Understand Commodity Market, India China Ev Policy, Flipkart and Kirana Stores, Paytm, Etc

Market Briefs

Main Briefs

The IMF Analyses How Commodity Markets Adapt to Shocks:

• Commodity markets are prone to shocks, ranging from sector or country-specific to macro factors. The International Monetary Fund (IMF) explored how rapidly these markets adjust to shocks, considering the recent volatility in commodity prices.

• Volatility Increase:

  Between 2020-23, all major commodity baskets’ prices have turned more volatile. This volatility destabilised inflation, making fiscal and monetary policy management more difficult, especially for low-income and commodity-exporting countries.

  Factors Contributing to Volatility:

• Geoeconomic fragmentation: Countries are wea

  ponizing their supply chains, leading others to reduce their dependence on sources they regard as unreliable.

• Climate change: Havoc caused by agriculture and shipping due to falling water levels in crucial waterways.

• Geopolitics: Recent Israel-Iran tensions spiked crude prices and disrupted shipping lines.

• Concentration of Production and Consumption: Most commodity markets are highly concentrated in their production and consumption, making them prone to shocks.

Supply Elasticity:

• Metals tend to have the lowest elasticity, while agricultural commodities have the highest.

• Supply of metals doesn’t adjust much with rising prices, whereas food output does increase.

• Ability to substitute one crop for another helps adjust to price shocks.

India's EV Policy May Exclude Chinese Firms over National Security Concerns:

FDI Policy and Concerns:

• India’s FDI rules restrict land-border countries from investing directly, leading to a discouragement of investments from China.

• The EV policy requires a minimum investment and a three-year timeline for setting up manufacturing facilities to qualify for the lower import duty rate of 15 percent.

FDI Policy Regarding China:

• Investment proposals from Chinese or land-border nations will face detailed scrutiny and can only proceed through the government route.

Exclusion of Chinese Companies:

• Chinese companies like BYD may not provide the required FDI commitment, leading to their exclusion from the policy.

• India's reluctance to grant concessions to Chinese EV makers is significant, considering Beijing's strong position in the sector.

Flipkart's Hemant Badri to Spearhead Quick Commerce, Focuses on Kirana Tie-Ups:

Hemant Badri to Lead Quick Commerce:

• Hemant Badri, SVP and Group Head of Supply Chain, will spearhead Flipkart’s quick commerce ambitions.

• Badri has the necessary skills for Flipkart’s quick commerce play.

Flipkart's Unique Strategy:

• Flipkart will partner with existing kirana stores for its quick commerce business, avoiding the setup of new dark stores.

• Kirana stores will be equipped with technology to meet delivery demands quickly.

Regulatory and Strategic Approach:

• Quick commerce companies need a capital investor due to FDI norms.

• Flipkart confirmed Badri’s appointment but refused to comment on its quick commerce plans.

Growing Importance of Quick Commerce:

• Quick commerce is expected to represent 20% of the market by the end of FY29.

• Quick commerce has become a $5 billion annual sales channel in just about three years, driven by Indians' spending habits.

Briefs, You Can’t Miss:

1. RIL Achieves Milestone: First Indian Company to Surpass Rs 1 Lakh Crore Pre-Tax Profit.

2. Sebi Discovers Adani Offshore Investors Violating Disclosure Rules, According to Report.

3. Vijay Shekhar Sharma Announces Completion of Merchant Customer Migration to New UPI IDs from Paytm.

4. IndusInd Bank, on Pilot Basis, Implements Central Bank's e-Rupee Payments Program with Farmers.

5. The Derma Co, Skincare Brand under Honasa (Parent Company of Mamaearth), Reaches Rs 500 Crore Annual Revenue Rate.

6. Uttar Pradesh Government Expands Industrial Land Bank to 25,000 Acres.

7. AIFs' Large Offshore Investor Base May Encounter Increased Restrictions.

8. Government Considers Extending PMSBY Claims Deadline for Informal Workers.

9. IRDAI Removes Age Restriction on Health Insurance Products.

10. Air India's Boeing 747 'Queen of the Skies' Embarks on Final Flight from Mumbai.

11. PM Ujjwala Scheme Aims to Provide Piped Gas to Every Household; Target Set for 12.5 Crore Connections by 2030.

12. Everest Denies Reports of Ban in Singapore and Hong Kong Due to Cancer-Causing Ingredients.

13. ONGC Plans June Drilling for India's First Geothermal Project in Ladakh.

World Briefs

• MUFG of Japan Considers Improved Offer for HDB Financial, Aims for Strategy Input.

• Iranian President Raisi and Pakistani PM Sharif Agree on Joint Efforts to Eradicate Terrorism After Tit-for-Tat Air Strikes.

• China Applauds Muizzu's Victory in Maldives Parliament Polls, Seeks to Strengthen Strategic Ties.

• Malaysia Introduces Incentives to Attract Global Tech Companies.

• Amazon Discontinues Drone Program in California, Plans Delivery Launch in Arizona Later This Year.

AI Briefs

• Apple's AI Momentum Grows with Reported Acquisition of France-Based Startup.

• Meta Teams Up with Device Makers Lenovo, Microsoft, and Asus as First Partners to Develop Devices Based on Meta Horizon OS.

Company Of The Day

Company Name: Flipkart

Founder: Binny Bansal, Sachin Bansal

Year Of Foundation: 2007

Headquarter: Bengaluru, Karnataka, India

Industry: Flipkart operates an online shopping website that offers a wide range of products and services to customers.

Why In News In India?

Flipkart plans to partner with local kirana stores for faster deliveries, avoiding the need for new dark stores by equipping kirana stores with technology.