Welcome to Top of the Morning by Mint, your weekday newscast that brings you five major stories from the world of business. It's Tuesday, April 16, 2024. My name is Nelson John. Let's get started:
Indian stock markets fell by over one per cent for the second consecutive day on Monday, weighed down by rising tensions in the Middle East and resulting negative investor sentiment.
India is in for some good news, especially for our farmers. After a tough year with less-than-ideal rain and the ongoing scorching summer, it looks like India is on track for a better-than-average monsoon season this year. The India Meteorological Department (IMD) anticipates that the fading El Niño – a weather phenomenon – will transition to neutral by June and possibly to La Niña conditions by late summer, promising higher rainfall. This could bump up our monsoon rainfall to 106% of the long-term average of 87 cm, which is above normal. This forecast is a relief considering the dry spell last year linked to El Niño, which reduced rainfall by 6% and nudged up inflation. Historically, when La Niña follows El Niño, India tends to see more rain. However, this could also result in uneven distribution of rainfall, meaning floods in some places. Mint’s Puja Das and Arshdeep Kaur report on the latest IMD forecasts.
Tata Electronics has sealed a deal with Elon Musk’s EV manufacturer Tesla to produce crucial components for the car company. This partnership marks a significant boost for Tata in the electronics manufacturing space. The Tata Group company is also gearing up to set up a new facility dedicated to crafting essential parts like printed circuit board assemblies for Tesla vehicles. Interestingly, Tesla decided to go with Tata Electronics over its usual global partners like Foxconn and Jabil Inc. This choice seems to hinge on a couple of key factors: Tata’s aggressive expansion in semiconductor fabrication and its strong stance in securing government incentives in India. This strategy is a win for Tesla too, as it aligns with Indian policies that lower import duties for EV makers ramping up local production. These policies require that EVs achieve 50% local sourcing within five years to enjoy these benefits. Mint’s autos correspondent Alisha Sachdev reports on a development crucial for India’s EV and manufacturing landscape.
Once the most valued Indian startup, Byju’s is going through its most turbulent phase yet. Now, another exit has shook the edtech company. Arjun Mohan stepped down as CEO of Byju's India after just seven months, handing the reins back to the company's founder, Byju Raveendran. Initially brought in to cut costs and reorganise operations, Mohan leaves behind a business that's noticeably scaled back. It's been a rough patch for Byju's, especially during the January-March quarter, which usually sees the bulk of its sales. However, this period turned out to be one of its worst, company insiders told Mint’s startup correspondents Priyamvada C and Sneha Shah. Debt has been a major issue. Reports suggest that Byju's debt has climbed to more than 200 million dollars in India and another 200-250 million dollars in the U.S. The company is also supposed to pay 40 million dollars quarterly to bondholders—a commitment that has sparked a legal battle as Byju's disputes these claims. However, an executive close to Raveendran told Priyamvada and Sneha that the debts are much lower and that the recent fundraising efforts should cover most of what they owe.
The geopolitical situation in West Asia is volatile again. After Iran’s drone attack on Israel, the region is on the brink of a war. And when West Asia - a part of the Middle East - sneezes, economies around the world become prone to catching a cold. That is because of the fossil fuel reserves the area sits on. Rising tensions in the region could spell trouble for the Indian economy, with analysts warning that geopolitical uncertainties might drive up energy and commodity prices. This could fuel inflation and increase the government's spending on fertiliser subsidies, which could force the government to rethink some of its budget plans after the elections. In the budget laid out in February, Finance Minister Nirmala Sitharaman planned for a 13 per cent cut in fertiliser subsidies and a 5 per cent increase in excise duty collections from the petroleum sector. But with oil prices creeping up towards 90 dollars a barrel—and possibly hitting the 100 dollar mark soon—those numbers might need a second look. Higher oil prices mean India's import bill could balloon, given it imports about 85 per cent of its energy needs. Mint’s senior editor Gireesh Chandra Prasad and energy correspondent Rituraj Baruah explore the consequences of the ongoing conflict in West Asia, for the Indian economy and for the government’s promises in its interim budget.
In the early 1960s, India was in search of its national bird. Renowned ornithologist, the late Salim Ali, championed the Great Indian Bustard, a towering bird reminiscent of an ostrich, commonly found in the arid regions of Rajasthan and Gujarat. However, due to concerns about potential misspellings of its name, the government ultimately chose the peacock as the national bird in 1963. Fast forward nearly six decades, and the Great Indian Bustard is now facing extinction , primarily due to the expansion of India's renewable energy sector. The bird's natural desert habitat overlaps significantly with areas being used for wind and solar energy projects—energy sources that are pivotal in India's efforts to reduce its dependence on fossil fuels.
In the past decade, the desert has been crisscrossed with countless kilometres of high and low tension overhead wires needed to transmit power from renewable sources. Unfortunately, these wires have become death traps for the bustard and other avian species, leading to numerous collisions. Mint’s Sumant Banerji writes about the dwindling numbers of the bustard and also talks about the ongoing legal battle to save one of India’s most iconic bird species, in today’s Long Story. Ironically, the future of these majestic birds hangs in a delicate balance against the backdrop of India's push for a diversified energy future.
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Show notes:
IMD forecasts above-normal monsoon this year as El Nino flips over
Musk taps Tata Electronics to make electronics parts for India-made Teslas
Byju's India CEO Arjun Mohan steps down after just seven months
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