US China's EV Tussle, Vedanta Diving Into Electronics, Ai Impact On Jobs Globally, IKEA On Expansion Mode, Etc.

Market Briefs

Main Briefs

Impact of US Tariff Hikes on Chinese Goods:

Background:

• The US imposed significant tariff hikes on various Chinese imports, including EV batteries, computer chips, and medical products, escalating the trade tension between the two countries.

Potential Outcome for India:

• Global Trade Research Initiative (GTRI) suggests that India might become a dumping ground for Chinese products like Electric Vehicles (EVs) and batteries.

• With the US and EU reducing imports of EVs from China, there's a risk of China redirecting these products to India to avoid losses.

Vigilance Needed:

• GTRI emphasises the importance of India remaining vigilant to prevent dumping of Chinese goods into its market amidst these developments.

US Tariff Hikes:

• The US plans to quadruple duties on EVs to over 100% by 2024 and double tariffs on semiconductors to 50% by 2025.

• These actions are driven by concerns over unfair Chinese trade practices and their impact on American economic security.

Opportunities for India:

• Despite the risk of dumping, higher duties on certain Chinese products like face masks, medical gloves, and natural graphite present opportunities for India.

• India could enhance its production and exports of these items to capitalise on the US market.

Challenges and Considerations:

• However, India may not benefit from export advantages in sectors like EVs and semiconductors, as it is a net importer of these products.

• The Indian government has recently announced policies to attract investments in EVs, aiming to reduce reliance on imports and boost domestic manufacturing.

Strategic Response:

• With the US and EU actively seeking to reduce dependence on China, India may need to formulate its own strategy to address its trade relationship with China.

• GTRI's founder, Ajay Srivastava, suggests that India should consider measures to mitigate stagnant exports and rising imports from China.

Vedanta's New Direction: Diving into Electronics:

Background:

• Vedanta Ltd, a mining and metals giant founded by Anil Agarwal, is evolving its business model.

• Recent restructuring and debt management efforts have boosted investor confidence, leading to a surge in share prices.

Electronics Venture:

• Vedanta aims to invest $20 billion across sectors, including electronics.

• Previous plans for a semiconductor plant with Foxconn fell through due to financial concerns.

• Now, Vedanta has fully acquired AvanStrate, a Japanese display glass maker, to enter the electronics market.

Strategic Moves:

• Vedanta plans to build a display glass plant in Gujarat, capitalising on AvanStrate's technology.

• Partnerships with Taiwan-based Innolux Corporation and submissions to the Ministry of Electronics and IT indicate serious intent.

• Akarsh K. Hebbar, Agarwal's son-in-law and Global Managing Director for Vedanta's Semiconductor and Display Glass business, spearheads this new venture.

Business Synergy:

• Electronics manufacturing complements Vedanta's core metals and mining operations.

• Display glass demand in India is high, offering a lucrative market for local production.

• Hebbar envisions Vedanta Display Ltd (VDL) contributing to India's electronics self-sufficiency and fostering growth in small-scale enterprises.

Future Prospects:

• Vedanta aims to create an integrated upstream-to-downstream electronics major in India.

• Expansion into electronics aligns with India's push for manufacturing growth, particularly in electric mobility and renewable energy sectors.

• Agarwal sees natural resources and technology as pivotal for India's development, positioning Vedanta strategically for the future.

IMF Urges Swift Action to Address AI Impact on Jobs:

AI's Profound Impact on Labor Market:

• IMF Managing Director Kristalina Georgieva warns of AI's potential to disrupt up to 60% of jobs in advanced economies and 40% globally within two years.

• Urgent preparation is necessary to navigate these changes and prevent societal inequalities.

Georgieva's Warning and Call to Action:

• Georgieva likens AI's impact to a tsunami, emphasising the need for swift readiness among both individuals and businesses.

• While AI promises productivity gains, mismanagement could exacerbate misinformation and widen societal disparities.

Economic Resilience Amid Uncertainties:

• Despite recent shocks like the global pandemic and the Ukraine conflict, Georgieva notes the economy's resilience.

• The world is not in a global recession, but challenges persist, including climate change and debt issues in developing nations.

Acknowledgment of Societal Concerns:

• Protesters' demands for climate action and debt relief are acknowledged, highlighting the need for comprehensive responses to global challenges.

Swiss National Bank's Perspective:

• Thomas Jordan, Swiss National Bank Chairman, discusses Switzerland's inflation progress.

• Inflation has remained within the SNB's target range for 11 consecutive months, with April's rate at 1.4%.

• Jordan expresses optimism about future inflation stability despite significant uncertainties.

Briefs, You Can’t Miss:

1. IKEA India expands its reach to Delhi-NCR by partnering with Rhenus to establish a warehouse near Gurugram.

2. Finance Minister Sitharaman warns of potential challenges from the unchecked growth of retail F&O trading.

3. A survey by LocalCircles reveals that 56% of online shoppers perceive ratings on e-commerce sites to be positively biassed.

4. HDFC Bank discloses that 6-7% of its total annual expenses are allocated to technology.

5. Moody's predicts a moderation in the profitability of NBFCs due to higher borrowing costs.

6. Tata Power aims for a 20% market share in the PM Surya Ghar Muft Bijli Yojana, according to its CEO.

7. The semiconductor industry's boom fuels demand for tech roles.

8. Tata Play now offers Amazon Prime benefits and allows customers to customise their OTT bundles.

9. India and Iran signed a 10-year contract for the management of Chabahar port, enhancing regional connectivity.

10. Prime Minister Modi declares assets worth Rs 3.02 crore in his poll affidavit, including no house or car ownership.

World Briefs

• Uber acquired Foodpanda's Taiwan unit from Delivery Hero for $950 million in cash, expanding its presence in the food delivery market.

• Blisce launches a new fund dedicated to climate technology, aiming to raise approximately $162 million to support green initiatives.

• OPEC maintains its forecast for global oil demand, expecting a growth of 2.2 million barrels per day in 2024.

• The US imposes higher tariffs on Chinese chips and cars, citing concerns over economic security.

• Lightbox Jewelry announces permanent price reductions for lab-grown diamonds, with prices starting at $500 per carat.

• Kia unveils the revamped EV6 electric vehicle featuring a larger battery, catering to the growing demand for electric cars.

• Xiaomi progresses with its plans to introduce a Tesla-like SUV, achieving its initial goals in the electric vehicle market.

AI Briefs

• OpenAI introduces updates to its conversational AI model, ChatGPT, including a new app and interface featuring a user-facing personality represented by a giant black dot.

• Kyle Vogt, former founder and CEO of Cruise, launches a VC-backed robotics startup focusing on household chores.

• Pee Safe, a hygiene brand, unveils a chatbot aimed at increasing awareness and assisting shoppers.

• OpenAI unveils GPT-4o 'omni' model, now powering ChatGPT, offering enhanced capabilities.

• Gemini on Android becomes more versatile, integrating with Gmail, Messages, YouTube, and other platforms.

• Google emphasises AI-generated video at Google I/O 2024, highlighting its commitment to advancing this technology.

Company Of The Day

Company Name: ZETA

• Founder: Bhavin Turakhia, Ramki Gaddipati

• Year Of Foundation:  Apr 3, 2015

• Headquarter: San Ramon, California, United States

• Industry:

  Zeta empowers issuers to launch API-ready, cloud-native next-gen credit card & payment programs that include processing, core banking, etc.

• Why Is It in the News?

  Zeta helps run HDFC Bank's PayZapp mobile app. Gadipatti mentioned that this was a big learning opportunity for the fintech startup because they took on the job when the bank was having some trouble with digital banking, according to banking regulators.