OPINION, P6 MARKETS, P10 INTERNATIONAL, P8 EDITORIAL SOARING VALUE ASSASSINATION PLAN Ambani-led RIL’s m-cap now bigger than all PSUs put together Trump says he wanted to kill Syria’s Assad after earlier denying it To curb rising infections, need more health infra and contact tracing Profiling helps China to target India better, govt must find ways to counter propaganda NEW DELHI, WEDNESDAY, SEPTEMBER 16, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 170, 30 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 39,044.35 ▲ 287.72 NIFTY: 11,521.80 ▲ 81.75 NIKKEI 225: 23,454.89 ▼ 104.41 HANG SENG: 24,732.76 ▲ 92.48 `/$: 73.65 ▼ 0.16 `/€: 87.53 ▼ 0.35 BRENT: $39.96 ▲ $0.35 GOLD: `51,915 ▲ `655 ● TRADE WAR US tariffs on $200-billion China goods illegal: WTO JAMEY KEATEN Geneva, September 15 THE WORLD TRADE Organization (WTO) on Tuesday said that Trump administration tariffs on Chinese goods totalling more than $200 billion are illegal under the rules of the global trade body. Thedecisionmarksthefirst time the Geneva-based trade body has ruled against a series of tariffs that US President Donald Trump’s government has imposed on a number of countries, allies and rivals alike. Trump has repeatedly criticisedtheWTO,whichoversees international disputes on trade,forallegedlytreating the US unfairly. In its decision, the WTO ruled against the Trump administration’s argument that China has engaged in practices harmful to US interests, on issues including intellectualpropertytheft,technology transfer and innovation. The ruling,in theory,would allow China to impose retaliatory tariffs on billions worth of US goods — if the process is completed. Continued on Page 20 HIGH TAXES Toyota won’t expand in India Says needs to protect jobs; utilising capacity created to take time ANURAG KOTOKY September 15 TOYOTA MOTOR WON’T expand furtherin India due to the country’s high tax regime, a blow for Prime Minister Narendra Modi, who’s trying to lure global companies to offset the deep economic malaise brought on by the coronavirus pandemic. Thegovernmentkeepstaxes on cars and motorbikes so high that companies find it hard to build scale, said Shekar Viswanathan,vice-chairmanof Toyota’s local unit,Toyota Kirloskar Motor. The high levies also put owning a car out of reach of many consumers, meaningfactoriesareidledand jobs aren’t created,he said. “Themessagewearegetting, after we have come here and investedmoney,isthatwedon’t want you,” Viswanathan said in an interview. In the absence of any reforms, “we won’t exit India,butwewon’t scale up”. Toyota began operating in India in 1997. Its local unit is owned 89% by the Japanese The message we are getting, after we have come here and invested money, is that we don’t want you...we won’t exit India, but we won’t scale up. —SHEKAR VISWANATHAN VICE-CHAIRMAN, TOYOTA KIRLOSKAR MOTOR company and has a small marketshare—just2.6%inAugust versusalmost5%ayearearlier, FederationofAutomobileDealersAssociations data show. While Toyota Kirloskar continues to be committed to India and needs to protect jobs, utilising the capacity it has created “will take time”, the company said in a statement after the Bloomberg storywas published. Continued on Page 2 LADAKH A 'CHALLENGE' INVESTMENTS IN START-UPs House panel for 2-yr LTCG tax removal Proposal comes at a KEY SUGGESTIONS time when Covid-19 Abolish LTCG on investments made by angel pandemic has hit funds,AIFs into start-ups several businesses ‘Be self-reliant, ease curbs on AIFs to boost start-up funding’ FE BUREAU New Delhi, September 15 FE BUREAU New Delhi, Sept 15 THEPARLIAMENTARYSTANDING committee on finance has suggested that the long-term capital gains (LTCG) tax be abolished for at least two years on investments in start-ups made by collective investment vehicles (CIVs) such as angel funds, alternative investment funds (AIFs) and certain limited liabilitypartnerships (LLPs). “After this two-year period, the Securities Transaction Tax (STT) maybe applied to CIVs so that revenue neutrality is maintained,”said the report of the panel, headed by former minister of state for finance Jayant Sinha.The report titled, Financing the Start-up Ecosystem,wastabledinParliamentat a time when the Covid-19 pandemic has threatened the survival of thousands of start-ups that are gasping for liquidity. Tighter scrutiny of Chinese investments has added to the difficultyin getting funds. Replace LTCGwith STTafter two years; bring tax parity between domestic & foreign investors Form an expert panel to firm upvaluation methodology for start-ups Exempt asset management services to foreign investors from GST Venturecapitalinvestments in start-ups crashed between April and Julyin thewake of the pandemic. Domestic start-ups witnessed 40 Series A deals worth $156 million during the period, sharply lower than the 66worth$421millionbetween December and March, accordingtoVentureIntelligencedata. Continued on Page 20 INDIA NEEDS TO cut dependence on capital from keydestinations such as the US and China for its start-upsandbecome“selfreliant” by having several large domestic growth fundspoweredbylocalcapital to support its unicorns, theparliamentarystanding committee on finance said inareport,seeminglyechoingthegovernment’slatest Aatmanirbharinitiative. Interestingly, of the 21 Indian start-up unicorns (with a combined valuation of about $73.2billion) that featured in the Hurun Global Unicorn Index released in August, as many as 11 have got funding fromChineseinvestors like Alibaba, Tencent and DST Global. Continued on Page 20 SERUM INSTITUTE ‘Not enough Covid vaccines till 2024’ FE BUREAU New Delhi, September 15 HEALTH MINISTER Harsh Vardhan has spoken of how India is likely to get a vaccine for Covid-19 by the first quarter of next year, but the person responsible for manufacturing it seems to be less sanguine. In an interview to Financial Times, Adar Poonawalla, chief executive of Serum Institute,theworld’slargestvaccine producer,hassaiditwilltaketill theendof2024foreveryonein the world to be inoculated. Poonawalla told FT that pharmaceutical firms the world over were not ramping up capacity fast enough to deliver the vaccine faster than that. Poonawalla told FT that if BILLIONAIREPHILANTHROPISTBillGateshassaidIndia’s willingnesstoplaya“bigrole” in manufacturing a Covid-19 vaccine and allow it to supply tootherdevelopingcountrieswillbeacriticalpart in containing the pandemic globally. In an exclusive interview with PTI, ● FESTIVE SEASON FIRMLY ARTICULATING THE government’s position on the tense Sino-India border row in eastern Ladakh, defence ministerRajnath Singh onTuesday said China has been very clearly conveyed that any attempt to “unilaterally” change the status quo along the LAC is not at all acceptable, while acknowledging that India is facing a “challenge” in the region. Defence minister Rajnath Singh in the Lok Sabha onTuesday Making a statement in the Lok Sabha, Singh said there should be no doubt about the country’s determination to protect its sovereigntyand territorial integrity, and asserted that India’s armed forces are ready to deal with “all contingencies” in the high-altitude region. Referring to the Galwan Valley clashes on June 15, the defence minister said Indian soldiers“inflictedcosts including casualties on the Chinese side”,adding the House should have“full confidence”that the armed forceswill always rise to the challenge and make the country proud. Continued on Page 2 QuickPicks Exports drop 12.66% in Aug; trade deficit narrows CONTRACTING FOR the sixth straight month, India's exports slipped 12.66% year-on-year to $22.7 billion in August, on account of fall in the shipments of petroleum, leather, engineering goods and gems and jewellery items, as per the government data released on Tuesday, reports PTI. The contraction in August was higher compared with the 10.21% in July and 12.41% in June. The country's imports, too, declined 26% to $29.47 billion in August, leaving a trade deficit of $6.77 billion, compared with a shortfall of $13.86 billion in the same month last year, as per the data. PAGE 2 Centre approves AIIMS for Bihar’s Darbhanga THE UNION Cabinet has approved the establishment of a new All India Institute of Medical Sciences (AIIMS) at Bihar's Darbhanga, an official statement said on Tuesday, reports PTI. The institute will come up under the Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) at a total cost of `1,264 crore, it said. The new AIIMS is likely to be completed within a period of 48 months from the date of the approval by the Centre, the statement said. It will add 100 undergraduate (MBBS) seats, 60 B Sc (nursing) seats and will have 15-20 super speciality departments and 750 hospital beds, the statement said. hire 70,000 ahead of grand sale FE BUREAU New Delhi, September 15 FLIPKART ON TUESDAY said it will help create more than 70,000 direct jobs in the runup to its upcoming Big Billion Days sale. The direct jobs will be in addition to lakhs of indirect seasonal employment opportunities that the company expects the festive sale event to generate. The online festive sales are usually scheduled closer to Navratri and run for five to six days.The direct job roles will be accommodatedacrossFlipkart’s supplychainthatincludesdelivery executives,pickers,packers andsorters.Theindirectjobswill be facilitated at Flipkart’s seller partnerlocationsand kiranas. “This will be further supplementedbyjobcreationinancillaryindustriesincludingvendor locations and freight partners, astheentireecosystemscalesup forthe festive season,” the companysaid in a statement. Continued on Page 2 LIVE ACTION Hotstar hopes to hit `300 cr from IPL ads VENKATA SUSMITA BISWAS Mumbai, September 15 DISNEY+ HOTSTAR IS believed to be eyeing advertising revenues of `300 crore from the Indian Premier League (IPL) this year, with each associate sponsorreportedtobebringing in about `20 crore.The official online streaming platform for theIPL,Disney,hastiedupwith a total of 13 sponsors so far. Gopa Kumar, COO, Isobar India, believes the lack of people on the move, absence of some telco and other partnerships that made viewing free and putting the game behind a paywall would have only a marginal impact on the reach of IPL on Disney+ Hotstar. “There has been a dearth of sports content latelyand IPLis expected to have high engage- ment this year,”Kumar said. Mehul Gupta, co-founder and CEO, SoCheers, observed he is seeing high interest in performance-based marketing solutions on IPL.“Brands could either advertise in the second-half of IPL starting from semi-finals or for the whole duration. We are advising brands to invest about `15-45 lakh, for an optimal use of IPL,”Gupta told FE. Indeed, advertising revenueforStarSports,theofficial broadcaster of the IPL 2020, may marginally exceed last year’srevenueofabout`2,000 crore, given the tournament, which kicks off on September 19 and ends on November 8, coincideswithmuchofthefestive shopping season. While Durga Puja will be celebrated October 22 onwards, Diwali will be celebrated on Novem- ■ Poonawalla estimates the world will need 15 billion doses of vaccine if it is taken in two steps the vaccine, like the one for measles or the rotavirus,was a two-shot one, 15 billion shots will be required. Continued on Page 2 Covid vaccine: India role critical, says Gates Troops ready for‘all contingencies’: Singh Flipkart to PRESS TRUST OF INDIA New Delhi, September 15 ■ Serum CEO Adar Poonawalla’s remarks come even as Union health minister Harsh Vardhan on Monday said a vaccine would be ready by early next year ber 14.As much as 25-30% of total consumer spends on products such as two-wheelers, cars, consumer durables, apparel and even homes,takes placeduringthefestiveseason. Duetothe massivepent-up demand for live sports, especially cricket, analysts expect IPL 2020 to attract a record number of viewers. Continued on Page 2 New Delhi Gates, whose foundation is focusing on fighting the pandemic,called it the“next biggestthing”theworldhasbeen confronted with after the World War. The Microsoft co-founder said the world is looking to India for large scale production of Covid-19 vaccine once it isrolled out. ■ P2
The Financial Express (FE) is a business paper that’s closest to the people who are in the business of business. From business policies to market trends to new developments, The Financial Express comes packed with incisive news on every relevant issue.