India’s trade deficit narrows to 17-month low in February. US willing to reconsider termination of India’s preferential trade status. Apple to pay Qualcomm c. $31m for patent infringement. Google is likely to be hit with a third EU antitrust fine next week.
Jet may get a resolution plan in the next one week.
Moving on to the top Business stories of the week.
India’s trade deficit narrows to 17-month low in February. US willing to reconsider termination of India’s preferential trade status. Trade wars cost US economy $7.8bn in 2018, as per a study.
Narrowing Down: India’s trade deficit narrowed to a 17-month low of $9.6bn in February vs $14.7bn in January as merchandise imports fell on the back of lower crude oil prices.
Exports in February fell to 2.44%, with major foreign exchange earners such as gems and jewellery, engineering goods, and petrochemicals experiencing sluggish growth. Imports were also down 5.41% to $36.26bn.
Under Consideration: As per this report, the US government is willing to review India’s preferential trade status if it comes up with a trade proposal.
For Some Perspective: The US in November last year revoked duty-free concessions on import of at least 50 Indian products, primarily from handloom and agriculture sectors.
The news comes shortly after the Trump government threatened to terminate India’s designation as a beneficiary of the Generalized System of Preferences, which allows $5.6bn worth of Indian exports to enter the US duty free. The move came on back of allegations that India failed to provide assurances that it will give the US equitable and reasonable access to its markets in numerous sectors.
Costing Dearly: According to a study authored by a team of economists at the University of California Berkeley, Columbia University, Yale University and University of California at Los Angeles and published by the National Bureau of Economic research, President Donald Trump’s trade battles cost the US economy $7.8bn in lost GDP in 2018.
Jet may get a resolution plan in the next one week. Boeing plans to release upgraded software for its 737 MAX in the next 10 days. Boeing’s 737 Max revamp could cost it over $2.5 bn.
Men in Action: Jet Airways promoter Naresh Goyal and his joint venture partner Etihad Airways are likely to finalise a resolution plan for the debt-laden airline within a week.
Up to Date: The following terms have already been agreed upon:
- The two partners have already agreed upon a INR4,000cr interim financing plan according to which Etihad will put in INR750cr either on its own or from an offshore or onshore lender, and a matching amount will be provided by the Jet lenders
- Goyal has agreed that Jet Airways will pledge 34.9% of its shares in Jet Privilege to Etihad and the lenders for this interim loan
Damage Control: Boeing plans to release upgraded software for its 737 MAX within the next 10 days.
This is Why: Boeing has been working on a software upgrade for an anti-stall system and pilot displays on 737 MAX aircrafts in the wake of the deadly Lion Air crash in Indonesia in October. Read more on the matter here.
Costing Dearly: The software fixes on Boeing 737 MAX models is likely to cost the Chicago-based aircraft over $2.5bn as it redesigns a computerised flight-control system on hundreds of jets.
Boeing could end up spending $500m on software rejig alone. Another $2bn could go towards delivery delays and reimbursements to airlines for flight disruptions.
Mindtree to propose share buyback worth INR1,000cr to block L&T. Tesla may come to India soon. OYO acquires Innov8 in a INR220cr deal.
Dodge: Software services company Mindtree is likely to propose share buybackworth INR1,000cr in its Board meeting scheduled on March 20.
The move comes as a response to reports that Larsen & Toubro’s Board had cleared a proposal to buy Cafe Coffee Day founder V G Siddhartha’s 21% stake in Mindtree.
Tesla in India: Replying to a query on Twitter, Elon Musk replied that the company would love to be in India this year. If not, definitely next.
Interestingly, the comment comes months after he blamed restrictive policy for delaying the carmaker’s entry into the world’s fourth largest automobile market – India.
The Deal: Hospitality chain OYO has acquired Gurugram-based coworking startup Innov8 in an all-cash deal worth about INR220cr.
Under OYO, Innov8 will be working towards creating a capacity of 10,000 seats across India.
Founded in 2015, Innov8 currently hosts over 350 companies as members and claims to have a 95% occupancy across all its 15 coworking spaces with combined seating of approximately 5,500.
Besides, OYO itself has also started two new co-working brands—PowerStation and WorkFlo, which will cater to a variety of start-ups and companies.
Apple to pay Qualcomm c. $31m for patent infringement. Google is likely to be hit with a third EU antitrust fine next week.
No Escape: Following a two-week trial, a jury in federal court in San Diego determined that Apple had violated three Qualcomm patents in some iPhones.
What You Need to Know: Qualcomm had last year sued Apple alleging it had violated patents related to allowing phones to quickly connect to the internet after they’re switched on; battery efficiency and graphics processing; and a traffic management function that allows apps to download data faster. Qualcomm asked the jury to award it unpaid patent royalties of up to $1.41 per iPhone that violated the patents.
Not the First: Google is likely to be hit with a third EU antitrust fine next week related to its AdSense advertising service.
However, the sanction expected to be much smaller than previous fines.
Backstory: The European Commission had in 2016 opened a third case against the world’s most popular internet search engine by accusing Google of preventing third parties using its AdSense product from displaying search advertisements from Google’s competitors.
It said that Google, which at that time had held 80% of the European market for search advertising intermediation over the previous ten years, had kept its anti-competitive practices for a decade.
Health Ministry pushes for a ban on e-cigarette maker Juul’s entry into India. SBI launches Yono app which facilitates cash withdrawal from ATMs without a card.
Go Back Juul: India’s Health Ministry is pushing to block electronic cigarettes maker Juul’s entry into the country.
Health Secretary Preeti Sudan in a writes notes, “Novel products such as ‘Juul’ are harmful and addictive and could potentially undermine our tobacco control efforts.”
Juul plans to launch its products in India by late 2019 as it looks to expand away from its home turf.
India has about 106 million adult smokers, second only to China in the world, making it a lucrative market for firms such as Juul and Philip Morris International Inc.
Cash Without Card: SBI has launched a Yono app now which allows customers to withdraw cash from ATMs without a card.
Customers can initiate the cash withdrawal process on the YONO app and set a six digit YONO Cash pin for the transaction. They will also get a six-digit reference number for the transaction on their registered mobile number via SMS. The cash withdrawal has to be completed within the next 30 minutes at the nearest YONO Cash point using both PIN and the reference number received.
YONO can be accessed through Android and iOS powered mobile phones, and on the web through a browser.
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