Top Business News Today: Jet Airways News, Climate Change in India, Escalating Trade Wars

IndiGo to purchase jet engines worth $20bn from CFM. SBI files insolvency plea against Jet Airways. India wants all WhatsApp messages to be digitally fingerprinted. Foreign e-commerce companies still barred from FDI in multi-brand retail. The slowing economy is hitting graduates’ and post-graduates’ job prospects. Diversifying crop production could help mitigate the effects of climate change in India. Economic tensions between India and the US are escalating. A chance to re-invigorate EU-India relations. And why is the US in a fight with everybody? Saudi Arabia is cutting oil output and will ask OPEC to do the same. Shale oil production continues to rocket.

 

 AVIATION 


IndiGo to purchase jet engines worth $20bn from CFM. SBI files insolvency plea against Jet Airways.

 

Engines for Sale: India’s largest domestic airline, IndiGo, has placed a $20bn order for aircraft engines from CFM International. The engines are for the 280 Airbus A320neo and A321neo planes that it operates.

 
IndiGo previously faced many issues with the Pratt & Whitney (P&W) engines fitted in Airbus’ A320neo planes (Indigo recently ordered 430 of these planes). These glitches resulted in the grounding of many of the airline’s jets and disrupted operations.

 
While this deal is a blow to P&W, it strengthens CFM’s presence in India, where Vistara and Air India already use its engines.


Courting the Court: After failing to finalise a revival plan even after five months, Jet Airways’ top lenders, including SBI, are taking the debt-laden airline to bankruptcy courts.

 
The lenders are approaching the National Company Law Tribunal seeking resolution under the Insolvency and Bankruptcy Code. The tribunal will reportedly hear the lenders’ plea on 19 June.

 

 TECH  


India wants all WhatsApp messages to be digitally fingerprinted. Foreign e-commerce companies still barred from FDI in multi-brand retail.

 
The Origin of Messages: The Indian government has asked WhatsApp to ensure the traceability of every message shared on the messaging platform by tagging every message with a unique digital 'fingerprint.
 
 
The fingerprint, the government says, should enable officials to trace the origin of a message, to how many people the message was forwarded, and how many people read the message.
 
 
All this can be done without breaking WhatsApp’s policy of end-to-end encryption, officials opined.
 
 
WhatsApp, the most popular messaging platform in India, began drawing the government’s ire after a spate of lynchings in 2018 that were sparked by rumours of child kidnapping on the Facebook-owned app.
 
 
Tightening the Strings: In his first meeting with senior executives of top e-commerce and IT companies since the election, Piyush Goyal reportedly said that the government will not allow multi-brand retail by foreign e-commerce companies.
 
 
The companies could only be agnostic platforms, the Commerce and Industry Minister said
 
 
This follows the tightened FDI rules for e-commerce companies that were introduced in December 2018. These rules placed several restrictions on platforms like Amazon and Walmart-owned Flipkart.
 
  
 ECONOMY 
 
 
The slowing economy is hitting graduates’ and post-graduates’ job prospects. Diversifying crop production could help mitigate the effects of climate change in India.
 
 
Doldrums Ahead: With the aspect of jobless growth and the economy losing steam in general, unemployment is on the rise. How is this affecting the job prospects of the country’s educated workforce?
 
 
The situation looks grim for graduates and post-graduates, who are struggling to find jobs in this economy. This has led to a growing trend of post-graduate delivery agents or cab drivers, adding to the already-rife underemployment in the country. 
 
 
On the other hand, for digitally-skilled CxO-level jobseekers the hiring environment is more or less still healthy. The same goes for some sectors like healthcare, hospitality and tourism, and for specialists, provided they engage in re-skilling.
 
 
Diversity is Our Strength: Researchers at Columbia University studied the effects of climate change on five major crops – finger millet, maize, pearl millet, sorghum and rice. They found that millet, sorghum and maize are more resilient to turbulent weather conditions while rice yields dip significantly during extreme weather.
 
 
The five crops constitute the vast majority of grain production in India, and rice makes up 75% of supply in the June-September monsoon season.
 
 
The researchers concluded that over-reliance on rice will negatively impact India’s food security as the consequences of climate change catch up with humanity. Diversifying crop production to focus more on climate change-resistant crops like millet, sorghum and maize will thus ensure greater food security in the long run.
 
 
 TRADE 

 
Economic tensions between India and the US are escalating. A chance to re-invigorate EU-India relations. And why is the US in a fight with everybody?
 
 
Trade War Blues: India has responded to the US revoking its special trade status by raising tariffs on 28 US products worth around $240m.
 
 
The Trump administration had previously revoked India’s special status under the Generalised System of Preferences (GSP) programme, a move that hit $6bn worth of Indian goods.
 
 
India-US trade has increased seven-fold since 2001 to over $140bn. The $240m-worth tariffs slapped by India suggest that the move is largely symbolic, meant to send a message before President Trump and PM Modi meet at the G20 summit this month.
 
 
However, with a substantial trade surplus and slowing economic growth, India is playing a high-risk game as it has more to lose if the conflict escalates into a full-blown trade war.
 
 
Bright Side?: Every cloud has a silver lining, though. Even as economic ties between India and the US deteriorate, there is a ripening opportunity for India and the European Union (EU) to boost bilateral and economic ties.
 
 
The EU is unhappy with Washington for its obsession with tariffs, not to mention its statements and stance on NATO, the Paris Agreement and the Iran Nuclear Deal. As ties with the US sour, both India and the EU stand to benefit by boosting relations, especially through stepping up efforts to finalise a free trade agreement. 
 
 
Food for thought: The US has weaponised its economic arsenal. Under Trump, it has transformed its economic hegemony into a means to impose its will and score diplomatic points. Its recent threat of tariffs against Mexico to stem the tide of illegal immigrants epitomises this. As do its tariff wars against Canada, the EU – and now India. While the US-China trade war is a different ball game altogether, any observer of today’s international scene will be flabbergasted – what exactly does Trump’s USA aim to achieve by trying to ignite conflict with long-standing allies?
 
 
 OIL 
 

Saudi Arabia is cutting oil output and will ask OPEC to do the same. Shale oil production continues to rocket.
 
 
When Oil Goes Low...: When OPEC, led by Saudi Arabia, and its allies met in December last year, it decided to curb output by 1.2 million barrels a day.
 
 
Six months later, Saudi is again cutting its oil output and when the oil-exporting group meets again in the coming weeks, Riyadh will push other members to do the same.
 
 
Growing economic uncertainty, decreasing demand from China, breakdown in Iran-US relations, and increasing tensions in Middle-east (two oil tankers were attacked in the Gulf of Oman recently) have sent oil prices on a spin.
 
 
... Shale Goes High: In recent months, historic levels of shale oil production catapulted the US to become the top crude oil producer in the world, ahead of Russia and the Middle-eastern countries. And the rate of shale drilling shows no sign of abating.
 
 
According to the US Energy Information Administration, oil production in the Permian basin – an oil-rich region in the US states of Texas and New Mexico that contains half of all oil rigs in the country - is set to hit a new record in July.
 
 
All in all, US oil output is expected to rise by about 70,000 barrels per day (bpd) to a record 8.52 million bpd.  
 
 
(Don't want to miss out on these End Of Day Wrap Ups?  Subscribe Now to our WhatsApp Feed and get the day's Top Business stories straight on your favourite messaging app.)