India will not join RCEP. Price cap on medicines costing less than Rs 5 per dose may be done away with. Tencent buys 10% stake in Policybazaar. AngelList launches India-focussed fund. Google could be changing its political ad policy. Banks to not charge savings account customers NEFT transaction fee, says RBI.
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So it is settled. After over six years of negotiations, India has decided to not join the Regional Comprehensive Economic Partnership (RCEP) while the other 15 countries in the bloc have decided to move ahead with the pact. In the end, negotiating RCEP was always going to be complicated business.
A Tiger and A Dragon Walk Into A Bar: ...And neither of them agreed with the other on anything, ever. India felt there were “significant outstanding issues, which remain unresolved” (ie, that armada of Chinese imports waiting impatiently to cross the Bay of Bengal) and that the deal finally drafted did not adhere to “the basic spirit and the agreed guiding principles of RCEP”. Prime Minister Narendra Modi declared India's departure at the 3rd RCEP Summit in Bangkok on Monday.
There are both supporters and critics of the government's decision. Supporters of the pull-out argue that being party to RCEP would have led to a flood of cheap, mass-produced Chinese imports in the Indian market. Such an import surge would have, besides increasing India's $50bn+ trade deficit with China, hurt local small businesses and traders. Moreover, the reluctance of other countries to move the base year from 2014, inadequate commitment to the services sector, and requirement to do away with agricultural tariffs would have negatively impacted the Indian economy, which is already in a fragile state, this side opines. ToI
The opposite side decries Delhi's decision. Staying out of RCEP, they say, would hurt India's chances to strike deals or secure concessions with individual countries in the RCEP tent. It would also mean that India would miss out on a huge trade bloc that includes every major economy in the region, isolating it in the global supply chain - that too, even as China secures the leading position, trade-wise and strategic implications-wise. This side also laments what they characterise as India's suspicions of free trade deals whilst failing to reform and increase its own economy's competitiveness. CFR
The What: As per sources, India's National List of Essential Medicines (NLEM) is being updated and this could result in medicines costing less than Rs 5 per dose being taken out of price control.
What Would This Mean?: If the move goes through, drugmakers will be able to raise the prices of these drugs by up to 10% every year.
Good to Know: While around 19% of the INR1.36tr domestic drug market is under price control, 4-5% of it comprises drugs priced under INR5 per dose. Moneycontrol
Go Digital: In a bid to promote digital transactions in the country, the Reserve Bank of India has mandated banks to not charge savings bank account customers any NEFT transaction fees.
While several major banks, including State Bank of India (SBI), ICICI Bank, Axis Bank, HDFC Bank, and YES Bank, currently do not charge for online NEFT transactions, some like Bank of Baroda and Union Bank of India charge INR2.25, excluding the GST, for such transfers up to INR10,000.
Zooming Out: The RBI had earlier this year waived the charges it levied on banks for transactions through NEFT and RTGS and asked the banks to pass on the benefit to the customers. Firstpost
India's Got Angel: US-based online platform for startups, angel investors, and job-seekers, AngelList has rolled out an India-focussed venture and angel fund that will allow individuals to raise small pools of capital and deploy them in a span of 6-12 months.
The fund is structured in such a way that fund managers make 15% of the profits, while AngelList will charge a 5% fee. AngelList will also manage legal and regulatory aspects of raising funds and investing it. ET Tech
Chinese conglomerate Tencent Holdings has reportedly acquired a minority stake in Indian online insurance aggregator Policybazaar.com, valuing it at $1.5bn.
Other companies in Tencent’s India portfolio include messaging app WeChat, which has a minor presence in India, besides unicorns Ola, BYJU’s and Swiggy. Livemint
In a bid to encourage the startup ecosystem in the country, the Ministry of Corporate Affairs is planing to allow startups to issue 50% of their paid-up capital as sweat equity and extend the period of exemptions from other regulatory filings for up to 10 years instead of five now.
They will be exempted for 10 years from a rule that bars private companies from raising deposits exceeding 100% of their paid-up share capital. ET Tech
Much Needed: Finance Minister Nirmala Sitharaman yesterday announced the creation of an alternative investment fund (AIF) worth NR25,000cr to help revive over 1,600 stalled middle and low-income RERA registered housing projects across top cities in the country.
Projects declared as non-performing assets and those which are undergoing insolvency at the National Company Law Tribunal (NCLT) to be considered for financing. However, those which have already got orders from NCLT for liquidation will not be considered.
The government will put in INR10,000cr in this AIF while SBI and LIC would provide INR15,000cr, taking the total size. The move is likely to bring momentous relief to homebuyers and businesses across the country. Moneycontrol
Six-Pack Ads: Uber is branching out (again). After announcing a foray into fintech, the ride-hailing giant is reportedly eyeing the ads business.
TechCrunch recently spotted a job listing by Uber Eats for an Ads Lead “to lead the team and efforts responsible for creating a new ads business that enables eaters to discover new foods and restaurants to grow their customer base”.
Selling ad space on its food delivery app to restaurants could help the company improve margins on Eats. It could also help increase overall revenue and cut losses at a time when Uber's share price is faltering (after its uninspiring IPO) and its post-IPO stock lock-up period expires. TechCrunch
What Will Google Decide?: Recently, Twitter announced that it would ban all political ads on its platform. This followed the very heated debate surrounding Facebook’s reluctance to fact-check political ads on its platform, something that drew the ire of US Congress members, who voiced the same when Mark Zuckerberg testified on Capitol Hill.
Now, Google too is apparently mulling changing its policies on political advertisements. It is unknown if the tech giant is considering an all-out ban like Twitter’s or an advanced filter option. A decision was expected this week but it was reportedly delayed. Hindu BusinessLine
What Makes an Ad an Ad?: Twitter has banned political ads. Google might follow suit. People are calling on Facebook to do the same. And everyone seems to have an opinion on the issue. And if such a ban is enacted, the central question is a simple-yet-complicated one: What criteria define a political ad? Here’s a perspective.
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