COMPANIES | PAGE 2 COMPANIES | PAGE 2 Hero's Niranjan Gupta to step down as CEO inApril INTERNATIONAL | PAGE 17 Lodha brothers’ dispute: HC appoints mediator LUCKNOW, SATURDAY, FEBRUARY 1, 2025 US probing if DeepSeek used restrictedAI chips FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL 18 NO. 53, 36 PAGES, `12 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: 77,500.57 ▲ 740.76 NIFTY: 23,508.40 ▲ 258.90 NIKKEI 225: 39,572.49 ▲ 58.52 HANG SENG: 20,225.11 ▲ 27.34 `/$: 86.62 ▲ 0.01 `/€: 89.96 ▲ 0.20 BRENT: $76.85 ▼ $0.02 GOLD: `81,798 ▲ `770 ● ECONOMYSEEN GROWING 6.3-6.8% IN FY26 ● DEREGULATION CRITICALFOR MSMEs CEAto govt: Get out oftheway ECONOMIC SURVEY: QUICK PICKS GROWTH CURVE Price pressure risks may linger INFLATIONARY PRESSURES HAVE been easing globally, though risks of synchronised price pressures linger on geopolitical disruptions. Since pace of rate cuts varies across regions, there are potential divergences in economic recovery 6.3-6.8 6.4 7.0 8.2 9.7 GDP growth (real; % chg, y-o-y) FY26** FY25* FY24 FY23 FY21 FY22 3.9 Pvt participation needs acceleration PUBLIC SECTOR EFFORTS cannot fully meet the infrastructure investment requirements, given binding Budget constraints, There is a need for acceleration in private participation Low job growth State-led ease to slow economy of doing biz 2.0 CORPORATE PROFITS CLIMBED 22.3% in FY24, but employment grew by just 1.5% with wage growth moderating too. This risks slowing the economy by curbing demand FASTER GROWTH POSSIBLE only if the Centre and states roll out reforms that allow MSMEs to operate efficiently and compete cost-effectively. Ease of Doing Business 2.0 should be a state-led initiative ANANTHA NAGESWARAN, CHIEF ECONOMIC ADVISOR REFORMS BY THE CENTRE AS WELL AS STATE GOVERNMENTS MAY SET OFF A ‘BUTTERFLY EFFECT’ IN WHICH SMALL ACTIONS HAVE LARGE CONSEQUENCES *first advance estimates **Economic Survey -5.8 INDIA'S ECONOMIC GROWTH might not recover from the four-year low of 6.4% seen for FY25 (first advance estimates) in the next financial year, according to the Economic Survey 2024-25 tabled in Parliament on Friday. It stressed the need to employ the domestic levers with greater vigour to get back into the fast lane, while predicting that the rate of expansion of the real GDP in FY26wouldbebetween6.3% and 6.8%. The previous Survey,unveiled in July last year, had seen FY25 growth in the 6.57% range, with the risks evenly balanced. Though a medium-term growth of 7%-plus was envisaged then,this hasn’t been reiterated in the latest Survey. The authors of the Survey, led bychief economic adviser V Anantha Nageswaran, haven’t explicitlycalled the current slowdown structural; instead theyattributed it to a large extent to an unhelpful external world. However, the Survey proposed“grassrootslevel”structuralreforms,andafreeingup of the larger constituency of economic actors with “systematicderegulation”toimprove Indian economy's global competitiveness.“DeregulationismorecriticalforMSME growth than larger enterprises..who usuallyfind away around compliance,” it said. This amounted to a tacit recognition that capital and resources, including policy incentives, require to be more dispersed for productivity gains.“Navigating the global headwinds will require strategic and prudent policy management and reinforcing domestic fundamentals,”it said. Business activity should not be micromanaged and governments in general would do well to “get out of the way”. FY20 KG NARENDRANATH New Delhi, January 31 Continued on Page 12 Excessive financialisation can hurt WorkforcevulnerabletoAI,need forrobustupskillinginstitutions low-middle-income economy Wideninggapbetweencorporate profitsandemployeesalaries THESURVEYWARNEDthatexcessivefinancialisationcanhurta low-middle-incomeeconomysuchasIndia,reportsAnupreksha Jain.The dominance of conventional banks in providing credit has come down,while the reliance on otherfinancial products to fulfil credit needs has increased.It asked banks to enhance capabilities to meet the demands of new-age households. ■ PAGE 9 CORPORATE INDIA IS riding a wave of record-breaking profits, but employees have been left out, the Survey has said, reports fe Bureau.It highlights awidening gap between corporate profits and wages,raising concerns about income distribution,productivityandlong-termstability.“Profitsclimbed22.3%inFY24, butemploymentgrewbyamere1.5%,”theSurveysaid.■ PAGE 20 IN THE NEWS Sebi planning MF products with insurance portion SEBI IS PLANNING to come out with a new combo product under which mutual funds can pair investments with life insurance, chairperson Madhabi Puri Buch said on Friday, reports PTI. ■ PAGE 4 Centre's fiscal deficit at 56.7% of target in Apr-Dec THE CENTRE'S FISCAL deficit hit 56.7% of the annual target at `9.15 lakh crore in April-December, reports PTI. ■ PAGE 4 RESULTS CORNER NESTLE PROFIT UP 6%, MISSES ESTIMATES PAGE 2 PNB REPORTS TWOFOLD JUMP IN PROFIT PAGE 4 ASCONCERNSLOOMlargegloballyoverpossibledisplacement ofworkforce owing to the impact ofAI,the Surveysaid the cuntry’sworkforceinlow-skillandlow-value-addedservicesremain vulnerable,reports JatinGrover.To minimise the impact,it has recommendedcreationof‘robust’institutionsthatcanhelptransitionworkers to medium-and high-skilled jobs. ■ PAGE 8 Budget to give new energy: PM FE BUREAU New Delhi, January 31 ADAY BEFORE the Union Budget, Prime Minister Narendra Modi called on the citizens of India to aid in fulfilling the dreamofViksitBharatby 2047, whichwillmarkacenturyofthe nation’s Independence. Addressing the media prior to the tabling of the Economic Survey on Friday, the PM said thatthecountryisona“mission mode” to achieve innovation, inclusivityand investment. “I pray that Maa Lakshmi continuestoblessthepoorand middleclassofourcountry.Itis a matter of great pride that India completed 75 years as a democratic nation. India has established itself well on the globalpedestal...Thisisthefirst complete Budget of my third term,”hesaid.Pointingoutthat theBudgetwillgive“newenergy and hope”,he said,“innovation, inclusion,investmentwould be the basis of our road map for economicactivities”. His speech fuelled expecta- NARENDRA MODI, PRIME MINISTER I pray that Maa Lakshmi continues to bless the poor and middle class of our country tions that the government will rolloutmeasurestargetingeconomic relief, tax benefits, and women-centricinitiatives. Modi’sspeechplacedsignificant emphasis on women’s empowerment, reinforcingthe government’s commitment to inclusive development. Continued on Page 12 2025-26 TODAY FE will bring to you a special 2025-26 Budget edition on Sunday to analyse the implications of the proposals on consumers, investors, companies and the broader economy. Top industry leaders, economic thinkers and tax experts will analyse the fine print in the numbers and policy directions in the finance minister’s speech. PICK UP YOUR COPY OF FE ON SUNDAY ON FEB 2 ● BUDGET GLOSSARY PAGE 12 iPhonesaleslikelytopped $10bninIndialastyear JATIN GROVER New Delhi, January 31 BUMPER APPLE HARVEST CONTINUES India smartphone market volume share, Q4 2024 (%) Others Apple Oppo Samsung Mi Vivo US TECH GIANT Apple has been scoring big in India — be it sales, exports or market share.The company scaled an 11th straight quarterly revenue record in India in the October-December quarter, with analysts estimating that the iPhone maker’s gross revenue hit $10 billion, a growth of around 20%,in the country last year. CEO Tim Cook in a postearningscallsaidthatthecompany has set an all-time revenuerecordinIndiaduringthe October-December quarter. “I'm particularly keen on India. We're opening more stores there. The iPhone was the top selling model in India forthe quarter,”Cook said during the earnings call with analysts. “It's the second-largest smartphone market in the world and the third-largest for PCs and tablets, so there's a huge market. We have a very 23 9 15 24 16 11 14 15 18 16 17 20 Q4 2023 Q4 2024 Source: Counterpoint Research Monthly India Smartphone Tracker modestshareinthesemarkets. And so I think there's lots of upside there,”he added. Apple is launching four more retail stores in the country, and will also launch an India version of Apple Intelligence in April. Apple Intelligence isa personal intelligence system that uses AI to help iPhone users work, communi- cate and simplify tasks. Applehasbeenamajorbeneficiary of the smartphone production-linked incentive (PLI) scheme. It manufactures iPhones through its contract manufacturers — Foxconn, and now Tata Group-led Wistron and Pegatron. Continued on Page 12 Global companies have billions tied in Mexico and Canada supply chains Stakes high as tariff hournears PATRICIA COHEN, RIVER AKIRA DAVIS & ESHE NELSON London/Tokyo, January 31 MEXICO’S PITCH TO companies considering the American market was simple. Worried aboutvulnerablesupplychains? Need to reduceyourreliance on China? Want an inexpensive spot close to the US with favourable trade rules?TryMexico. Thousands of family enterprises to powerhouse brands in Asia,Europeandelsewherehave done just that in recent years. Adidas, Samsung, Honda, Hyundai, Nestle, Volkswagen, Volvo, Lego and more crowd Mexico’s industrial parks.That parade has grown following Covid-related supply chain nightmaresandincreasingpolitical tensions between the US THE SETBACK From today 25% tariff on imports from Mexico and Canada New 10% tariffs on all Chinese imports from China Global jitters ■ Adidas, Samsung, Honda, Hyundai, Nestle, Volkswagen crowded Mexico in recent years Canada benefited too with Honda, Toyota, Volvo setting up plants in recent years ■ ■ Japan alone has over 1,300 companies operating in Mexico, with more than half of them in manufacturing ■ Hundreds of Chinese firms migrated to Mexico in the hopes of sidestepping tariffs andChina.Canada—akeypartner in the North American production network — has also benefited.Lastyear,Hondaannounced plans to invest around $11 billion in new EV and bat- tery production plants in Ontario, alongside its existing facilities.Toyota and Volvo also have plants in Canada. Continued on Page 12 Find another sucker nation: Trump warns BRICS again US PRESIDENT DONALD Trump has once again warned that he will impose 10% tariffs against BRICS nations if they attempt to replace the dollar in internationaltrade,tellingthem to go and find “another sucker nation”, reports PTI. “The idea that BRICS countries are trying to move away from the dollar, while we stand by and watch, is over,” he said. Lucknow