Reforms have touched all sectors, India to become $5 trillion economy: Modi

Jan 23, 2018 0

Davos– Hardselling the country to global investors, Prime Minister Narendra Modi on Tuesday said India’s reforms have touched almost all sectors and the country is set to become a $5 trillion economy by 2025, riding on its vast market and strong and stable fundamentals.

“Our present development agenda is based on five pillars. First and foremost, we do understand that our systems need to change. Hence, we are persisting with far reaching structural reforms. Thus, our first pillar is our mantra of reform, perform and transform,” Modi said while addressing the plenary session of the World Economic Forum.

He said: “India is an investment in future,” also adding that: “Indians accepted in one voice and moved towards a less cash society and a unified tax system in the form of GST.”

Saying reforms have touched almost all sectors, Modi said: “This specially includes: formalising the informal economy through demonetisation and digital transactions, direct tax reforms and expansion of the tax base, banking reforms, DBT (direct benefit transfer) through UID (Unique Identification) and bank accounts, minimising discretion, combating corruption and controlling inflation. Also, we have consistently reduced fiscal deficit and current account deficit.”

He pointed out that over the last three years, the Indian government has resolved a number of regulatory and policy issues facing businesses, investors and companies.”

“In this direction, we have also undertaken bold FDI (foreign direct investment) reforms. More than 90 per cent of the FDI approvals have been put on the automatic approval route. As a result of these changes, there has been a sharp rise in FDI in the past three years — from $36 billion in 2013-14 to $60 billion in 2016-17.”

Modi said the country is using technology to transform governance and deliver public entitlements and services. “I have been saying that e-governance is easy and effective governance.”

“Our government agencies are finding innovative ways to create a business friendly environment. We have now developed the digestive capacity for various technologies. Our young people have already distinguished themselves in the realm of technology, innovation and entrepreneurship.”

About infrastructure development in the country, he said: “Our objective is to reduce the logistics cost transaction time for various activities. Also, improvement in infrastructure have already enthused people as they are beginning to see a qualitative change in their lives.”

He said India needs to be fully integrated with the world in major policy areas. “May be it is the regime of entry and exit of businesses, for IPRs (intellectual property rights), or arbitration and commercial adjudication, we have moved very decisively to brush up the framework to bring them in line with global best practices.”

Regarding inclusive economic development, he added: “As I said, the biggest reason for fracture within the countries is inequality and disparity leading to divide and distrust. Personally, I have always said that development process should be inclusive and encompassing. We have tried in our own way to bridge the income and opportunity divide.” (IANS)

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Is the stock market overvalued?

Jan 23, 2018 0

By Amit Kapoor

Last week, Uday Kotak of Kotak Mahindra Bank had a warning about the stock markets entering a possible bubble. According to him, Indians are investing massive amounts of savings into “a few hundred stocks” of firms whose governance standards are questionable. The Bombay Stock Exchange (BSE) Sensex rose almost 28 percent in 2017 and the rally has continued in the new year. It is trading at prices that are over 26 times their underlying average earning per share. Even Uday Kotaks warning was not enough to break the general market trend (although mid-caps did face a correction soon after the red flag was raised, but other sectors more than compensated for it).

To put things in perspective, it must be pointed out that Reserve Bank of India (RBI) data shows that the pattern of household savings has drastically changed over the last year. In the decade-and-a-half between 2000-01 and 2015-16, household investment in shares averaged around Rs 226 billion and peaked at Rs 743 billion just before the crisis in 2007-08. However, in 2016-17, it jumped to a historical high of Rs 1,825 billion.

Demonetisation can be said to be the immediate trigger. Since holding cash is now seen as a risk, households have been looking at new avenues of parking their money. Even bank deposits have witnessed an abrupt jump over the last financial year. After gradually rising from Rs 1,000 billion to Rs 6,220 billion between 2000-01 and 2015-16, bank deposits almost reached Rs 11,000 billion in 2016-17.

So, the bottom line is that the average Indian saver is getting more and more invested into the stock market and so any significant downturns will have far-reaching implications. Therefore, Uday Kotak’s warnings need serious consideration and even more so because there are multiple global factors that can put an end to the bull markets.

First, the global economy began witnessing its first signs of recovery last year after the 2008 financial crisis. As a response to the crisis, central banks all over the world had began a policy of quantitative easing that pumped excess liquidity into global markets. The gains from this policy are debatable but the money found its way into financial assets and bloated their prices. Therefore, despite a lack of positive economic news and unexpected political changes throughout the world, equity markets continued to show an upward trend.

However, as economies continue to show signs of revival the quantitative easing policies will slowly come to an end and excess liquidity will be rolled back by central banks. The US Federal Reserve is already doing so, and other major economies will soon follow suit. This money will be withdrawn from the global equity markets which will, therefore, face an inevitable correction.

Second, the flip side of a change in liquidity is the interest rate level. In pursuit of the policy of quantitative easing, central banks in the advanced economies have reduced interest rates to rock bottom levels with Japan even going into sub-zero levels. However, as the liquidity taps are closed, interest rates will be raised to pre-crisis levels. If there are no recessionary signals this year, the US might raise interest rates three times to about 2 percent. This will be another strong reason for money to flow out of global equity markets into the safer havens of US bonds. Such trends will not be good news for investors in the Indian stock market.

Third, there are fears that the American dollar might become weak as China has indicated an inclination towards curtailing its purchases of US government bonds. Since China is the single-biggest foreign holder of US debt, a slowdown in its purchases would imply higher bond yields and a weaker dollar. This would result in a flight of capital to safety out of world markets, including that of India.

Finally, crude oil prices are expected to be high this year with the unrest in the Middle East. Prices are already above $60 a barrel and will continue its upward trend as the oil cartel tightens the market supply and US output of shale oil slows. Since oil prices are the leading drivers of inflation in the world, and especially in India, interest rates will also have to be raised commensurately. These two factors — inflation and rising interest rates — are highly inimical to company earnings and, hence, will have a significant negative impact on the markets.

There are numerous global factors that are poised to bring an end to the bull run in the stock markets and considering the fact that, historically, high levels of household savings have been invested in it, a forewarning is due so that investors are not caught unawares and overexposed. It is better to form bear market plans now when investors have ample time and a clear head. (IANS)

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India to regain rank as fastest growing economy at 7.4% in 2018-19: IMF

Jan 22, 2018 0

By Arul Louis 

United Nations– The International Monetary Fund (IMF) on Monday reaffirmed that India’s economy is projected to grow by 7.4 percent in the next fiscal year, regaining the rank of the world’s fastest-growing large economy as China slows down.

Like India’s improving economic performance, the global economy was also on the uptick, estimated to have grown by 3.7 percent last year and forecast to grow this year and the next by 3.9 percent, according to the Fund’s World Economic Outlook Update.

Christine Lagarde

At the release of the Update in Davos, IMF head Christine Lagarde said that for the world economy, “all signs point to a further strengthening both this year and next,” but cautioned that “complacency would be a mistake.”

“We should certainly appreciate this season of broad-based growth momentum,” she said. “But we should also use this time to find lasting solutions to the challenges facing the global economy in 2018.”

The Update gave a rosier estimate for the current year than the Indian government’s. It estimated the Indian gross domestic product (GDP) growth at 6.7 percent in 2017-18, compared to the 6.5 percent figure given by the Ministry of Statistics and Programme Implementation.

Saying it expected a “pick up in India,” the Update stood by all the projections it made last October. It projected a growth of 7.8 percent in 2019-20.

China, which is 2017’s growth champion with a growth rate of 6.8 percent, is expected to slow down to 6.6 percent in this year and 6.4 percent next year, according to the Update.

IMF Research Director Maurice Obstfeld warned that while the current “momentum will carry through into the near term”, without reforms “the next downturn will come sooner and be harder to fight”.

“Political leaders and policymakers must stay mindful that the present economic momentum reflects a confluence of factors that is unlikely to last for long,” he told reporters in Davos.

Although the world seems to have come out of the global financial crisis, “without prompt action to address structural growth impediments, enhance the inclusiveness of growth, and build policy buffers and resilience,” another may be round the corner.

“Global economic activity continues to firm up,” the Update said, raising last year’s estimate by 0.1 percent from the October Outlook report to 3.7 percent, and 0.5 percent higher than the growth rate in 2016.

For next year and 2019, the Update revised global growth projections upward by 0.2 percent to 3.9 percent.

It said the growth pickup “has been broad based, with notable upside surprises in Europe and Asia”.

Obstfeld said that the recent tax reforms in the US will contribute noticeably to its growth over the next few years with a positive effect on its trade partners “largely because of the temporary exceptional investment incentives that it offers”.

But it will be short-lived and “will also likely widen the US current account deficit, strengthen the dollar, and affect international investment flows”, he added.

The Update estimated US growth at 2.3 percent for last year and forecast a growth rate of 2.7 percent this year and 2.5 percent next year.

An important feature of the tax reforms is the reduction in the corporate tax rate from 35 percent to 21 percent, which gives US companies an incentive to bring back their holdings stashed away abroad. (IANS)

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India to work closely with Asean for early conclusion of RCEP: Prabhu

Jan 22, 2018 0

New Delhi– Commerce and Industry Minister Suresh Prabhu on Monday said that India will “be working closely” with other countries, particularly from the Asean region for an early conclusion of the Regional Comprehensive Economic Partnership (RCEP).

“… It is important to address the sensitivities of member countries and their aspirations as negotiations gather momentum. We would all aim to achieve a RCEP that results in the realisation of the potential of the three key pillars of RCEP — goods, services and investments and in a manner that is balanced and collectivist satisfying.

Suresh Prabhu

“Keeping this in view, India will be working closely and constructively with all RCEP member countries and particularly Asean towards an early conclusion of negotiations,” he said on the sidelines of the “Asean-India Business and Investment Meet and Expo” being held here.

The mega free trade agreement — RCEP — is currently being negotiated between Asean member states — Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam — and Australia, China, India, Japan, South Korea and New Zealand.

The RCEP negotiation includes trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, dispute settlement, e-commerce, small and medium enterprises (SMEs) and other issues.

“We believe RCEP is a logical extension of India’s Act East Policy and believe that deeper interaction with RCEP will bring in greater prosperity…,” said Prabhu, adding that the RCEP negotiations are “slow” but only because of the diversity of economic strengthens of the member countries.

The first phase of negotiations began in November 2012.

On deepening of India’s relations with Asean, Prabhu said that together the two “can unleash latent synergies through mutual cooperation” in business and trade and that both sides should “co-build and co-operate” rather then compete.

He further said that India has taken up several projects in the region, bilateral trade has exponentially grown to $71 billion and the two sides are now aiming to scale it up to $200 billion by 2022.

Prabhu pointed out that taken together, India and Asean represents a combined population of two billion people and economy close to $5 trillion. (IANS)

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India to host 16th International Energy Forum conference from April 10-12

Jan 22, 2018 0

New Delhi– India will host the 16th ministerial round-table conference of the International Energy Forum (IEF) from April 10-12 in the national capital, Dharmendra Pradhan, Minister of Petroleum and Natural Gas, said here on Monday.

The conference will be co-hosted by China and South Korea, he said.

Dharmendra Pradhan

“The major theme of the conference will be on future of global energy security, transition, technology and investment opportunities,” he said.

Representatives from 92 countries will be present at the conference, including 72 member countries of IEF and 20 guest countries, the minister said.

Global energy organisations including the Organisation of the Petroleum Exporting Countries, International Energy Agency will also be represented at the meet, he said.

Talking of the significance of the event, he said: “India, China and South Korea are consumer countries… We are hosting IEF… Certainly when consumers will host the programme, consumers’ interests will dominate the discussions.”

India had last hosted the IEF ministerial conference in 1996, Pradhan said. (IANS)

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Apple announces $350 bn investments in US, delights Trump

Jan 18, 2018 0

Washington– In a New Year gift to President Donald Trump, Apple has committed to invest $350 billion in the US over the next five years that includes creating 20,000 new jobs and an anticipated repatriation tax payments of $38 billion as required by new laws.

“A payment of that size would likely be the largest of its kind ever made,” Apple said in a statement late on Wednesday, cheering Trump.

Tim Cook

“I promised that my policies would allow companies like Apple to bring massive amounts of money back to the United States. Great to see Apple follow through as a result of TAX CUTS. Huge win for American workers and the USA!” Trump tweeted.

The repatriation comes in response to changes to the tax law, approved at the end of 2017, which aim, among other measures, to persuade US companies to repatriate their capital by reducing tax burdens.

Under the new law, companies that make a one-time repatriation of cash will be taxed at a rate of 15.5 per cent on cash holdings and 8 per cent on non-liquid assets.

The Apple investments will concentrate in three areas where Apple has had the greatest impact on job creation: direct employment by Apple, spending and investment with Apple’s domestic suppliers and manufacturers, and fuelling the fast-growing app economy which Apple created with iPhone and the App Store.

“Apple is a success story that could only have happened in America, and we are proud to build on our long history of support for the US economy,” said CEO Tim Cook.

“We believe deeply in the power of American ingenuity, and we are focusing our investments in areas where we can have a direct impact on job creation and job preparedness,” he added.

Apple is already responsible for creating and supporting over 2 million jobs across the US and expects to generate even more jobs as a result of the initiatives being announced on Thursday.

Apple already employs 84,000 people in all 50 US states.

Planned capital expenditures in the US, investments in American manufacturing over five years and a record tax payment upon repatriation of overseas profits will account for approximately $75 billion of Apple’s direct contribution.

“The company plans to establish an Apple campus in a new location, which will initially house technical support for customers. The location of this new facility will be announced later in the year,” Apple said.

Over $10 billion of Apple’s expanded capital expenditures will be investments in data centres across the US.

The iOS app economy has created more than 1.6 million jobs in the US and generated $5 billion in revenue for American app developers in 2017.

Last year, after Trump announced that Cook has promised to build three new manufacturing plants in the country, the tech giant revealed plans to build a $1.3 billion data centre in Waukee, Iowa.

“Our new data centre in Iowa will help serve millions of people across North America who use Siri, iMessage, Apple Music and other Apple services, all powered by renewable energy,” Cook said.

In an interview with the Wall Street Journal in July, Trump said he had a phone conversation with Cook. “He’s promised me three big plants – big, big, big,” Trump said, referring to Cook.

“I said you know, Tim, unless you start building your plants in this country, I won’t consider my administration an economic success. He called me, and he said they are going forward,” Trump was quoted as saying.

Trump has reiterated several times that he would bring jobs back to the US. (IANS)

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India to become $5 tn economy in next 8-9 years: Suresh Prabhu

Jan 17, 2018 0

New Delhi– India is expected to become a $5 trillion economy in the next eight-nine years with the manufacturing sector alone contributing 20 per cent towards that, Union Commerce Minister Suresh Prabhu said on Wednesday.

“We are preparing a detailed plan towards achieving that. Experts are busy preparing the roadmap including all the sectors where manufacturing can be promoted. If manufacturing is digitised, it will create a huge opportunity for technology firms,” Prabhu said.

Suresh Prabhu

Speaking on the first day of the India Digital Summit organised by the Internet and Mobile Association of India (IAMAI) here, the minister said innnovation cannot be confined to geographical borders.

“In order to reach the $5 trillion economy, manufacturing will contrinute $1 trillion and services will contribute $3 trillion,” the minister told the gathering.

Prabhu said he was currently working on a strategy for international trade which will contribute $2 trillion to the economy, where the contribution can come both from manufacturing and services sectors.

Earlier in the day, Niti Aayog Chief Executive Amitabh Kant said that every Indian will have a smartphone in the next five years.

There were nearly 400 million smartphone users in the country, he said, adding this was a period of huge technology disruption in the country.

“Today, 85 per cent of the devices are still unconnected. Therefore, there is a huge opportunity in the Internet of Things (IoT) space. The opportunity would be in the range of $70 billion by 2025,” Kant told the gathering.

According to him, Artificial Intelligence (AI) alone will generate opportunity to the tune of $32 billion.

“Advanced robotics are already handling 25 per cent of the jobs. This will rise to 45 per cent in the coming years.

“India is already ranked globally as the most active Internet user globally on a monthly basis. Digital transaction will touch $100 trillion in the next 10 years,” he told the gathering.

With 99 per cent Aadhaar penetration and bank account opened under Jan Dhan Yojana, he said, the scope was immense for the Fin-Tech industry.

“As far as the start-up community goes, ‘Make in India’ initiative had brought in a paradigm change in the financial ecosystem. While we have 4,000 start-ups, it will go up to 12,000 by 2020,” Kant said, adding that about 600 start-ups were there in the FinTech sector which will become a $14 billion opportunity by 2020.

The challenges today for the country were to provide safe drinking water, create infrastructure and build flyovers. All these give unicorns a unique opportunity to invest and explore, Kant said.

Telecom Secretary Aruna Sundararajan said that for IoT to happen, we need to have a robust 4G ecosystem in the country.

“I am hopeful that by the end of this year, we will have a pan-India 4G network availability,” Sundararajan told the audience.

She mentioned that the government has constituted a task force for rolling out the 5G network in the country.

The taskforce will come out with a roadmap soon, she said, adding that the Department of Telecommunications is keen on partnering with key telecom providers in the roll-out stage.

Delivering the inaugural address, Rajan Anandan, Chairman, IAMAI, and Vice President, Google India and South-East Asia, said these are exciting times for the Internet adoption in the country.

“Availability of very low-cost yet high-speed mobile Internet connection in 2017 has moved a slow-speed nation to a high-speed nation,” Anandan noted. (IANS)

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Rajasthan refinery will change state’s future: Modi

Jan 16, 2018 0

Barmer (Rajasthan)– Prime Minister Narendra Modi on Tuesday said that the petroleum refinery he inaugurated in Barmer district will not only change the future of Rajasthan, but also help generate energy for the entire country.

He said that when the country celebrates in 2022 the 75th anniversary of its independence, a new source will help produce energy which would be sent across India.

He was addressing the work commencement ceremony of the Rs 43,129 crore refinery project at Pachpadra in Barmer district on Tuesday in the presence of Chief Minister Vasundhara Raje and Petroleum Minister Dharamendra Pradhan.

“Rajasthan is taking the lead to become the energy powerhouse of the country,” Modi said while addressing the event.

The Prime Minister said lakhs of people would get employment and the economic scenario in the region would change.

The refinery, a joint venture between Hindustan Petroleum Corporation Limited and Rajasthan government, will have the capacity to refine 90 lakh crude oil annually.

Due to be completed by 2022, the project is expected to bring Rs 34,000 crore to the state government coffers annually.

He appreciated the efforts of Oil Minister Dharmendra Pradhan and Rajasthan Chief Minister Vasundhara Raje who initiated the process to turn this project into reality.

“We cannot mislead people by installing stones. As in 2022 we complete 75 years of independence, we will ensure that our refinery starts functioning in the same year,” Modi said.

He took a dig at the Congress, saying: “We don’t want people to come and ask us that after installing the stone why you did not take action on implementing the same.”

The foundation stone laying ceremony had been performed four years ago by then Congress President Sonia Gandhi.

Modu said the Congress had installed stone plaques across the country and misguided the public. He said he hoped that henceforth the public would ask for the date of commencement of public works.

Taking a dig at the Congress, the Prime Minister said he had heard people say that the Congress and drought were twins.

“When the Congress comes to power, drought comes along. On the other hand, whenever Raje becomes the Chief Minister, dry regions of the state receive good rains.”

Due to Raje’s untiring efforts, the refinery project, which was getting delayed, was finally realised and Rajasthan will benefit, he added.

Hitting out at the Congress on the issue of inauguration of the refinery project twice, Chief Minister Raje said: “We don’t believe in installing stones, but we believe in working hard to build a building. We work to turn our efforts into reality.”

Accusing the earlier Congress government of not doing anything after the stone-laying ceremony, she said: “There was no planning, no seriousness and no projection of implementing this scheme. We are doing this with a lot of planning.”

The refinery work has been kicked off by our Prime Minister and I firmly believe that it will be inaugurated also by Modi, she said.

Raje said the Bharatiya Janata Party government in the state had made farmers a partner in developmental process through the new Solar Energy Policy.

In the next one year, Bhadala Solar Park with 2,255 MW generation capacity will be set up and another with 1,000 MW capacity will come up in Nokh in Jaisalmer.

The programme was also addressed by Pradhan who said the refinery will bring in lot of growth and development in the state. (IANS)

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Tech Mahindra Partners With Online Learning Platform edX

Jan 13, 2018 0

NOIDA, India–Tech Mahindra announced their partnership with edX.org, the leading global non-profit, open-source learning destination founded by Harvard and MIT.

This is edX’s first ever collaboration of this kind with a global technology brand headquartered in India, and comes on the heels of recent partnership with GE, wherein the company has also guaranteed interviews to learners who complete specific MicroMasters programs.

Since first announced in September 2016, edX and 25 international partners have launched 46 MicroMasters programs. Since edX began in 2012, India has consistently remained the platform’s second largest learner base, underscoring the strong need for high-quality education in India and the enthusiasm of Indian learners. Over the last couple of years, edX has witnessed great momentum with 96% growth in its Indian learner base. With more than 1,500,000 Indian learners, India makes up 11% of the edX learner base overall.

Anant Agarwal (left) and CP Gurnani

The Tech Mahindra initiative is aimed at reskilling company’s existing 117,000+ employees in India and across the globe, enabling their development and growth through world class programs offered by leading Universities in areas like IoT, Cyber security, VR, Machine Learning, Big data, Analytics etc.

As part of the partnership Tech Mahindra will also offer opportunities for pre-identified learners enrolled in an edX MicroMasters program. Anyone who completes these programs and meets the minimum criteria of education and work experience, Tech Mahindra will assure a job interview with the company.

The MicroMasters programs are an in-depth and rigorous series of courses, with a path to credit from prestigious universities. To learn more about MicroMasters programs on edX, visit www.edx.org/micromasters.

This engagement empowers Tech Mahindra associates with much needed learning opportunities to enhance their careers and stay relevant in the Digital Age. Tech Mahindra has worked out special schemes for its employees where they can self- fund the certifications at discounted rates to be reimbursed on successful completion of the course. edX platform leverages the years of classroom learning experience of best universities in the world with neuroscience to deliver an active learning experience and holds the learner’s interest while learning online.

“Training and Reskilling are more imperative and relevant to reinvent and tap into new market opportunities arising out of technological change and new customer requirements,” said CP Gurnani, CEO and MD at Tech Mahindra. “Today’s disruptive business landscape demands for our talents to be future ready and it is our prime responsibility that the right tools and innovative pathways are facilitated for them. However, in the new world the employee has to bear the onus as learning accountability is now increasingly shifting to the employee.”

Mr. Gurnani said his firm is excited to work together with edX because careers will be facilitated with a blended learning environment as well as this gives the firm the opportunity to bring in new ideas to the table and enhance the customers’ experiences.

“EdX is driven by the mission to provide access to high-quality education that transforms lives and advances careers to all learners, everywhere. This groundbreaking partnership with Tech Mahindra furthers our mission and underscores our commitment to edX learners in India and around the globe,” said Anant Agarwal, edX CEO and MIT Professor. “Through this innovative work with Tech Mahindra, we are working together to offer learners the tools they need to gain knowledge in the most cutting edge fields, including Cybersecurity, Internet of Things, Artificial Intelligence, Big Data and Business Analytics amongst others, in order to fast-track their careers and secure in-demand jobs.”

This is edX’s first ever collaboration of this kind with a global technology brand headquartered in India, and comes on the heels of recent partnership with GE, wherein the company has also guaranteed interviews to learners who complete specific MicroMasters programs.

Since first announced in September 2016, edX and 25 international partners have launched 46 MicroMasters programs. Since edX began in 2012, India has consistently remained the platform’s second largest learner base, underscoring the strong need for high-quality education in India and the enthusiasm of Indian learners. Over the last couple of years, edX has witnessed great momentum with 96% growth in its Indian learner base. With more than 1,500,000 Indian learners, India makes up 11% of the edX learner base overall.

EdX.org is the leading online learning platform founded by MIT and Harvard. It is the premier open source, non-profit learning destination and massive open online course (MOOC) provider, offering high-quality courses and programs from the world’s best universities and institutions.

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Is Apple really doing badly in India?

Jan 11, 2018 0

By Faisal Kawoosa

Given the current market conditions in India for smartphones, it appears that Steve Jobs, the late Apple co-founder, was prophetic: He did not consider this country a significant opportunity.

Let’s take a look at the Apple story since its entry into India in 2008. A lot has changed in the market — changes that have been favourable for consumers and the industry but, perhaps, not so much for Apple.

Tim Cook

In the decade since its arrival, almost all the segments — barring the $100 to $200 segment — have seen a decline in the competitive and price-sensitive Indian market. But what should concern the Cupertino-based iPhone-maker is the steep fall in the $400-and-above market.

In 2008 and 2009, this segment used to account for 30 per cent of the total smartphone shipments. From 2010 onwards, around the time domestic brands made their entry in the ring, helping to expand the sub-$100 category, the premium segment fell to half at 15 per cent.

Barring a spike in 2011, the $400-and-above market has been on the decline in terms of shipment contribution. In the period, whatever growth took place in the smartphone market, happened at the lower end of the price strata.

Since 2013, the $400-plus market has been in single digits, and this is obviously not a good sign for a premium brand like Apple in India — even if the iPhone SE is taken into account, which is more of a mid-premium smartphone and is now being assembled in Bengaluru.

The big question now is: Has Apple’s poor performance in India been on account of some loose ends in its strategy? Or is it merely because of the segment/s in which the Cupertino-based iPhone-maker operates?

Let us examine the market share of Apple in the segments it operates in.

Over its decade-long presence in the country, Apple has been operating in three price segments. Among these, $400-plus has been the staple where the tech giant has performed superbly.

From just over five per cent share of the segment in 2008, when Apple said ‘Namaste’ to India, it currently enjoys over 47 per cent share in the $400-and-above smartphone segment by units.

In terms of revenues, Apple has also seen consistent growth despite pressures like shrinking opportunities in the premium segment as well as falling average selling prices — not the forget the “forced” downward movement to cater to the mid-premium segment.

In 2017, till September end, there has been a 21 per cent revenue decline compared to the calendar year 2016.

But then, Apple has witnessed good annual growth rates since 2010 — its average annual revenue growth rate has been 116 per cent in its first decade of presence in India.

Both from the revenue as well as volume aspects, Apple has seen a consoling India story so far.

The real issue is the growth in the premium segment with several players, incluing from China, now offering devices. This segment is going to see some difficult times ahead owing to the fact that, after Jio surfaced on the landscape, the opportunity now shifts towards the entry-level players to let a user have his or her first smartphone experience.

In the era of “Desh Ka Smartphone” and “Mera Pehla Smartphone”, it would be challenging for any premium smartphone brand, including Apple, to grow like in the past.

The overall declining growth in all price segments of smartphone over the last decade or so, Apple’s consistent growth in revenues as well as its increasing growth in market share in the segment(s) it is present, has an interesting story to tell.

For Apple, revenues as well as its market standing is on the rise so far, as it faces the peculiar nature of the domestic market.

Was Jobs able to foresee this peculiarity of the Indian smartphone market or was his interpretation something different?

Whatever his interpretation, the impact for Apple is more or less the same. (IANS)

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