THE BIG IDEA | PAGE 20 BRANDWAGON | PAGE 9 PhysicsWallah’s journey from home tutor to edtech tsar ECONOMY | PAGE 3 Micro magic:Are bite-sized dramas the future? MUMBAI, MONDAY, MARCH 17, 2025 Trump has a clear road map, Modi tells US podcaster FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL LXV NO. 63, 20 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 IN THE NEWS Textile companies under lens for GST discrepancies CENTRAL GOODS AND Services Tax (CGST) officials have investigated over two dozen textile manufacturing companies in recent months for wrongly classifying textile processing activities and subsequently paying lesser tax, reports Priyansh Verma. ■ PAGE 2 Study-abroad platforms target foreign students INDIAN STUDYABROAD PLATFORMS are increasingly diversifying their business models by expanding into international markets, as the number of Indian students opting to study abroad dropped by 15% in 2024 from a year ago, reports Anees Hussain. ■ PAGE 4 India, New Zealand to resume FTA talks after 10 years AFTER A GAP of nearly 10 years, India and New Zealand on Sunday announced resumption of negotiations for a free trade agreement (FTA), reports Mukesh Jagota. The announcement came on the eve of a meeting between PM Narendra Modi and New Zealand Prime Minister Christopher Luxon. ■ PAGE 2 FE SPECIALS ■ BRANDWAGON, P9 End of cola peace Campa’s aggression has intensified segment squabbles ■ EXPLAINER, P6 Should India look more favourably at BTC? US has announced the establishment of a Strategic Bitcoin Reserve LENDERSTO GET60% GUARANTEE COVERAGE MSME credit cover of `1.5 Lcr on the cards PRASANTA SAHU New Delhi, March 16 EASING ACCESS THE CENTRE IS targeting credit guarantee covers worth up to `1.5 lakh crore formicro, small and medium enterprises in 2025-26.These guarantees would be provided under the newly launched Mutual Credit GuaranteeSchemeforMSMEs. Theschemeseekstoprovide a 60% guarantee coverage by National Credit Guarantee Trustee Company Limited (NCGTC) to member lending institutions (MLIs).This would be for a credit facility of up to `100 crore sanctioned to eligibleMSMEs(medium,smalland microenterprises)forpurchase of equipment ormachinery. “In 2025-26,we are targetingcreditguaranteesworth`11.5 lakh crore,” a senior official said.He added the government expects significant demand from small enterprises looking to bridge a credit gap.As such, he expects that the `1 lakh croreworthofguaranteewould be used up. In fact, the scheme could be reviewed after six months to assess the usage.“If theMCGS-MSMEworkswell,it cancontinueformorethanfour years and the target of `7 lakh crore can be enhanced accord- ■ Cabinet cleared scheme for four years or till total guarantee of `7 lakh crore is exhausted; `1-1.5 lakh-crore target is for FY26 ■ Credit gap for MSMEs pegged at anywhere between `15L cr and `45L cr ■ Banks and other lenders will be provided 60% guarantee MSMEs contributed 30.1% to GDP and 36% to manufacturing output in 2022-23 ingly,” the official said. The scheme was approved by the Cabinet on January 29 for a period of four years or till the cumulative guarantee of `7 lakh crore is exhausted, or whichever is earlier.The idea is tofacilitatecollateral-freeloans by banks and financial institutions to MSMEs. Various estimates put the credit gap for MSMEs at between`15lakhcroreand`45 lakhcrore.Thisnecessitatesregularsurveystoassesstheimplementationofthegovernment’s creditprogrammes.Thegovernment is mulling such periodic assessmentstoassisttheMSME coverage for loans of up to `100 cr to MSMEs ■ The sector contributed 45% to exports in 2023-24 sector.Banks and non-banking financial companies had outstanding loans of `31.7 lakh crore to the MSME sector in March 2024, up from `18.48 lakh crore in March 2020. The Emergency Credit Line GuaranteeScheme,rolledoutin 2020duringthepandemic,was extended till March 2023. Underthe scheme,11.9 million guarantees worth `3.68 lakh crorewereissuedtoMSMEsand otherbusinesses.Asperthedata for 2022-23, the MSME sector contributed 30.1% to GDPand 36% to manufacturing output. In 2023-24, the MSME sector contributed 45% to exports. Fashion seasons get shorter: Cut,stitch & sell in a month VIVEAT SUSAN PINTO & S SHANTHI Mumbai/Bengaluru, March 16 FASHION RETAILERS INCLUDING Arvind Fashions, Trent, Blackberrys, and MaduraFashion&Lifestyleare presenting collections almost everymonth these days.That’s down from the typical sixmonthly cycle and in response to consumers’ more frequent demands for newer styles. While the concept of a quick rollout to market is not new to the fashion world with global brands Zara and Uniqlo leading the way, in India retailers arecatchingupwiththistrend. A recent study by Vector Consulting, a consultancy whichworkswith retailers and garment companies, and NielsenIQ notes that now11% of the collections have crunched timelines to 3-5 months, with 2% bringing down the lead time to under three months. That compares TRENDING NOW Duration of development collections (in %) More than 12 months Less than 3 months 3-5 months 2 11 11 37 9-12 months 39 6-9 months Source: Vector Consulting withtheearliertimelineswhen 39% of apparel collections took 6-9 months in terms of rollout to market. Experts and top executives say that retailers could speed up more collections as they cater to consumers’ needs. A growing base of Gen Z consumers,that is active on Instagram, wants to fast replicate designs and styles trending on social media. Time, therefore, is of essence for both brands and consumers. Kulin Lalbhai, vice-chairman and executive director, Arvind,believes the concept of having something new every time you walk into a store or when you browse online is becoming very important in the world of fashion today. “Retailers such as us have also moved away from a wholesale distribution model to a direct distribution model. While wholesale distribution gave us room to do only two seasons a year, with direct distribution we have greater control over what we can bring to the market, helping us crunch lead times and launch more collections a year,”Lalbhai said. Continued on Page 17 The first ofa 2-part series on howvarious sectors are preparing to face reciprocal tariffs Market accessworryprompts industry’s zero-for-zero pitch FACING GROWING TRADE TIES TARIFF RISK- I PRIYANSH VERMA & SANDIP DAS New Delhi, March 16 THE US GOVERNMENT’S reciprocal tariff threat seems to have finally prompted Indian industrytogiveuponitscraving forprotection.Arangeofsectors from gems & jewellery and pharmaceuticals to emerging ones like electronics and automobilesarepitchingforareduction—insomecasesevenelimination — of import tariffs,as a way to mitigate the potential adverse impact of the US move. Industry executives and experts FE spoke to, advocate a nuancedapproachontheissue. ThisisbecauseIndianindustries and other stakeholders includingfarmersandlivestockbreedersareatdisparatelevelsofpreparedness when it comes to US exports US imports to India from India (in $ billion, 2024) Agri, meat & processed food Automobiles Diamonds & gold Chemicals and pharmaceuticals Electrical, telecom, & electronics Iron, steel & base metals Textile & clothing Ores, minerals & petroleum Total (including other items) 1.94 0.42 1.92 3.52 1.34 2.45 0.4 11.12 34.34 6.4 2.8 11.88 18.44 14.4 5.4 10.8 3.34 91.23 Tariff differential between India & US (%) 32.37 33.10 13.32 8.63 7.24 2.48 1.37 -4.36 4.88 Source: GTRI facingunhinderedcompetition from the US exporters. Besides,the US is the largest foreign market for Indian producers of goods and services, accounting for 18% of its merchandiseexports.Sincetheeconomic ties between the two countriesaresovaried,andtheir strategic relations at highstakes,anyresponse to US President Donald Trump’s move »TOMORROW« 80% OF INDIAN AGRI EXPORTS CAN FACE HIGHER US TARIFFS must be carefully thought out, they say. How the Trump administrationwouldstructure itsso-called“fairandreciprocal” plan is yet to be spelt out.A key questioniswhethertheUSplan isforcountry-levelreciprocityor aproduct-levelapproach.Inthe lattercase,GoldmanSachsreckons, the tariff differential (or adjustments to be made by India in its customs duties) will be much largerat 11.5 percentagepoints(pp),versusweighted average tariff gap of 6.5 pp underacountry-wideapproach. Continued on Page 17 Hyundai plans to ride small EVto top SWARAJ BAGGONKAR Mumbai, March 16 SALES OF TOP 5 EV MAKERS AIMING FORTHE top position in the electric vehicle (EV) space, South Korean car brand Hyundai is planning to add a compactEVtoitsIndialine-up. The company has two EVs on sale in India but is a distant third with a market share of 8%,as of February end. An EV built on a dedicated platform is being developed by HyundaifortheIndianmarket. This product could include a localised drivetrain and power electronics besides locally sourced cells for the battery pack.“WestartedwiththeIoniq 5beforelaunchingtheCretaEV. Next time we will go further down.We will cover the entire range to cater to the market demand and customer preferences,” Unsoo Kim, managing director, Hyundai Motor India, (In units) Tata Motors 43 Feb 2025 Market share (%) Hyundai Motor 738 481 8 y-o-y change (%) M&M 3,825 478 26 36 3,270 198 Source: Federation of Automobile Dealers Association said earlier this year.Currently, there are only three models on offer in the sub-`10 lakh segment — Tata Tiago EV, Tata Punch EV, and MG Motor Comet.Thesevehiclesofferalittleoverhalftherange(between 230km and 365km) offered by premium models such as Tata Curvv,HyundaiCretaEV,MGZS EV, Maruti eVitara, Mahindra 26 5 MG Motor India BE 6, and Mahindra XEV 9e (400-550 km range). Starting with the `46 lakh, 630-kmrangeIoniq5EVinJanuary 2023, Hyundai adopted a “top-down approach” for the segment.Thecompanyfollowed it upwith the electricversion of the Creta sports utility vehicle (SUV)inJanuarythisyearat`18 lakh. “Hyundai may be late to BYD India 254 3 68 enter the EVsegment but it can becometheleadingcompany in thissegmentinthefuture.With the backing of technologyfrom itsparentcompanyanditsdeep localisationroots,itisplanninga varietyofEVsforIndiaincluding a small EV,” said a company source. Continued on Page 17 AI being used forcollusion: CCI chief MANU KAUSHIK New Delhi, March 16 ARTIFICIAL INTELLIGENCE (AI) IS being used for “collusion” by sections of Indian industry,Ravneet Kaur,chairperson of the Competition Commission of India (CCI), said on Sunday, adding that the regulator would equip itself to deal with it. “Companies are usingAI to coordinate prices without explicit agreements, and are engaging in algorithmic discrimination under the garb of dynamic pricing,” Kaur said. According to her,the rapid adoption of AI has become a driving force in modern markets. “Through the use of AI, we are seeing that there could be potential ways of collusion which don’t require human intervention. The regulators need to be up to date, be abreast of these developments, and its implications for competition,” she said. The CCI chief added that today, market power is about network effects, data RAVNEET KAUR, CHAIRPERSON, CCI Companies are using AI to coordinate prices without explicit agreements, and are engaging in algorithmic discrimination under the garb of dynamic pricing and platform reach. “The innovation in technology and emergence of new business models are happening at an astronomical pace. At the same time, regulations need to encourage innovation while ensuring that we have a dynamic and proactive approach in balancing innovation with competition,” Kaur said. In 2024 alone, 42 antitrust cases were placed before the commission. Continued on Page 17