Huawei Offers to Sign 'No Spying Agreement' with India, Curefit Raises $120m in Funding Round & Other Top Business News Today

Huawei offers to sign ‘no-backdoor agreement’ with India. Investment worth $14bn needed to lay 5G fibre network over the next 2-3 years, as per Crisil. US Secretary of State begins three-day visit to India. Indian Government might offer tax breaks to companies looking to shift base from China. RIL in talks with offshore lenders to raise long term loans worth $1.85bn. Curefit raises $120m in Series D funding round. Debit card transaction at PoS terminals increase in April. Carrefour wraps up operations in China after 24 years. Nissan shareholders approve administrative overhaul of crisis-hit automaker.

 

Moving on to the top Business news today: 

 

 5G 

Huawei offers to sign ‘no-backdoor agreement’ with India. Investment worth $14bn needed to lay 5G fibre network over the next 2-3 years, as per Crisil.

 

No Snooping: Chinese telecommunications giant Huawei has offered to sign a ‘no-backdoor agreement’ with the Indian government, which will stipulate that it will not allow any snooping on its network or handing over of data.

 

Moreover, Huawei has reported that it will proactively shift data of Indian consumers to within the country. Currently, some of its servers are in Singapore and some are in India.

 

The Why: The move comes on back of the widespread allegations that the Chinese government has been using the Huawei’s products and equipment for surveillance and espionage, a charge the company has repeatedly denied. 

 

An Expensive Affair: As per a report by the Crisil, Indian telecom operators may need to make investments of as much as $14bn for laying 5G fibre networks over the next 2-3 years.

 

A primary challenge for telecom operators in India will be the lack of investment in fibre network that can power 5G. 5G require 70 percent fiberisation levels compared with 25-30 percent at present. 

 

Paying Through the Nose: High cost of fibre in addition to the elevated 5G spectrum costs (the reserve price recommended by the Telecom Regulatory Authority of India (TRAI) for 5G spectrum is much higher than in countries like the UK or South Korea) is likely to make the entire project a costly affair for the Indian telecoms.

 

 TRADE  

US Secretary of State begins three-day visit to India. Indian government might offer tax breaks to companies looking to shift base from China.

 

The Trailer & Its Movie: It’s going to be a busy week for India-US relations. Secretary of State Mike Pompeo begins his three-day visit today and PM Modi and President Trump will meet in the sidelines of the G20 summit later this week.

 

Pompeo will meet External Affairs Minister S Jaishankar today and the agenda is clear – stimulate bilateral ties that have frayed recently due to a round of tariffs following India’s removal from the GSP programme.

 

Also on the table are Huawei’s involvement in India’s 5G programme, oil-related concerns as the Iran-US crisis deteriorates, and improving security ties between Washington and New Delhi to counter an expansionist China.

 

Supply Chain Management: Trump’s trade war against Beijing is remaking global commerce as companies look beyond China as a manufacturing base. Until now, Malaysia and Vietnam have benefited greatly while India, which one would imagine to be an obvious alternative to China, has largely missed out.

 

To change the scenario, the government is reportedly mulling attractive incentives in the form of tax breaks for companies looking to rebase from China. The government is also planning to set up affordable industrial zones along India’s coastline to boost manufacturing and investment.

 

This would benefit New Delhi’s eagerness to decrease the country’s reliance on imports and boost export, to say nothing of bridging its massive trade deficit with China.

 

 FUNDING 

RIL in talks with offshore lenders to raise long term loans worth $1.85bn. Curefit raises $120 million in Series D funding round.

 

Looking Outside: Reliance Industries (RIL) has entered into agreements with offshore lenders to avail long term loans aggregating to $1.85bn, primarily in order to meet parts of its planned capital expenditure.

 

Zooming Out: The Ministry of Corporate Affairs (MCA) had previously served a notice to RIL for diverting funds worth INR1,740cr, earmarked for Corporate Social Responsibility (CSR), to its own existing businesses.

 

In Other News: Health and fitness startup CureFit Healthcare has raised $120m as part of its Series D round of funding via equity and debt.

 

The funding round was led by existing investors Chiratae Ventures, Accel, Kalaari Capital and Oaktree Capital. New investors included Epiq Capital Advisors and Unilever Ventures. 

 

Founded by Myntra co-founder Mukesh Bansal and former Flipkart executive Ankit Nagori in 2016, CureFit aims to address preventive healthcare through a combination of engagement, coaching and delivery, using both online and offline channels. It has four verticals: Cult.fit, Eat.fit, Mind.fit and Care.fit. and is present in multiple Indian cities including Bengaluru, Mumbai, Delhi-NCR, Hyderabad, Chennai. It also entered Dubai recently.

 

 FINTECH 

Debit card transaction at PoS terminals increase in April.

 

Gathering Confidence: As per data from the RBI, over a third of all debit card transactions were made at point of sale (PoS) machines in April.

 

The Breakup: PoS machines registered over 34% of the debit card transaction volume in April. With about 80 crore withdrawals worth INR2.84L cr in April, ATM transactions made for c. 66% of the overall debit card transaction volume.

 

Hit Refresh: This was the only other time ATM transaction share fell below the two-thirds mark. The first was in December 2016 - a month after demonetization - when it was at 60.3% and PoS transactions at 39.7%, owing to the lack of cash in the system. 

 

Bonus: The RBI has already banned cryptocurrencies and is now reportedly working on a law, which would make holding cryptocurrencies a crime that would put you in jail. 

 

While cryptocurrencies have earned a rather bad name, not all currencies that move around using the blockchain technology are not of the same kind. A subgroup called stablecoins are linked to fiat currency, managed by banks and other reliable entities. 

 

Here’s an interesting piece discussing why India needs to be open to the possibility of using cryptocurrencies for international payments bypassing the dollar. 

 

 GLOBAL BIZ  

Carrefour wraps up operations in China after 24 years. Nissan shareholders approve administrative overhaul of crisis-hit automaker.

 

Failing to Deliver: Carrefour, one of the largest hypermarket chains in the world, is selling the majority of its market in China to a local retailer.

 

The French company will sell 80% of its shares to Chinese retailer Suning in a $705m deal.

 

Carrefour had a significant impact on retail in China since it entered the country’s market in 1995. It operates 210 hypermarkets and 24 convenience stores in 51 Chinese cities.

 

But in recent years, with the rise of e-commerce chains and consumer preference for home delivery of products, hypermarket chains like Carrefour have suffered. Earlier this year, Amazon, too, had sold its third-party online marketplace to a local competitor.  

 

Today, online food delivery in China accounts for 45% of the market, and its share of the pie is growing rapidly.

 

An Alliance in Peril: The Renault-Nissan-Mitsubishi alliance is the world’s biggest-selling auto group, responsible for one in nine vehicles sold worldwide.

 

The strategic partnership has been fraught with difficulties ever since the shock arrest of Carlos Ghosn, then-CEO of Renault, over charges of financial corruption.

 

Since then, ties between Renault and Nissan have frayed, with the Japanese automaker accusing its French partner of having too much control over its operations.

 

Now, with an aim to stabilise the alliance and save business, Nissan shareholders approved an administrative overhaul of the firm’s governance model. The reforms include the establishment of three new oversight committees and the election of 11 directors as a means to restructure the firm.  

 

Another conflict with Renault, which alleged that the new apparatus left it with decreased powers, was avoided when it was suggested that two top-ranking officials of the French partner sit on the appointments and audit committees.

 

The post-Ghosn revamping process is proving to be tedious for Nissan, which is also struggling with slowing business with profits falling to their lowest point in a decade.

 

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