighed slightly on the degree of confidence which was below the series average in August,” it notes.

India aims to achieve 100 MT coal gasification target by 2030: Pralhad Joshi

 

India aims for 100 million tonnes (MT) coal gasification by 2030 with investments worth over Rs. 4 lakh crores said Shri Pralhad Joshi, Union Minister of Coal and Mines. Addressing a webinar on Coal Gasification and Liquefaction, Shri Joshi said that Coal Gasification and Liquefaction is no more an aspiration, but a requirement. He added that for encouraging use of clean sources of fuel, government has provided for a concession of 20% on revenue share of coal used for gasification. He emphasized that this would boost production of synthetic natural gas, energy fuel, urea for fertilisers and production of other chemicals. The webinar was organised by Ministry of Coal (MoC) in New Delhi for discussing the road map for achieving the target. The webinar was attended by around 700 delegates from Government of India, CIL and the coal sector.

Reiterating on government’s commitments for green initiatives in the coal sector, Shri Joshi said that Coal Gasification and Liquefaction are well in the government’s agenda and various actions have been taken for development of Surface Coal Gasification in India. A Steering Committee has been constituted in this regard under the chairmanship of Dr. V.K. Saraswat, Member, NITI Aayog comprising of members from the Ministry of Coal. CIL has also planned to set up at least 3 gasification plants (besides Dankuni) on BOO basis through global tendering and has signed an MOU with GAIL for marketing synthetic natural gas.

Shri Joshi urged the attendees of the session to explore more about technologies & other aspects in Coal Gasification sector, in line with our country’s SWOT analysis. He added that this will help in harnessing nation’s reserves for maximum utilisation while heading on the path to sustainability, as per global standards.

Dr. V K Saraswat, Member NITI Aayog and Shri Anil Kumar Jain, Secretary, Coal also addressed the webinar.  Shri Binay Dayal, DT, CIL; Dr. P K Singh, Director, CIMFR; Shri Ashutosh Prasad, GM, PDIL; Shri Naveen Jindal, Chairman, JSPL; Shri Rajesh Jha, CEO, Mundra Synergy; Dr. V R Sharma, MD, JSPL; Dr. Dev Gavaskar, Partner, True North Ventures; Mr. Bob Carter, Group VP, Air Products also shared their views and valuable information.

Mumbai adds highest data centre capacity in January-June: Report

Mumbai has witnessed highest data centre capacity addition in the first half of 2020, as it continues to be the preferred choice for large cloud players. The city also accounts for 62% of India’s total cloud capacity, followed by Pune and Chennai, showed a JLL India report.

Mumbai continues to command premium for enterprise demand driven by its infrastructural benefits, followed by Hyderabad and Chennai. Further, the city is expected to witness the highest capacity addition of nearly 360 MW during 2020-2025, followed by Chennai with a capacity addition of 134 MW.

India’s data centre capacity is expected to grow from 375 MW in the first half of 2020 to 1,078 MW by 2025, presenting a $4.9 billion investment opportunity, JLL India said.

“India’s data centre market will outperform over the next five years, supported by a combination of growing digital economy, increased investor interest and stable long-term returns. Growth in the sector will be further powered by colocation sites which, via, lower upfront costs, heightened data security, uninterrupted services and scalability will, further, influence investors to re-imagine the potential of India’s data centre space,” said Karan Singh Sodi, Regional Managing Director – Mumbai, JLL India .

India’s data centre industry has provided a boost to the digital economy during the first half of 2020. Daily data consumption rose from an average of 270 petabytes (PB) during pre-lockdown period to an average of 308 PB post lockdown period registering a 14% rise.

The dependence of several industries on digital infrastructure has partially helped mitigate the impact of the lockdown as IT/ITeS, Banking and Financial Services, e-commerce, capital markets, social media and education remained operational.

“Mumbai is expected to see highest capacity addition as it continues to be the preferred choice for large cloud players because of its infrastructure advantage. Chennai is also proving to be an attractive destination due to its advantages of submarine cable landing stations and low development costs.” says Dr Samantak Das, Chief Economist and Head of Research & REIS, JLL India

Indian Railway Solarises more than 960 Stations

 Indian Railways has solarised more than 960 stations till date to achieve its objective of becoming 100% self-sustainable for all its power needs and to contribute to national solar power goals. Also, orders have been placed for 198 MW solar rooftop capacity for 550 stations which are under execution.

In order to achieve its objective of becoming 100% self-sustainable for all its power needs and to contribute to national solar power goals, Indian Railways has solarised more than 960 stations till date. Orders have been placed for 198 MW solar rooftop capacity for 550 stations which are under execution.

It may be noted that Indian Railways had recently organised a meet of leading solar power developers who had shared their expectations of being partners in the journey of Indian Railways to become “net zero carbon emitter” before 2030. Indian Railways is set to produce solar energy for meeting all its energy consumption needs of more than 33 billion units by 2030.Current annual requirement is about 20 billion units.

Indian Railways has a mega plan for installing solar plants of 20 GW capacity by utilizing its vacant land by 2030. Some of the Stations solarised are Varanasi, New Delhi, Old Delhi, Jaipur, Secunderabad, Kolkata, Guwahati, Hyderabad, Howrah etc.

About 51,000-hectare vacant land available with Indian Railways and is now ready to extend all support to the developers for installing solar power plants on Railway’s vacant un-encroached land.It may be noted that Railways is also set to achieve 100% electrification by the year 2023.

It may be noted that Indian Railways is committed to utilize solar energy for meeting its traction power requirement and become a complete ‘Green mode of transportation’. This is in line with the recent directive of Hon’ble Prime Minister to solarise railway stations and utilize vacant railway land for Renewable Energy (RE) projects.

The use of solar power will accelerate the Railways’ mission to achieve the goal of becoming ‘Net Zero Carbon Emission Railway’.In order to achieve this, Indian Railways has developed a mega plan for installing solar plants of 20 GW capacity by utilizing its vacant land by 2030.

In this regard, to begin with, bids for 3 GW solar projects on vacant Railway land parcels and land parcels along the railway track have already been invited by Railway Energy Management Company Ltd. (REMCL), a PSU of Indian Railways. These solar projects, besides supplying power to Railways at reduced tariff, will also protect the Railway land by construction of boundary wall along the track.

India's electronic exports can rise 16 fold to $180 billion by 2025

 

With global supply chain for electronic goods witnessing a restructuring as companies look to reduce dependence on China, India's domestic electronic goods industry is staring at a potential windfall. Estimates by Electronics and Computer Software Export Promotion Council (ESC) suggest electronics exports from India may potentially hit $180 billion by 2025 from just $11.28 billion in 2019-20.

The industry believes it needs proper long-term policy support from the government. ESC has submitted a charter to the government that proposes expanding the existing production linked incentive scheme beyond just mobile and smartphones to the entire electronic manufacturing sector.

"We have created a roadmap for taking India's electronics exports, which includes mobile phones and accessories, components and other electronics and hardware items to $180 billion by 2025 to bring exports from the segment more or less at par with software exports," says Mr. Sandeep Narula, Chairman, ESC

India's domestic production in the sector at $70 billion accounts for just 3.3 percent of the global electronics market estimated at $2.1 trillion giving it a significant headroom for growth. The domestic industry however suffers from disabilities like higher taxation, cost of finance and power which make it uncompetitive against China, Taiwan, Korea, Vietnam or Japan.

"The disadvantage works out to at least 8 to 10 percent, which is enough to price out Indian products from the global market. This would also make Indian products, particularly components, costlier for Indian electronic product manufacturers, forcing them to go for large scale imports," says Narula.

India is a significant importer of electronic goods components and a substantial portion of them comes from China. According to an analysis done by World Trade Centre Mumbai, India imported electronic goods worth Rs 3.59 lakh crore between April 2019 and February 2020 with China accounting for 40 percent of them. It accounts for a third of all imports from China and any reduction in this area will go a long way in reducing trade deficit with the dragon.

"There is a need for bringing down the minimum incremental investment under PLI from Rs 100 crore so that MSMEs across the spectrum can take advantage of the benefits under the scheme," Narula says. "The phased manufacturing program to promote local sourcing of components is more directed at mobile phone. It has helped in that segment, but it should be extended to all components manufactured in India. A measure of protection to the domestic component industry should be provided by increasing import duty on such products."

ESC has also asked for income tax incentives to be extended in the sector to help tide over the current crisis due to the pandemic. "It may take at least 2 to 3 years for the impact of the supply and demand disruptions caused by the COVID-19 to get bottomed out. Till that time at least the Income Tax incentives should be extended to exports and the domestic production should be treated as deemed exports," Narula added.

Indian Micro-businesses Remain Resilient Amidst COVID-19 Economic Impact: GoDaddy's 2020 Global Entrepreneurship Survey Finds

 

GoDaddy has released the 2020 Global Entrepreneurship Survey which finds micro-businesses in India are optimistic about the future of their very small business, amidst the COVID-19 pandemic. The overwhelming majority of Indian very small business owners surveyed (88 percent) believe that their business will grow in the next three to five years, with 43 percent responding they expect growth of at least 50 percent, and another 45 percent expecting to the growth of at least 25 percent

With more than 60 percent of the Indian very small business owners responding that despite the slowdown and negative impact brought on by the pandemic, they are confident that their business will continue (as compared to 52 percent globally). The survey further reveals strong values of resilience, self-reliance and zeal for digital skilling amongst Indian entrepreneurs – indicating a strong commitment to fight back in a post-COVID-19 new normal environment. Micro-businesses continue to remain positive despite setbacks.

 

The survey also studies the challenges micro-businesses are facing during the current pandemic. 83 percent of the Indian entrepreneurs surveyed reported a reduction in revenue and nearly half of them had to shut their business (45 percent) temporarily. Additionally, 45 percent had to make changes in the way they operated. Many small businesses in India are being impacted by low financial investment due to the COVID-19 environment, with more than 70 percent of respondents reported experiencing an overall decrease in investment. 48 percent of these small businesses said that maintaining cash flow was the most pressing need to keep their business running during this crisis period. Additionally, 37 percent say they started donating to charitable causes as compared to 17 percent globally.

 

The survey also highlights how digital technology has proven to be a key growth enabler during these tough times. As a result of the national lockdown due to COVID-19, 53 percent said they will focus on accelerating online/social selling capabilities.  Moreover, about one third of the respondents from India said that this year they might increase financial investment in digital education (35 percent) and cybersecurity & data privacy (32 percent). Thinking about the long-lasting implications on work post-COVID-19, 40 percent of the entrepreneurs in India are ready to modify their policies related to allowing remote work.

"It is encouraging to see the resilience and optimism of Indian micro-business owners during these challenging times…They may have had to shut down even if only temporarily, but they are adapting and working to rebound and help their small business grow," said Nikhil Arora, Vice President and Managing Director, GoDaddy India.