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Latest News Today: India to Restart Trade Deal Talks with the EU, Offers Concessions on Wine and Automobile Imports

Professor of Financial Economics and Part-time Value Investor, Transfin.
Jan 3, 2020 12:15 PM 6 min read

Swiggy seeks higher commissions from restaurants and customers. RBI announces third round of 'Operation Twist' on January, 6th. India offers concessions on wine and automobile imports to restart trade deal talks with the EU.




Ratan Tata moves SC against NCLAT order holding him guilty of prejudicial and oppressive acts.

Pride and Prejudice: Former Chairman of Tata Group, Ratan Tata has moved the Supreme Court (SC) against a National Company Law Appellate Tribunal (NCLAT) order that reinstated Cyrus Mistry as the Executive Chairman of the Tata Group and which held him guilty of prejudicial and oppressive acts. 


"NCLAT has held me guilty without any factual or legal foundation," Ratan Tata said. "Findings of the NCLAT are wrong, erroneous, contrary to the record of the case and requires consideration by SC. NCLAT judgement blatantly indulges in propagating a selective narrative where relevant facts and record have been glossed over," he added. CNBC TV18

Bosch India to lay off 10% of total workforce.

Bad News: In the backdrop of the ongoing slump in the auto sector, world's largest auto-part supplier Bosch announced that it will cut 10% of the total workforce of 3,700 white-collar employees of its India workforce in the next four years. Business Today


Extra Crunch: OYO has grown into one of India’s most valuable private companies and aims to be the world’s largest hotel chain by 2023. But as per a New York Times report, at least part of OYO's rise in India was built on practices that raise questions about the health of its business, according to financial filings, court documents and interviews with 20 current and former employees, as well as others familiar with the start-up’s operations. Read the report here for the full scoop. 



Swiggy seeks higher commissions from restaurants. 

Money Matters: In heightened focus to monetise its core food ordering business, food delivery platform Swiggy has begun rising its commissions from restaurants in regions where its service is nearing maturity, coupled with actively pushing partners to advertise on its platform. 


It has also increased delivery fees it charges the customer, to control its losses on each delivery. ET Tech


Trouble Brewing in the Soup Bowl?: On the other end of this spectrum are the restaurants, which feel that they might have to stop using these services altogether if there is an increase. BS



RBI announces third round of 'Operation Twist' on January, 6th.

Twist and Roll: The Reserve Bank of India has announced the third round of 'Operation Twist' on January, 6th, wherein it will undertake simultaneous purchase and sale of government securities under the special open market operation (OMO).


The concept is similar to Operation Twist used by the Federal Reserve in 2011-2012 where it had swapped short-term treasury securities for longer-term government debt, which reduced the gap between two- and 10-year yields. The move is expected to stimulate private sector borrowing, as well as dampen term premia (the difference between the 10-year government bond yield and the repo rate) to aid the centre’s borrowing programme by making it cheaper. Livemint

TRAI tariff amendments might force broadcasters to revise pricing for channels.

More the Merrier: The Telecom Regulatory Authority (TRAI) of India is set to amend its tariff order of February 2019, a move which could prompt broadcasters to revise pricing for channels, forcing them to make more channels free-to-air. 


As per experts, broadcasters like Sony Pictures Networks India and Star India could be impacted more as their bouquet offerings were at discounts of 35-54%. In fact, Star India, which was expected to come out with its new channel pack on Thursday, has now deferred the same, reported sources. 


According to TRAI’s amendments, which will come to force from March 1, a broadcaster cannot price channels in a bouquet such that the maximum retail price (MRP) of all a-la-carte channels in the bouquet is more than 1.5x the price of the bouquet. The telecom regulator also laid down a second condition that the MRP of any a-la-carte channel cannot be more than 3x the average price of any channel in that particular bouquet. A deep dive into the matter here



India offers concessions on wine and automobile imports to restart trade deal talks with the EU.

Renewed Vigour: To restart formal talks on a free trade deal, India has signalled its willingness to cut tariffs on wines and automobiles from the European Union (EU). But the latter has maintained that for any deal to materialise, concerns on investment protection will have to be addressed.


Background: Talks on the Broad-based Trade and Investment Agreement (BTIA) between the EU and India began way back in 2007. Despite multiple rounds of negotiations, talks hit a wall in 2013 and were stalled indefinitely.


However, in 2019, after New Delhi decided to not join the Regional Comprehensive Economic Partnership (RCEP), India approached the EU again to restart talks on the BTIA.


So, What's the Problem?: Brussels is apprehensive about India's commitment to protect European investors. As per the Indian government's Bilateral Investment Treaty (BIT) framework (issued in 2015), Brussels objects to the clause saying that if an investor-state dispute were to arise, a foreign investor can seek international arbitration only after all domestic legal routes have been exhausted. India contends this clause is needed to reduce chances of hefty fines from international tribunals; the EU fears investors' interests will be hurt by India's legal system, which it reportedly regards as slow and corrupt.


Is the BTIA Dead?: Not quite. Recently, the US imposed high import duties on some European products, including whiskies and wines. These are items that are much sought-after in India's growing middle-class. Ergo, New Delhi's offer of concessions on alcohol. BS

Government set to impose restrictions on non-essential imports, targetting China.

Barriers Across the Himalayas: India is set to impose stricter quality restrictions on 371 items by March. The proposed rules, to be framed in coordination with the Bureau of Indian Standards, will comprise non-essential items like toys, plastic goods, sports items and furniture. They are aimed primarily at narrowing the trade deficit with China.


Non-essential imports from China reportedly amount to  4trn ($56bn) a year.


Out of the 371 items to be affected, 111 come under the Department of Chemicals and Petrochemicals, 68 pertain to the Department of Heavy Industries, 62 come under the Ministry of Electronics and Information and Technology, 61 under the Industry Department, 44 under the Steel Ministry and 25 under the Telecom Department. Livemint



Oil prices rise after US strike kills senior Iranian military leader Qassem Suleimani. ONGC awarded all seven oil and gas blocks in latest OALP auction.

High Alert: Oil rose sharply today on the news that the US had carried out an air strike in Iraq that killed senior Iranian military leader Qassem Suleimani.


Following reports of the strike in the media, Brent crude rallied about 4%, the S&P 500 stock futures fell more than 0.6%, and major stock benchmarks in Asia climbed down. Meanwhile, gold, Bitcoin and the Japanese Yen (which tends to rally when investors are seeking safety) rose. WSJ


Seven Blocks Richer: All seven oil and gas blocks that were on offer in the fourth round of Open Acreage Licensing Policy (OALP) were awarded by the government to Oil and Natural Gas Corporation (ONGC) on Thursday. 


Of the seven blocks, five are located in Madhya Pradesh and one block each in Rajasthan and West Bengal.


The current round added 18,510 square kilometre to India's total exploitation area. The fifth round will involve another 20,000 square kilometre. Read more details here.


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