Clashing Tiger, Fuming Dragon
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Jio-FB: The Supply Chain businesstoday.in Game Changer Redefined May 17, 2020 `100 OC Clashing Tiger, Fuming Dragon The Modi GovernMenT TiGhTens iTs Grip on invesTMenTs FroM China, siGnallinG an adversarial eConoMiC relaTionship ThaT will require deFT ManoeuvrinG To sTay ahead From the Editor http://www.businesstoday.in Editor-in-Chief: aroon purie When Fear Feeds on Fear Group Editorial Director: Raj Chengappa Editor: Rajeev Dubey Group Creative Editor: Nilanjan Das Group Photo Editor: Bandeep Singh Executive Editor: anand adhikari ear feeds on fear. There’s no greater fear in world economies today than Deputy Editors: ajita Shashidhar, Naveen Kumar (Money Today) China, as countries grapple with the fallout of the pandemic that origi- special projects and events Fnated in the Chinese city of Wuhan. Was coronavirus a bio-weapon? Was Senior Editor: anup Jayaram it allowed to spread intentionally? Was it meant to destruct the world’s biggest correspondents economies so that China could gain? Is China taking advantage of the global stock Senior Editors: p.B. Jayakumar, Nevin John, Joe C. Mathew, E. Kumar Sharma, market crash to shore up equity in strategic firms? Those are just some of the ques- Dipak Mondal, Manu Kaushik, Sumant Banerji Associate Editor: Nidhi Singal, tions leaders the world over are struggling to answer. Senior Assistant Editor: Sonal Khetarpal Most have already made precautionary moves to block any misadventure. research Late March, the European Union (EU) was the first to flag to member states that Principal Research Analysts: Niti Kiran, Shivani Sharma healthcare equipment firms and research establishments may be takeover targets copy desk via the FDI route, asking them to set up FDI screening mechanisms. On April 8, Senior Editor: Mahesh Jagota Senior Associate Editor: Kaveri Nandan Germany tightened rules protecting local firms from unsolicited takeovers by Chief Copy Editor: Gadadhar padhy non-EU (read China) investors. France, Italy, and Spain followed with similar Copy Editor: aprajita Sharma rules. So did the UK, Australia, Canada – even the US. photography Deputy Chief Photographers: Shekhar Ghosh, So, when the Chinese government-owned People’s Bank of China (PBoC) Rachit Goswami, Yasir Iqbal triggered a notification to stock exchage regulator SEBI for surpassing 1 per cent Principal Photographer: Rajwant Singh Rawat equity holding in one of India’s biggest and most respected housing finance com- art Deputy Art Director: amit Sharma panies, HDFC – which also owns the largest private bank HDFC Bank – it natu- Assistant Art Director: Raj Verma rally set alarm bells ringing from SEBI, right up to the Ministry of Finance. PBoC production already owned 0.8 per cent of HDFC. As HDFC’s stock value crashed 32 per cent, Chief of Production: Harish aggarwal Senior Production Coordinator: Narendra Singh it had only acquired an additional 0.2 per cent, a move that would be considered Associate Chief Coordinator: Rajesh Verma smart, coming from a portfolio investor. But with global moves to block such library deals, the seed of suspicion had already been sown. Assistant Librarian: Satbir Singh Since India’s stock market crashed a hefty 23.4 per cent since the first corona- Publishing Director: Manoj Sharma Associate Publisher (Impact): anil Fernandes virus case was detected in Kerala, listed firms were particularly vulnerable. Was impact team this a precursor to more such moves? Within days of PBoC’s acquisition, the Cen- Senior General Manager: Jitendra Lad (West) tre moved in swiftly, amending FDI norms that mandate explicit government ap- General Managers: Upendra Singh (Bangalore) Kaushiky Gangulie (East) proval for FDI from contiguous countries. Since the rule already existed for Ban- gladesh and Pakistan, the aim was at none other than China. SEBI is doing its own Marketing: Vivek Malhotra, Group Chief Marketing Officer groundwork to establish whether foreign portfolio investors such as PBoC also Newsstand Sales: D.V.S. Rama Rao, Chief General Manager; Deepak Bhatt, Senior General Manager need to be brought under a similar rule. (National Sales); Vipin Bagga, General Manager (Operations); Rajeev Gandhi, Deputy General The Chinese Embassy issued a scathing statement the following day, call- Manager (North), Syed asif Saleem, Regional Sales Manager ing the move discriminatory and violating WTO norms. But India has stood its (West), S. paramasivam, Deputy Regional Sales Manager (South), piyush Ranjan Das, Senior Sales Manager (East) ground. Yet, this is just the beginning. Regulatory and a possible consumer back- lash against Chinese investments, companies and products in India, coupled with the coming face-off to present itself as an alternative to China for manufacturing, Vol. 29, No. 10, for the fortnight May 4-17, 2020. will pit the two rivals against each other more often than not. Released on May 4, 2020. Editorial Office: India Today Mediaplex, FC 8, Sector 16/A, Film City, Noida-201301; Tel: India is wooing 300-odd foreign firms pursuing production in the country as 0120-4807100; Fax: 0120-4807150 Advertising Office (Gurgaon): A1-A2, Enkay Centre, Ground Floor, V.N. Commercial Complex, Udyog Vihar, Phase 5, Gurgaon-122001; Tel: 0124- an alternative to China in sectors such as mobiles, electronics, medical devices, 4948400; Fax: 0124-4030919; Mumbai: 1201, 12th Floor, Tower 2 A, One Indiabulls Centre (Jupiter Mills), S.B. Marg, Lower Parel (West), Mumbai-400013; Tel: 022-66063355; Fax: 022- textiles and synthetic fabric. Last September, corporate tax for new manufactur- 66063226; Chennai: 5th Floor, Main Building No. 443, Guna Complex, Anna Salai, Teynampet, Chennai-600018; Tel: 044-28478525; Fax: 044-24361942; Bangalore: 202-204 ers was slashed to 17 per cent, lower than in any country in South-east Asia. Richmond Towers, 2nd Floor, 12, Richmond Road, Bangalore-560025; Tel: 080-22212448, 080-30374106; Fax: 080-22218335; Kolkata: 52, J.L. Road, 4th floor, Kolkata-700071; Tel: The next target is reducing the nearly $58-billion trade deficit with China and 033-22825398, 033-22827726, 033-22821922; Fax: 033-22827254; Hyderabad: 6-3-885/7/B, Raj Bhawan Road, Somajiguda, Hyderabad-500082; Tel: 040-23401657, 040-23400479; Hong Kong. The government plans to reduce import dependence on China in sec- Ahmedabad: 2nd Floor, 2C, Surya Rath Building, Behind White House, Panchwati, Off: C.G. Road, Ahmedabad-380006; Tel: 079-6560393, 079-6560929; Fax: 079-6565293; Kochi: tors such as electrical equipment, active pharma ingredients (drug parks policy Karakkatt Road, Kochi-682016; Tel: 0484-2377057, 0484-2377058; Fax: 0484-370962 has been announced), optical fibre, flat rolled iron, boilers, tiles, sanitary ware, Subscriptions: For assistance contact Customer Care, India Today Group, C-9, Sector 10, Noida (U.P.) - 201301; Tel: 0120-2479900 from Delhi & Faridabad; 0120-2479900 (Monday- leather, suitcases, paper boards, silk, umbrellas and toys. Friday, 10 am-6 pm) from Rest of India; Toll free no: 1800 1800 100 (from BSNL/ MTNL lines); Fax: 0120-4078080; E-mail: [email protected] In the cover story, Sumant Banerji, Rukmini Rao and Niti Kiran examine what Sales: General Manager Sales, Living Media India Ltd, C-9, Sector 10, Noida (U.P.) - 201301; India’s move means for Chinese investments, companies and trade. Tel: 0120-4019500; Fax: 0120-4019664 © 1998 Living Media India Ltd. All rights reserved throughout the world. Reproduction in any manner is prohibited. Printed & published by Manoj Sharma on behalf of Living Media India Limited. Printed at Thomson Press India Limited, 18-35, Milestone, Delhi-Mathura Road, Faridabad-121007, (Haryana). Published at K-9, Connaught Circus, New Delhi-110 001. Editor: Rajeev Dubey Business Today does not take responsibility for returning unsolicited publication material. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Delhi/New Delhi only. For reprint rights and syndication enquiries, contact [email protected] [email protected] or call +91-120-4078000 www.syndicationstoday.in @rajeevdubey 14 Corporate May 17, 2020 Cover by NilaNjaN das The Game Changer Volume 29, Number 10 With both sides tight-lipped, the nuts and bolts of jio- No Exemption Facebook tie-up remain from Pain shrouded in mystery Pg. 30 6 Hunt for Magic Potion The Point Pg. 36 A Full-blown Crisis Mark Zuckerberg, Reinvention The devastating impact of corona- Ceo, Facebook Time virus on the economy is becoming Pg. 42 increasingly clear. Here is what high-frequency data show Survival of the Fittest Pg. 48 8 The Not So Mukesh ambani, 78 Happy Face of IT New Investments CMd, Ril Pg. 52 Slip in FY20 FY20 ended with new Network investments of `11.9 lakh crore; The Booby Trap this is much lower than the Pg. 56 Aditya Puri’s `13.1 lakh crore in FY19 Second Innings 74 HdFC Bank’s Aditya Puri, Funding Disaster who is known for skillfully Relief optimising time, has Pg. 62 “enjoyable plans” for his 10 Management retirement life Uphill Battle No Full Stops Pg. 66 Food Subsidy Falls; How india inc’s business Bad News for FCI continuity plans are being The Centre’s food subsidy bill overhauled to tide over Interview/ falls 10 per cent in FY20 the coronavirus crisis Nitin Gadkari, Union Minister for Road Transport and Highways Pg. 72 businesstoday.in A M sTaY CoNNeCTed WiTH us oN www.facebook.com/BusinessToday@BT_india 82 18 Best Advice I Ever Got An Feature From time to time, you will see pages titled “An Impact “You are the custodian Feature” or “Advertorial” in Business Today. This is no As INdIA tIGhteNs FdI Norms, ChINese FIrms ANd INvestmeNts mAy FACe different from an advertisement and the magazine’s editorial of the culture of the reGulAtory ANd CoNsumer bACklAsh. the FrICtIoN betweeN AsIAN staff is not involved in its creation in any way. organisation” ILLUSTRATION BY RAJ VER ILLUSTRATION GIANts Could be the beGINNING oF AN AdversArIAl ChAPter IN trAde Ramesh iyer 4 Business Today 17 May 2020 17 May 2020 Business Today 5 14 Corporate May 17, 2020 Cover by NilaNjaN das The Game Changer Volume 29, Number 10 With both sides tight-lipped, the nuts and bolts of jio- No Exemption Facebook tie-up remain from Pain shrouded in mystery Pg.