INDIA NEWS
Sept 16-30, 2021 - Vol 2, Issue 6
MAKE IN INDIA
MAKE IN INDIA
As world economies restart their engines in a bid to regain lost ground due to the Covid-19 pandemic, India too shows signs of economic buoyancy and promise. India’s Make in India initiative holds a key to the global economic revival, something that should interest Australian government ministries, corporate sector, entrepreneurs, institutions seeking R&D collaborations and Australia Inc in general, among others. India assumes greater importance as several major world economies including American, Japanese, German, British and South Korean look to move out and diversify their businesses from China. India has jumped to 63rd rank in the World Bank’s Ease of Development 2020 report, and has also been ranked as the 9th largest recipient of Foreign Direct Investment destination in 2019 by the World Investment Report 2020 of the United Nations Conference on Trade and Development (UNCTAD).
A Review of India’s Credit Ecosystem mainly through the strength of India’s young population and an aspiring middle-income class that is slowly moving away from a saving mentality and are now willing to take loans for instant gratifications based on their lifestyles.
By Strategic Investment Research Unit (SIRU)
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redit industry in India is witnessing historic changes owing to several reforms undertaken by the government in the latter part of the last decade. India’s domestic credit growth has averaged at 15.1% from March 2000 to March 2021. The number of people willing and able to take loans from formal channels is at a neverbefore-seen level. This is driven
The report throws light on the key economic indicators ranging from unemployment to inflation which have remained well within the target level despite the pandemic. More modern indicators such as internet connectivity and the number of people availing of bank services have also taken dramatic strides. The report highlights the opportunity in Tier 3 and Tier 4 regions of India and talks about how rural India is finally coming at par with the urban areas. The number of people willing and able to take loans from formal channels is at a never-beforeseen level. The flagship digitisation initiatives have propelled the growth of Digital payments which grew to almost 40% in the pandemic year and are predicted to surpass cash payments by 2025.
This uptick in digital payments vis-à-vis cash payments is the driving factor augmenting formal credit consumption whilst furthering financial inclusion contemporaneously. Further, with embedded finance and utility apps turning their strategies to become super-apps, another trend that can be watched closely and to which retail credit promotion and elevation can be attributed. Fintechs and NBFCs have carved out their market share by targeting customers who were otherwise unable to borrow. This has brought a whole new section of customers, and this market is far from being saturated. NBFCs have leveraged deep understanding of consumer preferences and differentiated business to grow as a preferred choice, especially in unorganised markets. The report finally discusses the effect of the pandemic on the economy, especially on the credit industry, and the resilience the country has shown under its able leadership and empowered private sector.
Blockchain: Powering India’s Technological transformation
By Vivek Sigchi
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f you are reading this article, chances are that you’ve already heard about the widely popular ‘blockchain technology’. The term has gained massive traction since Satoshi Nakamoto (father of Bitcoin), published his famous white paper on a cryptography mailing list describing a digital currency that would allow secure, peer-to-peer transactions without the involvement of any middleman, whether that be the government, financial system or a company. Although Satoshi disappeared soon after he gave the world its first cryptocurrency, the technology has only scaled up with new innovations and better use cases. In 2020 itself, the global blockchain market size was estimated at $3 bn and is expected to reach $39.7 bn by 2025, growing at an impressive CAGR of 67.3% during the said period. That said, the technology is also being received well in India. Many enterprises are trying to explore the technology by
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incorporating it in their daily business processes and a number of new start-ups are becoming a part of the big picture. In India, blockchain solutions have found the most takers in banking, financial services and insurance industry. The public sector has also been actively using this technology for use cases such as land title registry, vehicle lifecycle management, farm insurance and electronic health record management. Furthermore, India ranks second in terms of crypto adoption worldwide behind Vietnam, but ahead of countries such as the US, UK, and China, according to the 2021 Global Crypto Adoption Index by blockchain data platform Chainalysis. So, the rising adoption of this technology is evident but the main question that remains for us to answer is - how long before we fully exploit the power of this disruptor and can India position itself as the biggest technology hub adopting this technology? As per a report released by
NASSCOM, titled ‘NASSCOM Avasant India Blockchain Report 2019’, majority of the mid and large service providers have less than 5% of blockchain projects in India, which is low when compared to their projects in other geographies such as North America and Europe. Even among blockchain start-ups, while venture capital investments worldwide were as high as $5.6 bn, India was able to attract only 0.2% of them. Furthermore, India accounted only for about 2% of all the blockchain startups, globally. This shows that while the technology is being well received, it is still at a very nascent stage. There are many industries for which this concept is yet to be understood. Lack of knowledge and understanding are the primary challenges hindering the adoption and growth of blockchain technology. There are also misconceptions that blockchain will be replacing the current systems, which is not true. Unlike other technologies, which have the potential to
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Textile Machinery Industry in India By Strategic Investment Research Unit (SIRU)
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$2.5 bn textile machine industry which is growing at 5% currently reflects on the growing strength of this subsegment in the textiles value chain in India. A strong textile engineering industry that can grow, compete, and export would be able to provide support to the rising Indian textile industry, adding vibrancy and competitiveness. There are about 3,250 companies involved in the manufacturing of textile machineries, accessories, and trading of equipment in India. The industry not only caters to rising domestic demand but also has the potential to establish India as an export hub for textile machinery with spinning machines representing the largest export opportunity. A major component of the textile machinery industry in India thrives on the global partnerships that companies in India have forged with their global counterparts be it in Germany,
deliver completely new services to citizens and other stakeholders alike, blockchain has the potential to revamp currently existing processes to unlock new sources of efficiency and value. Thus, the nascency of this idea presents India with huge opportunities to expand this market if it is able to tackle the bottlenecks well. Now at this stage, many of us might be wondering why we should even expand and explore this idea. There are other sectors and challenges that require addressal. The current pandemic
Italy, or Japan. As per the 60th Annual Report by the Textile Machinery Manufacturing Association (TMMA), the Asian region will account for more than 90% of the total textile machinery market share, and in order to expand its technical horizons, many textile machine companies in the country are joining hands with their western counterparts to produce technologically advanced machines.
has also brought in dozens of other problems making it more difficult to implement this technology. So why should we? There are several factors driving blockchain adoption in India, one of them being digitisation. Over the past decade, India has successfully created foundational digital infrastructure envisaged to enable private sector applications running on top of it such as Aadhaar, UPI, e-Sign and Digilocker along with digitally enabled tax governance networks like GSTN or digitally
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