Commission nod to Heritage Foods’s acquisition of Reliance Retail’s dairy business

Apr 10, 2017 0

New Delhi– The Competition Commission of India (CCI) on Monday said that it has approved the acquisition of Reliance Retail’s dairy business by Heritage Foods, owned by Andhra Chief Minister N. Chandrababu Naidu.

In a tweet, the CCI said: “CCI_India approves acquisition of dairy business of Reliance Retail by Heritage Foods.”

Last year, Heritage Foods executed a binding agreement to acquire the dairy business of Reliance Retail through slump sale.

The dairy business of Reliance Retail operates pan-India dairy procurement, processing and distribution platform under two brands — ‘Dairy Life’ and ‘Dairy Pure’.

The Heritage Group, founded by Naidu in 1992, has six business divisions — dairy, retail, agri, bakery, renewable energy and vetCa – under its flagship company Heritage Foods.

The annual turnover of Heritage Foods crossed Rs 2,380.58 crore in 2015-16.

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More Chinese firms investing in India, but political, cultural barriers remain

Apr 10, 2017 0

By Reshma Patil

China has emerged as one of the fastest-growing sources of Foreign Direct Investment (FDI) into India — it was 17th largest in 2016, up from the 28th rank in 2014 and 35th in 2011.

In 2011, the total Chinese investment in India was $102 million. Last year, a record $1 billion of Chinese FDI reportedly flowed in, but official Indian and Chinese statistics differ on cumulative figures. The Department of Industrial Policy and Promotion (DIPP) last year estimated that total FDI from China between April 2000 and December 2016 was $1.6 billion. Indian industry analysts and media reports have estimated the figure to be over $2 billion.

“Actual Chinese investment in India is at least three times higher than the official Indian figure,” Santosh Pai, partner at Gurgaon-based Link Legal India Law Services, which provides legal services to members of the China Council for the Promotion of International Trade, told IndiaSpend.

Indian statistics capture direct investments from mainland China, but a majority of Chinese overseas direct investment, Pai noted, flows through tax havens such as Hong Kong. Last year, Chinese Vice-minister for Finance Shi Yaobin was quoted saying China has cumulatively invested $4.07 billion in India, and India has invested $650 million in China.

“China will be one of India’s top 10 investors shortly,” Pai said. He recalled his experience of building a clientele in Beijing in 2010. The Indian firm he worked for had no clients in China. He would drive up and down Beijing’s best-known road, Changan, noting down companies’ names on buildings along the way. Later, he would track down those companies online and approach them for business. In six years, his firm’s Chinese clientele grew from zero to 120 companies (the firm has since merged with the one he works with now).

Six years ago, investors from the world’s second-largest economy were hard to find in India. Today, India’s largest digital payments company Paytm is 40 per cent-owned by Chinese e-commerce firm Alibaba and its affiliates, and Alibaba is reportedly raising its stake to 62 per cent. China’s fourth-largest mobile phone company Xiaomi assembles one phone every second at a new factory in India.

Sixty percent of Chinese FDI is concentrated in the automobile industry. Several companies’ regional offices are located in Ahmedabad, although Chinese companies are gradually moving away from an initial preference for Gujarat towards Maharashtra, Andhra Pradesh, Tamil Nadu and Haryana. Seven smartphone companies from China have launched, or plan to launch, factories in India, according to a February 2017 Chinese media report, Rise and Coexist.

Nonetheless, Chinese investment flows into India remain relatively low, both in terms of total FDI flows into India and Chinese outward investment globally. China’s share of total FDI in India is only 0.5 per cent, despite its being the second-largest economy in the world and India’s largest trading partner, according to DIPP.

This pales in comparison with fellow Asian powerhouse Japan (7.7 per cent). Meanwhile, the US, which China recently replaced as the world’s largest economy in purchasing power parity terms, has a 6.13 per cent share in total FDI in India.

While China’s FDI flow into India last year showed a relatively significant rise, the figure was negligible when viewed against China’s outbound investment of over a trillion yuan or $170 billion across 164 nations last year — including $45.6 billion in the US alone.

Chinese FDI in India has increased even as India and China have picked new points of political disagreement in the last two years. India objects to China’s $46 billion investment in the China-Pakistan economic corridor that passes through parts of Pakistan-occupied Kashmir. Last year, Beijing obstructed India’s efforts to get membership of the Nuclear Suppliers Group, and China has repeatedly blocked a proposal at the United Nations to blacklist Jaish-e-Mohammed chief Masood Azhar, implicated in terror strikes in India including the 2016 Pathankot attack.

“There is no drop in the activity of Chinese companies evaluating India because of political relations between the two countries,” Sridhar Venkiteswaran, CEO of Avalon Consulting in Delhi, told IndiaSpend. “Increasingly, the Indian political establishment too does not want to place any roadblocks on Chinese investment into India… but Indian companies tend to push back when there is negative news about the Sino-Indian relationship.”

Chinese commentary on India today reflects this combination of geopolitical rivalry and enhanced commercial interest. China’s government-backed newspaper Global Times published a record-setting 80 opinion pieces on India in 2016, and its coverage of India is on the rise. The articles are a mix of political warnings against antagonising China and business reports evaluating investment in India. Though New Delhi has refused to endorse China’s One Belt, One Road initiative to build infrastructure to link Asia with Europe and Africa, sections of the Chinese media have projected an upcoming industrial park in India’s Gujarat as part of the same Chinese initiative.

Faced with double-digit increases in labour costs, an ageing workforce and a record slowdown in economic growth, Chinese companies have been searching for alternative manufacturing destinations and new markets since the economic downturn of 2008.

India is a “hot investment opportunity”, Li Bojun, a counsellor at the Chinese embassy was quoted saying in the People’s Daily in February 2017. Chinese companies are showing more confidence in the Indian economy as it grows faster than their own and narrows the gap in competitiveness between the two Asian giants. India ranked 39th compared with China at 28th in the World Economic Forum’s Global Competitiveness Report on 138 nations in 2016-17, raising its rank by 16 positions from the 55th in 2015-16.

“The fact that the Indian economy is now the fastest-growing has had a positive signalling effect in China,” Pai said.

A 2015-16 joint report by Indian industry association Confederation of Indian Industry (CII) and Avalon Consulting estimated that labour costs for manufacturing personnel are 1.5 to 3 times higher in China than in India. The report noted that China is “losing competitiveness” to India in several light engineering-related industries, which is attracting Chinese investors to India.

“The relative competitiveness of India compared to China is increasing, especially for Chinese companies to shift production from China to India in the automotive, chemical and electronics value added chain,” Venkiteswaran said. For example, he said, imports from China have been 35 per cent costlier since 2013, and the cost of labour in China is increasing by 18-19 per cent since 2014, compared with 8-10 per cent in India.

Chinese businesses have noticed. One of the most-shared articles in March on the Global Times website warned: “China should pay more attention to India’s increasing manufacturing competitiveness”.

However, it is far from smooth sailing for Sino-Indian investment. India’s attempts to gain market access in China for its information technology, agricultural and pharmaceutical industries have hit a wall for over a decade. India’s deficit in trade with China bloated to $46.56 billion last year. Bilateral trade remains below the target of $100 billion that both sides were aiming to achieve in 2015. At $70.08 billion in 2016, bilateral trade was 2.2 per cent lower than the $71.63 billion in 2015. The CII-Avalon study forecasts that the trade deficit will hit $60 billion by 2018-19.

In 2014, Chinese president Xi Jinping committed to a $20 billion investment in India over five years. If fulfilled, this would increase China’s economic footprint in India. But it would still be a small percentage of Xi’s more recent promise that China will invest $750 billion overseas in five years. (IANS)

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Real Estate Regulatory Authority may revive real estate sector in second half, say experts

Apr 10, 2017 0

By Meghna Mittal

New Delhi–After May 1, when the Real Estate Regulatory Authority (RERA) is in place, the realty sector will likely see an uptrend with slight price correction, say industry players and stakeholders.

This is likely as genuine buyers may pitch in on the back of an improved consumer climate and lower home loan rates.

“Considering the present scenario, the next three-four months are like the gestation period for the realty sector and after six months the sector is likely to gain momentum. We are hoping to see positive impact in the second half of 2017 itself after RERA comes into full effect,” real estate advisory firm PropUrban Founder and CEO Mir Jaffer Ali told IANS.

According to the Real Estate (Regulation and Development) Act, 2016, which came into effect on May 1 last year, every state is supposed to have a RERA in a year’s time.

It will thereon become mandatory for all real estate projects, commercial and residential, to register with RERA for transparent execution.

Anshul Jain

“At a time when the setting up of a Real Estate Regulatory Authority in each state is set to bring in increased accountability in the markets, we can expect to witness some amount of correction in real estate prices in markets,” property consultant Cushman & Wakefield Managing Director (India) Anshul Jain told IANS.

Ali concurred and said that the cash component in property transactions will see a significant drop, resulting in a fall in land prices, which could be anywhere between 15 and 20 per cent at some places.

On a positive note, almost all banks have also lowered the home loan interest rates post demonetisation which would automatically generate more demand for housing with the sops given to affordable housing in this year’s Union Budget being an added advantage.

The start of 2017 has seen buyer sentiment improve and the anticipation is that with a positive electoral result and encouraging budgetary reforms, the sector should perform better over the course of the year.

Large developers such as the Lodha Group have seen sales of 850 units in February 2017, which indicates a gradual upward trend in consumer sentiment across the segment.

More so, with the dust of demonetisation finally settling, buyers’ sentiments are looking positive in anticipation of higher transparency and efficiency. Genuine requirement for homes coupled with reduced interest on home loans can be attributed to this.

According to a survey by PropUrban, once RERA is fully in place, about 45 per cent respondents would be investing within the next six months, while another 26 per cent are likely to take the plunge within a year.

“Interestingly, now the market will see the return of ‘real buyers’. As for the RERA and Benami Amendment Act, the sector is likely to see positive impact in the short-term — within one-two years,” Ali said.

Moreover, with the deadline of implementing RERA fast approaching, developers are trying to focus on completing their existing projects rather than launching new ones, which is good for the sector and buyers, he added.

With RERA, there would be mandatory disclosure of project details, including those of the promoter, project, land status and clearances. This would increase the credibility of developers and would protect consumer rights as well.

Dharmesh Jain, President, Confederation of Real Estate Developers’ Associations of India — Maharashtra Chamber of Housing Industry (CREDAI-MCHI), told IANS that RERA “will help in bringing in higher transparency and will help the customer to get possession in time. Also, one will know what they are paying for and would be sure they will get what they are promised. In fact, the developers will have to be accountable on the dates and timelines shared”.

Additionally, buyers and developers will now finally be on a level playing field with respect to penalties on delays. Both parties will now pay the same rate of interest in case the buyer delays payment or the developer delays giving possession.

“RERA is a long-term policy measure whose effect will be pretty permanent, in the sense that it will drive unscrupulous or unorganised developers off the market and leave a level playing field for credible players in its wake,” Ramesh Nair, CEO and Country Head of leading property consultant JLL India, told IANS.

“We are now seeing evidence of a gradual revival on the back of pro-consumer measures like RERA coming in, decisive court actions against errant developers, price corrections and renewed confidence in the economy,” he said.

Shubika Bilkha, Business Head, Real Estate Management Institute (REMI), told IANS, “These initiatives will contribute to organising this sector that has been traditionally fragmented and unorganised, while improving consumer confidence.” (IANS)

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Business confidence index in India hits record high in last quarter

Apr 9, 2017 0

New Delhi– Indian companies are upbeat about prospects for economic activity in the new fiscal, industry lobby CII said on Sunday on the basis of its survey, although majority of the firms surveyed cited low domestic demand, fragile global economic recovery and rise in commodity prices as key concerns.

“The CII Business Confidence (BCI) which has gone up to an all-time high of 64.1 during the fourth quarter of 2016-17, as against 56.5 recorded in the previous quarter,” the Confederation of Indian Industry said in a statement here.

“There has been a sharp rise in the CII-BCI after it remained subdued in the last few quarters,” it said.

“A sharp uptick in business outlook, at the onset of 2017, underpins the hope that the reform initiatives of the government would unravel a host of investment opportunities for firms, going forward,” it added.

The CII’s quarterly Business Outlook Survey is based on around 200 responses from large, medium, small and micro firms, covering all regions of the country.

“Business conditions are expected to improve as over 63 per cent of the firms expect an increase in sales during January-March 2017, as compared to only 39 per cent who experienced the same in October-December 2016,” CII said.

“Moreover, 60 per cent of the respondents expect an increase in new orders during January- March 2017, as compared to 41 per cent who witnessed the same in the preceding quarter,” it added.

However, on the question of their concerns, a majority of the companies listed low domestic demand followed by fragile global economic recovery and rise in commodity prices as the key issues.

Majority of the firms also expect no change in their domestic and international investment plans during the last quarter of the previous fiscal ended March 31.

More than half of the firms expect to maintain status quo on their plans about investing in the domestic economy during the quarter.

“Firms are keeping investment plans on hold despite the expectation of an improvement in sales and new orders in the January-March quarter owing to the existing excess capacity in the economy,” the statement said.

Meanwhile, a key macro-economic data released earlier this week showed India’s manufacturing sector expanded last month due to healthy demand conditions and softer inflationary pressure.

The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) which is a composite indicator of manufacturing performance rose to a five-month high of 52.5 in March, from 50.7 reported for February.

An index reading of above 50 indicates an overall increase in economic activity, and below 50 an overall decrease. (IANS)

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President urges people to help make India cashless society

Apr 9, 2017 0

New Delhi–President Pranab Mukherjee on Sunday urged the people to support the government’s mission to make India a cashless society.

“I urge all citizens to extend their unstinted support to the mission of a less cash India. All efforts of the government will achieve their end only if people were to adopt them proactively,” the President said.

Mukherjee was speaking on the occasion of the 100th mega draw of lots for Lucky Grahak Yojana and Digi Dhan Vyapar Yojana at Rashtrapati Bhavan here.

President Pranab Mukherjee

“India has a long way to go to become a cashless society. Presently, we remain primarily a cash-based economy with about 95 per cent of the personal consumption and 86 per cent of all transactions being in cash,” President Mukherjee said.

Appreciating the government initiatives, he said: “It is necessary to reduce cash in circulation and impart greater urgency to promoting secure digital payment methods to ensure greater transparency.”

Calling the Aadhaar card a watershed event in the development story of India, President Mukherjee said: “Aadhaar enabled payment system has made digital payments possible for even those section of the population who may not have mobile phones.”

“Launch of BHIM has demystified the digital payments and brought it within the grasp of every citizen,” he said while discussing the new modes of digital payments which are being developed for making payments easier.

He complimented the government for the initiatives, for promoting the culture of digital payment in the country.

The government launched the Lucky Grahak Yojana for consumers and Digi Dhan Vyapar Yojana for merchants on December 25, 2016, in order to promote and encourage digital transactions. These schemes are being implemented by the National Payment Corporation of India (NPCI).

The Lucky Grahak Yojana rewards Rs 1,000 daily to 15,000 customers undertaking digital transactions. Weekly prizes up to Rs 1 lakh for consumers and Rs 50,000 for merchants are given. As on March 30, 2017, 13.5 lakh consumers and 79,519 merchants have received prizes under these schemes.(IANS)

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Q4 results, macro-data to guide equity markets’ movements

Apr 9, 2017 0

By Rohit Vaid

Mumbai–Upcoming fourth quarter earning results, along with macro-economic data points and global geo-political tensions are expected to determine the trajectory of Indian equities markets during the week starting April 10.

“Markets next week would focus on the upcoming earnings season,” Devendra Nevgi, Chief Executive of Zyfin Advisors, told IANS.

“Since markets have moved up in recent weeks driven by FPI (foreign portfolio investors) flows and PE (price-to-earning) ratio expansion, the earnings growth support is needed for the markets to sustain the uptrend.”

IT major Infosys is expected to be the first blue chip firm to come out with its Q4 results on April 13.

Apart from the Q4 results, investors will also be looking forward to the upcoming macro-economic data points such the Index of Industrial Production (IIP) figures.

India’s Central Statistics Office (CSO) will release the macro-economic data points — IIP and Consumer Price Index (CPI) — during the upcoming week.

The CPI data will be followed by the release of Wholesale Price Index (WPI) by the Ministry of Commerce and Industry.

“Investors will closely follow the domestic economic data like CPI and IIP, while price movement of Indian rupee against USD will be the crucial factor for market sentiments next week,” pointed out Dhruv Desai, Director and Chief Operating Officer of Tradebulls.

Last week, the Indian rupee appreciated by 56 paise to 64.29 against a US dollar from last week’s close of 64.85 to a greenback.

It is expected that the continuing appreciation in Indian rupee will hurt India’s export competitiveness and USD earnings of corporates in the IT sector.

Besides, investors would be cautious about crude oil price movement, especially after the US’ cruise missile attack against the Bashar Hafez al-Assad’s regime in Syria.

“Markets may review the developments in Syria and then it may start focusing on the March quarter earnings,” said Deepak Jasani, Head – Retail Research, HDFC Securities.

On technical levels, the NSE Nifty is expected to hold above the intermediate support level of 9,019 points.

“Technically, with the markets remaining in uptrend, traders will need to watch if the Nifty can now hold above the intermediate supports of 9,019 points for the uptrend to continue,” Jasani explained.

In addition, the recently released US non-farm payroll employment data might provide some support to the key indices.

Last Friday, the US Bureau of Labour Statistics reported that total non-farm payroll employment increased by just 98,000 in March , while the unemployment rate declined to 4.5 per cent.

The data assumes significance as it acts like a gauge for the likelihood of a rate hike by the US Federal Reserve.

A rate hike can potentially lead FPIs away from emerging markets such as India, and also dent business margins — as access to capital from the US becomes expensive.

The provisional figures from stock exchanges for last week showed an inflow of foreign funds worth Rs 754.89 crore during the week, while domestic institutional investors (DIIs) bought scrips worth Rs 48.54 crore.

Figures from the National Securities Depository (NSDL) disclosed that FPIs bought equities worth Rs 4,995.46 crore, or $769.96 million, during April 3-7.

Last week, the Indian equities markets inched up on the back of healthy inflow of foreign funds and a strong rupee.

However, gains were capped due to global geo-political tensions and the Reserve Bank of India’s status quo on interest rates in its first bi-monthly monetary policy review of fiscal 2017-18.

Consequently, the trade week saw the barometer 30-scrip Sensitive Index (Sensex) of the BSE gain a mere 86.11 points or 0.20 per cent to close at 29,706.61 points, while the wider 51-scrip NSE Nifty closed at 9,198.30 points — up 24.55 points or 0.27 per cent.

The domestic markets will remain closed on Friday, April 14, on account of Dr. Baba Saheb Ambedkar Jayanti and Good Friday. (IANS)

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IndiGo operates 900 flights a day, sets industry record

Apr 8, 2017 0

New Delhi–Budget passenger carrier IndiGo on Saturday said that it flew 900 flights on April 7, 2017, setting the record for operating the highest number of flights ever by an Indian airline in the history of Indian civil aviation sector.

“We at IndiGo are thrilled on having flown 900 daily flights for the first time yesterday. Now the team is excited to reach the 1000 flight milestone,” said Aditya Ghosh, President and Whole-Time Director, IndiGo.

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India, ADB sign $175 million loan agreement for solar power transmission system

Apr 7, 2017 0

New Delhi– India and the Asian Development Bank (ADB) have signed a loan agreement to improve the country’s solar power transmission system.

“India and ADB have on Thursday signed a $175 million loan agreement to support construction of high voltage transmission systems to evacuate power generated from new mega solar parks to the interstate grid, and improve reliability of the national grid system,” the Finance Ministry said on Friday.

Speaking on the occasion, Raj Kumar, Joint Secretary in the Finance Ministry, said that by supporting the construction of interstate transmission systems for the mega solar power projects, the project will enable transmission of surplus solar energy from states with surplus power to power-deficit states.

“The loan will be given to the Power Grid Corporation of India Limited (POWERGRID) and will include sub-projects in various locations in India. As an innovative feature, the project is designed to adopt the country systems on both safeguards and procurement at the agency level,” the statement said.

This will be ADB’s first breakthrough of the country system’s application to a specific project.

After signing the loan agreement, Kenichi Yokoyama, Country Director of ADB for India, said the project will support the continued expansion of solar energy in India in line with the government’s objectives and contribute to climate change by increasing the share of clean energy in the power mix besides increasing overall efficiency of the power system.

He said the adoption of POWERGRID’s safeguard and procurement systems would improve its operational flexibility and autonomy, and reduce the transaction costs and time for project preparation and implementation.

As laid-out in the ADB Safeguards Policy, country safeguard systems constitute a country’s legal and institutional framework on environment and social safeguards.

In addition to the ADB loan of $175 million, the project includes $50 million co-finance from the Clean Technology Fund (CTF) — a $5.8 billion component of the Climate Investment Funds aimed at providing developing countries resources to expand efforts in utilising low carbon technologies and transitioning to clean, renewable energy sources.

POWERGRID would make an equity contribution of $135 million equivalent to support the total project cost of $450 million.

The $175 million loan will be from ADB’s ordinary capital resources (OCR) and will have a 20-year term, an annual interest rate determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility.

“The project will improve the capacity and efficiency of interstate transmission networks, particularly in transmitting the electricity generated from the new solar parks to the national grid,” it said.

Apart from the evacuation of 2,500 MW of power from solar parks in Bhadla, Rajasthan, and 700 MW from Banaskantha, Gujarat, POWERGRID is also including two additional sub-projects that will increase solar power generation by 4.2 gigawatt and lessen carbon emissions by over 7 million tonnes every year.(IANS)

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Tata Motors bags order for 500 buses from Ivory Coast

Apr 6, 2017 0

New Delhi– Tata Motors on Thursday said it has bagged an order for 500 next-generation low-floor urban city buses from the Ivory Coast.

According to the company, as part of the order, it has delivered 117 buses to the SOTRA – Abidjan transport company.

“Built on Tata Motors next-generation HCV (heavy commercial vehicle) bus platform, the Tata LPO 1924 RESLF Abidjan’s next-generation bus has been developed with inputs from SOTRA, with a high degree of customisation based on feedback gathered through city trials, over the last couple of months,” the company said in a statement.

The auto major said the buses were financed under the EXIM Bank of India for operation by the SOTRA – Abidjan Transport Company.

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Assocham seeks lower rental on PoS machines

Apr 6, 2017 0

Bengaluru–Business chamber Assocham on Thursday sought Rs 100 cap on monthly rental of Point of Sales (PoS) machines to encourage more merchants to install them.

“Rental on PoS machines should be capped at Rs 100 per month as against Rs 800 levied by the banks, which also charge between Rs 10,000-Rs 15,000 for installing each machine. Merchants are reluctant to install the machines due to their prohibitive cost,” Associated Chambers of Commerce and Industry of India (Assocham) Secretary-General D.S. Rawat told reporters here.

Assocham also wants private banks to stop levying 2 per cent transaction fee as service charge on debit-card holders for payments using PoS machines.

“It will be difficult for debit-card holders to use PoS machines for payments if banks also collect 2 per cent of the transactional value as service charge,” said Rawat after releasing a joint study report on ‘Indian Point of Sale Market’ by Assocham and research firm RNCOS.

The study has projected the number of PoS machines to jump nearly five-fold to 76 lakh by 2022 from 16 lakh in 2016, at 30 percent compounded annual growth rate, and held a huge potential growth for PoS machines as the country has a whopping 740 million debit and credit cards.

“The transaction value through PoS machines will touch Rs 7.5 lakh crore by 2022 from Rs 63,500 crore in 2016,.

“The transaction volume of PoS is likely to grow 10-fold to Rs 310 crore by 2022 from Rs 30 crore in 2016, projecting 48 per cent CAGR,” said Rawat citing the report.

Increased penetration of debit and credit cards, growing e-commerce and increasing disposable incomes provide an opportunity for the growth of PoS machines, thanks to the government’s thrust on promoting cashless economy.

Besides the retail industry, sectors like healthcare, hospitality, food and beverage are major contributors to growing revenue of PoS market.

The study, however, noted that issues pertaining to privacy, security, trust and lack of full integration of telecom infrastructure need to be sorted out.

“Though private banks accounted for 58 per cent of PoS machines by 2016, the trend is likely to reveres, as enterprises are shifting towards state-run banks due to benefits like import duty exemption and reduction or waiving off merchant discount rate (MDR) by the government and the Reserve Bank of India, ease of operation, lower installation and monthly charges,” added the report. (IANS)

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