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WHY CHINA A BIGGER SUSPECT THAN IMF-WB

Bangladesh has made it clear that it won’t take any further loan from Beijing while Nepal has also taken same stand

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The recent economic upheaval followed by the political disruption in Sri Lanka, has once again made China’s Belt and Road Initiative (BRI) the focus of debate whether it is beneficial or insensitive to the participating countries besides being a success or a failure.

Chinese President Xi Jinping launched the BRI with much fanfare and high promises and grandiose plans for the participating countries in 2013. It was considered to be a centrepiece of the Chinese foreign and trade policy.

As claimed by China, the BRI, earlier known as One Belt One Road (OBOR), is basically a global infrastructure development strategy to invest in nearly 150 countries and international organisations, around the globe.

The BRI formed a central component of Xi’s “Major Country Diplomacy” strategy, which calls for China to assume a greater leadership role for global affairs in accordance with its rising power and status. As of August, 149 countries were listed as having signed up to the BRI.

Xi originally announced the strategy as the “Silk Road Economic Belt” during an official visit to Kazakhstan in September 2013, referring to the proposed overland routes for road and rail transportation through landlocked Central Asia along the famed historical trade routes of the Western Regions; in addition to the “21st Century Maritime Silk Road”, referring to the Indo-Pacific sea routes through Southeast Asia to South Asia, the Middle East and Africa.

In fact, the BRI was also considered a grandiose plan to challenge the American hegemony over the global trade and diplomacy.

However, the recent events in Sri Lanka, with similar echoes being heard from Bangladesh, Nepal and Pakistan has led some China watchers to conclude that this is an indicator of the hit that the Chinese economy has taken during the Covid pandemic and the BRI appears to be under revaluation with recipient countries wary of the debt trap and its economic feasibility.

Let’s take a closer look at the original intent of the BRI, its expansion and its long and short-term impacts on the aid recipient countries and whether it has been a success or a failure and how the US could have countered it in a much better manner.

In his report in 2020, Rafiq Dossani, Director, RAND Centre for Asia Pacific Policy, opined that China’s strongest motive behind the BRI was its long-term economic security. The maritime routes of the BRI would have helped the relatively underdeveloped, landlocked areas of China such as Yunnan and Xinjiang provinces by linking them with ports in the more rapidly growing areas of Asia.

At the same time, the emerging land routes of the BRI were marked as an alternative to the South China Sea, through which most of China’s trade currently passes and which is becoming a zone of contestation between the US and China.

Dossani further explaining the reasons for the initial welcome of BRI opined that traditionally, many countries prefer to work with the World Bank and other multilateral lenders, which provide borrowers with good practices, while making significant funding available on a meritocratic rather than political basis.

But, he says further that from a developing country’s viewpoint, accessing the world’s spare capital has been difficult because of the risk entailed in many such investments. The Asian Development Bank estimates that Asian countries face an infrastructure investment gap of $459 billion a year.

This logic also explains the sentiments, which in the initial stages of the launch of the BRI seemed to be the main attractive reason for the BRI projects and Chinese funding. But nine years after its launch BRI seems to have lost its sheen, due to the economic meltdown in several countries, which borrowed heavily from China under the garb of infrastructure development, progress and prosperity.

Bangladesh Finance Minister A.H.M. Mustafa Kamal has publicly blamed economically unviable Chinese BRI projects for exacerbating economic crisis in Sri Lanka. He says that developing countries must think twice about taking more loans through BRI as global inflation and slowing growth add to the strains on indebted emerging markets.

In fact, Bangladesh has made it clear that it will not accept any further loans but only grants from Beijing. Nepal has also taken the same stand. Pakistan with some $53 billion being spent by Beijing under the aegis of BRI also faces the same fate.

China has also invested some $44 billion in Indonesia, $41 billion in Singapore, $39 billion in Russia, $33 billion in Saudi Arabia and $30 billion in Malaysia.

The cry against Chinese BRI is not limited only to Indian sub-continent alone as its reverberations can be heard in the stalled $4.7 billion railway project in Kenya, also. Five years since its launch, the project ends abruptly in an empty field, 200 miles from its destination in Uganda.

As conflicts between the US and China appear to mount, some experts have questioned the intentions of China’s BRI. It has been viewed as a debt trap for impoverished states and a means for China to expand its territorial control, but is it a reality? Is the US missing an opportunity to participate-in or initiate parallel activities?

BRI has been repeatedly labelled a debt trap and a power grab, and perhaps this seemed like a possible scenario. However, this concept has been denied by Deborah Brautigam, director of the China Africa Research Initiative at Johns Hopkins University. She has claimed to have found no evidence that Chinese banks over-lend or invest in loss-making projects to obtain a foothold in those countries, in one of her studies on Chinese lending to Africa.

Brautigam has also claimed that China is not engaging in debt-trap diplomacy. She has noted that in some countries the IMF has been labelled as being vulnerable. Also, Chinese loans were not responsible for pushing indebted countries above IMF debt sustainability limits, she adds.

On the other hand, it should be noted that not just impoverished nations, but East Asian and Europe countries have also been smitten by the BRI. Over 18 European Union member countries have joined the BRI and most of them have not been quite happy about it.

In fact, rather than decrying China, the US should engage in infrastructure lending to poor countries, and/or make it easier for multilateral banks to lend for such projects, reducing bureaucratic requirements. It should also initiate similar activities in under-developed or developing countries.

To better its image, China should improve transparency around BRI deals. The World Bank and other bodies have also called for increased transparency. This would go a long way in improving US and other countries’ understanding of Chinese intentions about the BRI. • IANS

(The author is a political commentator based in New Delhi.)

An aerial view of the Lower Sesan II hydroelectric power station at Sesan district of Stung Treng province in Cambodia. With a length of 6,500 metres, the 400-MW dam is the largest and the seventh one built by China in Cambodia.

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Tesla eyes India market as Elon Musk makes bold AI prediction

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In a recent X Spaces session with Nicolai Tangen, CEO of Norges Bank Investment Management, Tesla CEO Elon Musk emphasized the importance of electric vehicles (EVs) in India, stating that it’s a natural progression for every country to embrace them. Musk highlighted India’s status as the most populous country globally and stressed that electric cars should be accessible to Indian consumers like they are in other parts of the world.

Musk’s comments coincide with Tesla’s intensified efforts to expand its presence in the Indian market. Sources reveal that the state governments of Maharashtra and Gujarat have extended enticing land offers to Tesla for the establishment of a cutting-edge EV manufacturing plant. The proposed investment for this venture ranges between USD 2 billion to USD 3 billion, demonstrating Tesla’s commitment to both domestic and international markets.

This move aligns with India’s new EV policy, which aims to attract investments from global EV manufacturers and promote the adoption of advanced EV technology among Indian consumers. The policy emphasizes the importance of domestic value addition (DVA) and sets specific localization targets for manufacturers establishing operations in India.

To incentivize investment, the government has introduced measures such as customs duty exemptions and import quotas for EVs based on the level of investment made by manufacturers. These initiatives aim to position India as a preferred destination for EV manufacturing and contribute to the country’s Make in India initiative.

In anticipation of these developments, Tesla plans to dispatch a team of experts to explore suitable locations across India for the proposed manufacturing facility. Musk’s previous statement about visiting India in 2024 further underscores the company’s eagerness to enter the Indian market and collaborate with local stakeholders.

Tesla’s expansion into India represents a significant step forward in the global EV landscape and underscores the company’s commitment to sustainable transportation solutions. With India poised to become a key market for electric vehicles, Tesla’s entry is expected to drive innovation and accelerate the adoption of EVs in the country.

As the electric vehicle market continues to evolve, Tesla’s entry into India holds the potential to reshape the automotive industry and contribute to India’s transition towards a greener and more sustainable future.

Tesla’s entry into the Indian market not only signifies a pivotal moment for the country’s automotive industry but also presents an opportunity for Tesla to capitalize on India’s growing demand for electric vehicles. With the Indian government’s focus on promoting clean energy initiatives and reducing carbon emissions, Tesla’s electric vehicles align perfectly with India’s sustainable development goals.

Moreover, Tesla’s presence in India is expected to stimulate job creation and economic growth, particularly in the manufacturing sector. The establishment of a state-of-the-art manufacturing plant will not only provide employment opportunities for local residents but also foster the development of ancillary industries and supply chains.

In addition to manufacturing, Tesla’s entry into India is poised to catalyze advancements in EV infrastructure and technology. As Tesla vehicles become more accessible to Indian consumers, there will be a corresponding need for charging infrastructure and support services. This presents opportunities for collaboration with local businesses and government agencies to build a robust EV ecosystem.

Furthermore, Tesla’s entry into India could spur competition and innovation in the domestic automotive market, encouraging other manufacturers to invest in electric vehicle technology. This competition could lead to advancements in battery technology, vehicle performance, and affordability, ultimately benefiting consumers.

Overall, Tesla’s decision to establish a manufacturing presence in India reflects the country’s growing importance in the global automotive industry and underscores India’s potential as a key market for electric vehicles. As Tesla’s footprint expands across the country, its impact on India’s economy, environment, and technological landscape is expected to be profound.

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Air India, BIAL Partner to Create South India’s Top Aviation Hub

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Air India and Tata Group airlines will partner with BIAL to improve airport services and connectivity at Bengaluru’s Kempegowda International Airport, including setting up an exclusive lounge for premium passengers.

Air India and Bangalore International Airport Limited (BIAL) have entered into an agreement aimed at bolstering Bengaluru’s status as a premier aviation hub for southern India. The collaboration seeks to enhance air travel connectivity to and from India over the next five years.

Under the agreement, Air India, along with other Tata Group airlines such as AIX and Vistara, will work closely with BIAL to improve international connectivity, operational efficiency, and passenger experience at Kempegowda International Airport, Bengaluru (KIAB or BLR airport). This includes plans to strengthen the group’s presence at the airport and establish a dedicated domestic lounge for premium and frequent travelers of Tata Group airlines.

Furthermore, Air India has signed a memorandum of understanding (MOU) with the Government of Karnataka to develop maintenance, repair, and overhaul (MRO) facilities at the Bengaluru airport. This partnership aims to stimulate the MRO ecosystem and create over 1,200 new job opportunities in the state.

Campbell Wilson, CEO and MD of Air India, emphasized the importance of airline-airport synergy in enhancing customer experience and operational efficiency. He expressed enthusiasm for strengthening Air India’s relationship with BIAL and expanding its presence at the airport, as well as establishing a major MRO center.

Hari Marar, MD and CEO of Bangalore International Airport Limited, highlighted the BLR airport’s commitment to becoming the international gateway in Southern and Central India. He stated that the collaboration with Air India aligns with the Ministry of Civil Aviation’s vision of developing Indian airports as hubs and aims to enhance the passenger experience. Marar also expressed ambitions to capture a significant share of long-haul routes from Bengaluru Airport over the next five years.

In related news, Air India announced the appointment of Jayaraj Shanmugam as its Head of Global Airport Operations, effective April 15. Shanmugam, who previously served as the chief operating officer (COO) at BIAL, brings extensive experience to his new role.

The collaboration between Air India and BIAL represents a significant milestone in the transformation of Bengaluru into a key aviation hub in the region. By leveraging each other’s strengths and resources, the partnership aims to not only enhance air connectivity but also contribute to the economic growth of Karnataka by generating job opportunities through the establishment of MRO facilities.

Jayaraj Shanmugam’s appointment as the Head of Global Airport Operations further solidifies Air India’s commitment to optimizing its airport operations and providing a seamless travel experience for passengers. His extensive experience in airport management, coupled with his previous role at BIAL, positions him well to drive operational excellence and efficiency within the airline.

As the aviation industry continues to evolve, alliances between airlines and airports are becoming increasingly vital to meet the growing demands of travelers and enhance overall competitiveness. The strategic collaboration between Air India and BIAL sets a precedent for future partnerships in the aviation sector, emphasizing the importance of cooperation and synergy to achieve common goals.

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March sees strong growth in Indian pharma market, up by 9.5%

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The Indian pharmaceutical market (IPM) experienced a notable 9.5 percent increase in sales in March, reflecting robust value growth across various therapy segments, except for respiratory. According to data from research firm Pharmarack, all therapies demonstrated positive value growth, contributing to the overall expansion of the market.

Sheetal Sapale, Vice President-Commercial at Pharmarack, noted that while many pharmaceutical companies showed double-digit value growth, unit growth remained a challenge. The growth in sales during March was primarily driven by value growth and new introductions, particularly in the anti-diabetic segment.

Several factors contributed to the uptick in sales, including new product introductions and patent expiries. For instance, there were multiple launches in the hematinic market following the loss of exclusivity rights for iron supplement Orofer FCM in October 2023. Additionally, patent expiries for drugs like Linagliptin and Dulaglutide further fueled competition in the anti-diabetic segment.

In March, Alkem emerged as one of the few companies reporting positive unit and value growth, with a 15.1 percent increase in value and an 11.3 percent increase in units sold. Other key players such as Cadilla, Fourrts, and Natco Pharma also witnessed double-digit value and unit growth during the month.

The top-selling medicine brands in March included Glaxo Smith Kline’s Augmentin and USV’s Glycomet GP, with Augmentin achieving sales of Rs 73 crore. Despite facing challenges in unit growth, Augmentin reported a 10 percent increase in value sales. Mankind’s Manforce condom brand retained its position as the third top-selling brand, despite negative unit and value growth.

Cipla’s Foracort inhaler maintained its fourth position in the respiratory segment, with sales totaling Rs 50 crore. Abbott’s Type 2 diabetes/weight management drug Rybelsus demonstrated remarkable growth, with a double-digit value growth rate of 7 percent and a staggering 75 percent increase in units sold in March.

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McDonald’s buys all Israeli franchise restaurants amid boycotts

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Aljazeera said that McDonald’s announced it will purchase its 30-year-old Israel franchise from Alonyal Ltd., taking back control of 225 outlets that employ more than 5,000 people. After US fast-food business Alonyal announced that it would be giving free meals to the Israeli soldiers in response to the October 7 bombing by Palestinian group Hamas, there were protests and boycotts. While McDonald’s is a global corporation, its franchises are typically locally owned and operate independently. Its CEO, Chris Kempczinski, said previously that the company had seen “meaningful business impact” in several markets in the Middle East and some outside the region due to the Israel-Hamas conflict, as per Aljazeera.

“For more than 30 years, Alonyal Limited has been proud to bring the Golden Arches to Israel and serve our communities,” Omri Padan, CEO and owner of Alonyal, said in a statement on Thursday. According to Aljazeera, McDonald’s added that it “remains committed to the Israeli market and to ensuring a positive employee and customer experience in the market going forward.” Following the transaction’s completion in the coming months, McDonald’s will assume ownership of Alonyal’s outlets and operations, maintaining its current workforce. However, the terms of the transaction were not disclosed by the companies involved. In February, Kempczinski said that the war had had a “disheartening” effect on sales in Middle Eastern countries and other Muslim-majority nations such as Malaysia and Indonesia. “So long as this conflict, this war, is going on, we’re not expecting to see any significant improvement in this,” Kempczinski said in a conference call. “It’s a human tragedy, what’s going on, and I think that does weigh on brands like ours.”

During October–December, sales growth for the fast-food chain’s Middle East, China, and India division was only 0.7 percent, significantly lower than market projections of 5.5 percent. This decline follows calls for a McDonald’s boycott by customers in Muslim countries, prompted by Alonyal’s announcement. Consequently, franchisees in nations like Egypt, Jordan, and Saudi Arabia distanced themselves from the donations, collectively pledging millions of dollars in aid to Palestinians in Gaza.

While Chicago-based McDonald’s is known as one of the United States’ most iconic brands, most of its restaurants worldwide are locally owned and operated. Another prominent Western fast-food chain, Starbucks, has also faced boycott campaigns due to its perceived pro-Israeli stance and alleged financial ties to Israel. CEO Laxman Narasimhan told journalists in February that Starbucks saw a “significant impact on traffic and sales” in the Middle East but also in the US, where protesters campaigned against the Seattle-based company, calling for it to take a stand against Israel.

Domino’s, a US-based pizza maker with franchises around the world, also faced blowback after posts on social media claimed without evidence that it had also given free food to Israeli soldiers. The brand’s same-store sales dipped by 8.9 percent in Asia in the second half of 2023, mainly because consumers in Malaysia associated it with the US, an Israeli ally, a company official said.

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Disney CEO targets password-sharing, following Netflix

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Disney CEO Bob Iger has revealed plans to tackle password-sharing on the company’s streaming platform, set to commence in June. Iger stressed in a CNBC interview the importance of consolidating the streaming industry, with the initiative aimed at boosting subscriber growth and improving profitability. He articulated aspirations for achieving double-digit margins for the business.

This move mirrors actions taken by streaming giant Netflix, which experienced a substantial surge in subscribers after cracking down on password-sharing, surpassing Wall Street’s expectations by adding nearly 22 million subscribers in the latter half of last year.

Iger’s announcement closely follows a proxy battle against Disney’s activist investors, including Nelson Peltz, who had criticized Disney’s performance in the streaming-television sector. Reflecting on the outcome of the proxy vote, Iger expressed satisfaction with the resounding endorsement of the board’s strategies, particularly concerning CEO succession. Moreover, Iger has also hinted at ongoing plans regarding partnerships for ESPN.

The victory in the proxy battle strengthens Iger’s position as Disney endeavors to revitalize its film and television franchises, achieve profitability in its streaming division, and establish partnerships for ESPN’s digital expansion.

Last year, Netflix expanded its crackdown on password-sharing to over 100 countries, extending beyond the United States. As part of its efforts to address market saturation and explore new revenue avenues, the platform implemented restrictions on password-sharing and introduced a subscription option supported by ads.

Emails were sent out to customers in 103 countries and territories, including key markets such as the United States, Britain, France, Germany, Australia, Singapore, Mexico, and Brazil, in May 2023. These emails reiterated Netflix’s policy that accounts should only be used within a single household.

To ease the transition, Netflix provides paying customers with the option to add an extra member from outside their household for a supplementary monthly fee. In the United States, this fee amounts to $8 (Rs 660). Members are also given the ability to transfer a person’s profile to maintain their viewing history and personalized recommendations, ensuring a seamless experience.

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India’s Ayurveda market to reach Rs 1.2 trillion by FY28

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The Ayurveda product market in India is poised for substantial growth, with projections indicating a remarkable increase in market value to Rs 1,20,660 crore ($16.27 billion) by FY28 from the current Rs 57,450 crore ($7 billion), according to a study conducted by Ayurveda tech startup NirogStreet.

The surge in the Ayurveda product market can be attributed to several factors, including the escalating demand for natural and herbal remedies both domestically and internationally. Additionally, the rise in the number of Ayurvedic medical practitioners, coupled with government initiatives and the emergence of new entrepreneurs in the sector, has further fueled the market’s expansion.

NirogStreet’s survey revealed that the overall market for Ayurveda products and services is expected to grow at a Compound Annual Growth Rate (CAGR) of 15 percent from FY23 to FY28. Specifically, the product and service sectors are anticipated to witness growth rates of 16 percent and 12.4 percent, respectively, during this period.

The survey also shed light on the Ayurvedic manufacturing landscape in India, estimating its value at Rs 89,750 crore ($11 billion) in FY22. This figure encompasses the value of exports, amounting to around Rs 40,900 crore ($5 billion), with imports estimated at Rs 8,600 crore ($1 billion).

Participation in the survey was significant, with approximately 7,500 manufacturers from 10 states, including Uttar Pradesh, Bihar, Madhya Pradesh, Delhi, Haryana, Rajasthan, Punjab, Maharashtra, Jammu and Kashmir, and Kerala.

At a recent CII AYUSH Conclave, Padmashri Vaidya Rajesh Kotecha, Secretary, Ministry of AYUSH, emphasized the importance of positioning AYUSH products in global markets and fostering innovation within the ecosystem. He highlighted that the AYUSH sector has witnessed remarkable growth, reaching $24 billion in a span of 10 years.

In light of this exponential growth trajectory, NirogStreet underscored the significant potential of the Ayurveda product market to become a key contributor to India’s economy.

The recent surge in the Ayurveda product market underscores a broader global trend towards holistic and natural wellness solutions. As consumers increasingly prioritize health and well-being, Ayurveda’s ancient wisdom and emphasis on holistic healing are gaining traction worldwide.

India’s rich heritage in Ayurveda positions it as a global leader in this burgeoning industry. The country’s vast array of medicinal herbs, traditional knowledge, and skilled practitioners serve as key assets in driving the growth of the Ayurveda sector. However, amidst the promising growth prospects, challenges persist, including the need for stringent quality control measures, standardization of products, and greater awareness about Ayurveda’s efficacy. Addressing these challenges will be crucial in ensuring the sustainable growth of the industry and maintaining consumer trust.

The endorsement of Ayurveda by government authorities and the proactive role of industry stakeholders in promoting innovation and research are essential steps towards realizing the full potential of the sector. In conclusion, the projected growth of India’s Ayurveda product market signifies a transformative shift towards holistic wellness and natural remedies. With concerted efforts from both public and private sectors, the Ayurveda industry is poised to emerge as a significant driver of economic growth while enriching lives with its time-tested principles of well-being.

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