Tiktok's Chinese owner to exit India; Amazon asks court to detain Future Group's Biyani

Farmers postponed a march to Parliament on February 1, when the Union Budget will be announced, following clashes with the police on January 26. Cairn Energy has begun to take steps to identify Indian assets overseas against which it can enforce the $1.2 billion award it won in a treaty arbitration case. The Shapoorji Pallonji Group has sought a two-year debt repayment moratorium as its construction business takes a beating in the coronavirus pandemic. Here is more on what happened this week.

Business Standard
29th January

  • The International Monetary Fund pegged contraction in India's economy at 8 per cent in the current financial year, higher than the 7.7-per cent decline projected by the government's advance estimates. The group, however, expects a growth rate of 11.5 per cent in the next financial year before slowing to 6.8 per cent in 2022-23, making India regain the tag of the fastest-growing large economy in the world in both the years.
  • Farmers postponed a march to Parliament on February 1, when the Union Budget will be announced, following clashes with the police on January 26 that left one person dead and hundreds injured. Tens of thousands of farmers have been camped on the outskirts of Delhi for two months to protest against reforms of the agriculture sector, which they say benefit big private buyers at the expense of growers.
  • The Shapoorji Pallonji Group has sought a two-year debt repayment moratorium as its mainstay construction business takes a beating in the coronavirus pandemic. The group’s total borrowings amount to more than Rs 25,000 crore. It has asked lenders to extend principal repayments by two years and regard outstanding interest as capitalised or converted to loans.
  • India has decided to retain its ban on video app TikTok and 58 other Chinese apps after reviewing responses from the companies on issues such as compliance and privacy. China’s Bytedance, which owns Tiktok, announced it will discontinue its India business as a result of the ban being continued.
  • Amazon.com Inc has requested the Delhi High court to block partner Future Group’s $3.4 billion deal to sell its retail assets and called for the Indian group’s CEO, Kishore Biyani, to be detained. In the U.S. giant’s latest effort to derail Future’s asset sale to Reliance Industries, it asked the court to enforce the decision of a Singapore arbitrator, which Amazon and Future had agreed to use in case of disputes.
  • Cairn Energy has begun to take steps to identify Indian assets overseas against which it can enforce the $1.2 billion award it won last month in a treaty arbitration case against the South Asian nation, Reuters reported. Cairn was awarded damages of over $1.2 billion plus interest and costs in the long-drawn tussle over a tax dispute and the Indian government is now liable to make this payment.
  • A ministerial group has recommended against merging BSNL and MTNL, the state-owned telecom companies battling losses, two decades after the idea was proposed. The group recommended last week that a merger is neither beneficial nor feasible, Business Standard reported. The government is considering integrating the two companies' resources and later phasing out MTNL.

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A few links for further reading

Hard path to growth

The signals for the economy are not positive: overall demand is yet to pick up; the share of total exports in India’s GDP is declining, and industrial output pattern remains worrying.

Small savings scheme

Investors breathed a sigh of relief when the government announced that interest rates on these instruments would not be revised for the fourth quarter of the calendar year.

Invest and emigrate

The great Indian dream of settling abroad is achievable if one has a few crores to invest. Rich nations offer a variety of investment options in a quid pro quo arrangement: immigrants get a better quality of life and revenue from them helps these countries’ finances. Wealthy Indians, troubled by polluted cities and the red tape holding up entrepreneurship, may want a quick ticket out of the country. Sanjay Kumar Singh lists a range of options: from a Canadian province’s investor programme to America’s US EB-5 plan.

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