is behind us, and the Union Budget, with expectations running high for it to deliver the economy out of the morass, is a few days away. Just four weeks into New Year 2020, and it is already looking like an eventful, nay momentous one, as far as world of business is concerned. Here are five reasons for it.
Global goliaths can be gobbled up in India:
Indian business history is replete with examples of global behemoths trampling or gobbling local competitors. Think soft drinks
(Coca-Cola buying Parle’s five leading soft drinks
brands), electronics (the Japanese and Koreans virtually pushing Indian brands out of the market), cars (Tata Motors
waging a lonely battle against the might of Japanese and Korean carmakers) or consumer expendables (Anglo-Dutch Unilever’s Indian subsidiary buying Tata’s fast moving consumer goods business in Lakme, Tata Oil Mills). You get the drift.
Though it is being billed as the making of a duopoly after the third-ranked player was acquired by the second ranked, perhaps in a rare instance, homegrown firm Zomato bought American Uber’s Indian food delivery business, Uber Eats, in an all-stock deal last week. Though not in the same league as Didi Chuxing buying Uber’s main ride-hailing business in China lock, stock and barrel in 2016, the Uber Eats’ acquisition by Zomato is perhaps an indicator of Indian businesses’ growing confidence in their own models and the ability to compete and win against global biggies in its backyard.
Beginning of the gender fight in family-owned businesses: When one of Murugappa Group heirs, Valli Arunachalam, came out in the open against the family’s male-dominated board for denying her a board seat in the group’s holding company Ambadi Investments, she raised the flag for gender equality in family-run businesses. Though it is still early days in what could be a prolonged intra-family battle, Arunachalam’s move is a welcome development because most family-run big businesses in the country are conservative and patriarchal, and often relegate female heirs to the peripheries of the business, allowing them into the sanctum sanctorum only in the absence of a male heir.
Open like this!:
It doesn’t sound like a big deal, but one can’t remember the last time a sector as regimented as coal — the bedrock of power and many a core industry —and a virtual monopoly of a state-owned firm, Coal India
in this case, was completely thrown open by the government for all manner of people to come in when it cleared an ordinance on commercial coal mining earlier this month. Though they were liberalised sometime back, sectors such as insurance, banking, aviation, retail and even ecommerce still carry restrictions related to either foreign-capital, ownership or control. But not coal. Not on nationality, end-use, market restriction on who, how much and at what price can you sell. True, new projects will take time to fructify, and funding the venture will remain a challenge given coal’s pariah status with many a marquee global investor.
Ignominy of a foreign investor: Whatever his reasons or compulsions, Union Minister Piyush Goyal’s comments on Amazon, a big foreign investor, not doing the country “any favour” by committing another $1 billion was a first of sorts. Yes, governments are known to berate businesses, sectors and lobbies, but rarely do they single out individual firms for such public treatment, more so in a scenario where growth, investment and employment are all headed southwards. Whether one sees it is a mark of a rulebook-following government or a sign of nervousness depends on one’s perspective.
India, from a buoy to a sinker:
There was a time was when the country was the toast of the global community. It was feted as one of the global growth engines, bracketed in flattering acronyms and spoken as a counter-weight to China (remember Chindia!). That entire global aura somewhat dimmed when the International Monetary Fund
earlier this month said that its downward revision in global growth for 2019, 2020 and 2021 is owed largely to downward revisions for India.