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EXPLAINED : THE GLOBAL SEMICONDUCTOR CRISIS

The 2020–21 global chip shortage is a constant crisis in which the demand for integrated circuits (generally known as semiconductor chips) is greater than the supply, influencing more than 169 industries and has led to major scarcities and queues amongst consumers for graphics cards, video game consoles, cars and other products that require semiconductors.

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Imagine yourself living in this world devoid of cars, smartphones and video game consoles. Pathetic, isn’t it? What if that becomes a reality soon? Yes, with demand for microchips exceeding their supply, more than 169 industries have been severely affected which has resulted in acute shortage and long queues amongst consumers for graphics cards, video game consoles, cars and other products that require semiconductors. Who would have ever even thought how significant these minute chips can be in today’s modern world!

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INTRODUCTION

Technically, Semiconductors, sometimes referred to as integrated circuits (ICs) or microchips, are made from pure elements, typically silicon or germanium, or compounds such as gallium arsenide. These tiny objects perform a lot of functions such as powering displays and transferring data. These are the backbone of many established & growing industries like Digital Devices, Automobile, Communication, Banking, Defense, E-commerce, AI and what not.

REASONS THAT GAVE BIRTH TO THE GLOBAL SCARCITY

Covid-19 Pandemic

Can you cite any issue in recent times where our unwelcome companion was not a reason for causing it? No, right? Coronavirus has been degrading human health as well as hitting numerous industries, some of which are bleeding funds to remain alive. The industries were shut down and consequently the production was hit, resulting in depletion in the stock of the semiconductors. What actually happened is, the pandemic disturbed the equation of Demand and Supply in the world.

After imposing nationwide lockdowns in many countries, the demand of many products, manufacturing of which have direct involvement of the electronic industry or have its indirect participation, dwindled whereas demand for electronic devices like smartphones, laptops, etc. was booming because of work from home and leisure activities. Owing to this, the supply of microchips were routed towards the production of these devices. Now since the economy is reviving and all of sudden every industry is demanding semiconductors, the equation hasn’t adopted the new normal yet.

US-China Trade War

The world witnessed the tussle between Donald Trump and Xi Jinping last year and the restrictions imposed by the US (leading chip manufacturing) over Chinese semiconductor manufacturers, for instance the biggest Chinese microchips manufacturer, Semiconductors Manufacturing Company Limited, affected the global supply chains.

Dependence on Taiwan

Taiwan Semiconductor Manufacturing Corporation (TSMC) is the world’s largest chipmaker having around 56% share and customers ranging from Qualcomm to Apple. According to a Bloomberg report, making chips is a complex process that typically takes more than three months and requires large factories, dust-free rooms, very expensive machines, molten tin and lasers as prerequisites. However, in 2021, Taiwan faced its worst drought in the last 50 years, which caused problems among chip manufacturers that use large amounts of ultra-pure water to clean their factories. For example, TSMC’s facilities used more than 63,000 tons of water a day.

INDUSTRIES IMPACTED DUE TO THE SHORTAGE

The crisis came at a time when chip inventories were already running low across most sectors around the globe. Input shortages and low inventories will likely lead to production cuts and delayed shipments in the September 2021 quarter and even later. These shortages are expected to persist in Q2-Q3 of FY22 and supplies are expected to improve in a staggered manner and eventually may come down to normal by FY23-end, according to Raghunandhan N L of Emkay Global.

This semiconductor shortage impacts a whopping 169 industries in some way – from steel products and concrete manufacturing to industries that manufacture ACs and refrigerators to breweries. Even soap manufacturing is adversely affected by the chip crisis. Some major industries that are likely to be the worst hit are:

Graphics cards and gaming PCs

The chip crisis made it extremely difficult to acquire a new graphics card, and a simultaneous increase in cryptocurrency mining in 2021 further aggravated the situation. Finding gaming PC parts became more difficult and even more expensive. Moreover, such PCs rely on either AMD or Nvidia to make their dedicated graphics, both of those companies upgraded to popular new models that are now almost impossible to find.

Video game consoles

What did you do while locked in your home? Play games and chill? Well, you are also responsible for the crisis. As the release of the ninth generation of video game consoles coincided with the pandemic, demand skyrocketed. On the other hand, both major gaming giants, Sony and Microsoft warned that short supply of the PlayStation 5 and Xbox Series X and S respectively will continue till 2022. As if that wasn’t enough, then came another stroke for the stricken – both Sony and Microsoft use AMD chips manufactured by TSMC in their ninth-generation consoles, which puts extra strain on the supply chain. Now the scenario is, people are reselling the consoles on websites like eBay for 50% to 100% more than their retail price.

Cars and Automobiles

An average modern car needs between 1,400 and 1,500 chips, some even up to 3,000. Cars account for 15% of global chip production. At the start of the pandemic, car manufacturers wrongly predicted that sales would plummet and thus, canceled chip orders. To cut short, they were unprepared to meet demand. Whereas, chip manufacturers had more prior commitments from the tech sector, which further decreased capacity for car chips.

Afterall, what could have possibly gone wrong other than the pandemic? Well, Ford parked thousands of unfinished vehicles at Kentucky Speedway as the company waited for chips to finish assembling those cars. Toyota planned to cut vehicle production worldwide by 40 percent in September 2021, while General Motors announced it would stop production of almost all cars at its North American plants for a couple of weeks. The consequence – demand outpaced it’s supply!

 

THE INDIAN CONTEXT

 

Talking about India, demand for semiconductors stands at around $24 billion and is expected to reach $100 billion by 2025. The economy is reviving and demand for electronic durables is going up. Need of Semiconductors is soaring in India as the electronic industry is expanding its roots in India. Also, many smartphone brands including Apple, Samsung, etc. started or expanded their manufacturing and assembling units in the country in past years which add to the numbers of semiconductors required.

Due to the shortage in supply, automobile manufacturers are the ones who are the most impacted for the time being. Maruti Suzuki, the country’s largest car manufacturer, has guided to cut production by around 60% at Haryana and Gujrat based plants.

India can build upon this opportunity but the demand cannot be fulfilled in the short term. So, the government needs to create a long term blueprint to grow the industry and strengthen the whole domestic electronic industry to substitute the import dependence and prevent the disturbance in global supply chains due to the geopolitical tussles.

Government Aid

India lags in the establishment of semiconductor wafer fabrication (FAB) units – due to a weak ecosystem and shortage of resources as compared to more competitive bases like China and Vietnam. Still, India is specialising itself in Chip Designing. Major Semiconductors companies have their fabless Intellectual Property (IP) and System-on-Chip (SoC) design houses in India. The government has to take effective initiatives to create a robust infrastructure for chip designing and manufacturing in India. Back in March-April 2021, the govt. gave hints of providing $1 billion incentives for every company who would start semiconductor manufacturing in India.

Countering China and Multilateral Agreements

India can exploit the negative sentiments against China and attract the companies leaving towards South Asian Nations. The government is trying to attract the companies by providing attractive deals under the Production Linked Incentive Scheme and has been successful to some extent. Also, India can make agreements with different nations and put forward this opportunity to create global supply chains with its allies. India is a part of the Quad group. There have been talks about D-10. These nations can bring a robust mechanism to work on the efficient supply of semiconductors across the globe.

CONCLUSION

It would be no exaggeration to hold Covid, climate change and Trump liable for the global chip shortage. The ongoing crisis is unprecedented and there seems to be no clear way out in the short term. The only thing that is crystal clear for now is, with data being the new oil, this digitalized world will be jammed without semiconductors. To overcome this shortage, rampant measures need to be taken at a global level or else you have probably already imagined what it will look like!

 

Credits-
Content- Aryan and Rajat
Infographics- Anmol and Punit

TATA REPLACES VIVO AS IPL TITLE SPONSOR

In the background

The Indian Premier League is one of the world’s leading cricket teams, best known for the ‘VIVO IPL’ giving the hottest news of the month on the 11th of January. While IPL chairman Brijesh Patel was following a meeting of the executive council announcing that VIVO, a Chinese telecommunications company, had left the IPL sponsors title, and Tata Group was given a green flag as new sponsors. In 2018, VIVO claimed IPL title rights for a whopping Rs. 440 crores per season. Although the first five-year contract with VIVO came in the 2022 season and was extended to 2023 due to one-year leave, Tata Group will enter and remain sponsors of the title for the 2022 and 2023 seasons after the governing body meeting. The reason for this is not yet clear after VIVO agreed to sponsor the IPL title for the 2021 season. BCCI secretary Jay Shah welcomed Tata Group to the board. “This is a landmark event for the BCCI IPL as Tata Group is a model of India ‘s global business with more than 100 years of experience and operating in more than 100 countries on six continents.” and the growing popularity of the IPL as a global sports franchise is a testament to BCCI’s efforts. We are very pleased that India’s largest and most trusted business teams believe in the growth of IPL and in partnership with Tata Group, we will look forward to taking Indian cricket and IPL forward, “Shah said.

Why has Vivo been removed from sponsorships?

It is not yet clear whether VIVO has been released from the TITLE sponsor or released at its own discretion. However, there are two main reasons based on what we can imagine why VIVO withdrew as TITLE sponsor of the IPL and lost its five-year contract with the Indian Cricket Regulatory Board.

India- China Relation Constraints- India’s relations with China as a neighboring nation are deteriorating after recent border disputes in the Galway Valley and Ladakh. As of May 5, 2020, troops from both countries are facing melee weapons in the LAC. Which leads to the deaths and injuries of many soldiers on both sides? VIVO, a Chinese smartphone manufacturer has shown its resilience to the Indian market by boycotting the 2020 theme support. However, its return as a sponsor of the 2021 IPL title does not mark any major reason for its exit.

Dipping Revenues- After the 2020 border dispute between the Sino-Indian and the government policy “DO IN INDIA”, it became increasingly difficult for VIVO to re-establish the same stronghold in the Indian Market that it had previously enjoyed. Its share of smartphones in the market has been reduced from 20% to 16% in the last 2 years. In addition, Rs. The 440 crores per season were too bad to continue as a sponsor of the trophy in times of stress. Therefore, this could be the reason why VIVO has been removed or removed as a sponsor of the IPL title.

Following a military coup on the India-China border in June 2020, the BCCI decided to sever ties with Vivo, a Chinese mobile and technology company. Vivo acquired title support rights between 2017 and 2022 for an estimated US $ 341 million, as an extension of its two-year organization from 2015.

Dreams 11 IPL- An old story

In 2020, VIVO withdrew from sponsoring the title due to the Sino-Indian dispute. Therefore, the India Cricket Regulatory Board has decided to hold a formal auction to select the next largest IPL title sponsor company. Big businesses and institutions like Tata Sons, Aditya Birla, L and L, Dream 11, MPL, etc. were part of that bidding process. Tata Sons, who was interested in the agreement and was considered a priority, withdrew because the rights were only available for the 2020 season. In addition, it was thought that VIVO would return as the main sponsor as soon as the conflict between countries ended. Dream 11, a legendary group app company, has become a major Rs. 365 crores, and IPL 2020 became Dream 11 IPL. It was the second IPL season held in both India and the UAE.

TATA interest in IPL

The IPL is one of the largest stadiums of any kind with its large viewing landscape. It has managed to open its customer base doors to its former sponsor VIVO as well. According to reports, there is a 44% increase in traffic for Dream 11, one of the sponsors.

TATA’s interest in the IPL can be explained by the large purchases made by the company recently. TATA bought Big Basket, Cure Fit, 1mg, and even Air India. This explains why one of the oldest industries in the country came close to the IPL. There is no denying that the IPL is the best way to enter the Indian Market and introduce its new acquisition to the prospective customer.

Another reason could be the TATA NEU app which will be launched soon. This sponsorship agreement will assist in the successful development of the excellent TATA Digital app

The IPL will help revive the old Indian Industrial model.

CVC market capitalization

CVC was one of two companies that won bids to own two new franchises. While its bid for Rs 5625 crore helped them win the Ahmedabad Franchise, the RPSG team won the Lucknow franchise with a bid of Rs 7090 crore.

Both new parties are expected to receive a Letter of intent from the BCCI soon and it has become clear that the same is being discussed at the Executive Council meeting.

Credits:

Content: Ishita, Kajal Khardia and Naman Goel

Infographics: Punit and Vidhi Mathur 

DISPUTE BETWEEN RUSSIA AND UKRAINE

Hostilities have simmered for years but tensions are now escalating amid fears of a Russian invasion. Currently, the two countries are engaged in the Russo-Ukrainian war which started in 2014.

A series of questions arise with the latest escalations between Ukraine and Russia in the Black sea.
How a Russian invasion of Ukraine could spill over into Europe? Will Russia launch a full military invasion of Ukraine?

1. INTRODUCTION

In this competitive world, geopolitical issues are a common phenomenon. One of the most noticeable issues which can be seen since the past few days has been the DISPUTE BETWEEN UKRAINE AND RUSSIA. These are not cross border tensions but there’s a threat that Russia might completely invade Ukraine, i.e., Ukraine will cease to exist. 

In recent contests, Ukrainians have clearly mentioned that they expect their future in Europe, but the country is still going to struggle with extreme corruption and sharp regional riots that might obstruct its way. RUSSIA’s opposition towards UKRAINE led to the biggest security issues in EUROPE. In order to stoke fear, Russia has built up a military force along the Ukraine-Russia border in late 2021 and it is predicted that this conflict may even lead to WORLD WAR 3.

2. BACKGROUND

In 1991, the USSR or SOVIET UNION broke down into 15 countries, the biggest of which was Russia, and Ukraine was also a part of it. In 1921, LENIN’S RED ARMY had invaded UKRAINE. In 1918, UKRAINE got its independence from the Russian Empire, which was overthrown by Russian Revolutionaries in 1917. PUTIN  claimed that the collapse of the Soviet Union was a major humanitarian tragedy. The crisis in Ukraine began with the protest in the capital city of Kyiv in November 2013 against Ukrainian President Viktor’s decision to reject a deal for greater economic integration with the European Union. Following this, the Ukrainian president was overthrown. In March 2014, Russian troops took control of Ukrainians region, Crimea before formally annexing the peninsula, after they voted to join the Russian federation in a disputed local referendum. 

3.WHAT ARE RUSSIA’S INTERESTS IN UKRAINE?

Russia binds deep cultural, economic, and political relations with Ukraine, and in many ways Ukraine is central to Russia’s identity in the world.

Russia and Ukraine have unbreakable familiar bonds that go back centuries. About 20%-30% people harbor sympathy towards Russia and they believe that Russians and Ukrainians are ethnically similar (termed under the category of SLAVIC). In the article, PUTIN also claimed that Ukraine and Ukrainians are an indispensable part of Russian history and culture. 

Ukraine shares a very large section of border with RUSSIA. If Ukraine becomes a part of NATO then, RUSSIA  will obviously be pressurised because it will be surrounded by all sides from the countries which are members of NATO.  Kyiv, Ukraine’s capital, is generally referred to as “the mother of Russian cities,” on the part and in terms of cultural influence with Moscow and St. Petersburg. In the eighth and ninth centuries, it was in Kyiv, that Christianity was brought up from Byzantium to the Slavic public. It was Christianity that served as the anchor for Kievan Rus.

4. ROLE OF ‘NATO’ IN RUSSO-UKRAINIAN WAR.

The North Atlantic Treaty Organization(NATO) was created in 1949 by the United States,Canada,and several western European nations to provide collective security against the Soviet union. It is a military alliance. It means that if a war breaks out against any NATO country or any NATO country is attacked then the rest of the NATO countries would come to protect it with their military. In total, 30 countries are part of NATO. As Ukraine is not a NATO member,the alliance is not directly obliged to defend it in a military capacity. But NATO’s diplomatic backing could help sustain the proaccession majority in Ukraine. 

  • In 1997, a NATO-UKRAINE commission was made so that Ukraine and NATO could partner with one another. 
  • After 10 years, in 2008 Ukraine wished to be part of  NATO.
  • Ukraine was asked to work on their membership action plan to get the membership of NATO.
  • In 2017, the Ukrainian parliament even adopted a legislation which stated that getting NATO  membership is a major objective for Ukraine for the foreign and security policy of Ukraine. 
  • On 16 December, 2021, there was a meeting between the president of Ukraine and the chief of NATO in Brussels where Ukraine committed once again to eventually join NATO despite Russia’s objection.

President of Russia, Vladimir Putin put all his efforts to stop Ukraine from being a part of NATO. But NATO clearly said that independent and sovereign Ukraine has the freedom to take their own decision. The head of NATO has urged Russia to be transparent about its military plans after an increase in the number of troops on its border with Ukraine.

5. CURRENT SCENARIO

The part of Eastern Ukraine is mostly inhabited by pro-Russia people and that part often wants to separate from Ukraine to become a part of Russia. So, Russia is starting to support the separatists in that area. In the two provinces, namely, DONETSK and LUHANSK, Russia is enabling a proxy war. More than 14,000 people have been killed in the proxy war. On top of it, Russia accuses Ukraine of  genocide in Eastern Ukraine. 

Even after supporting the separatists groups, Russia saw that Ukraine and NATO are continuing with their relationship. They aren’t willing to part ways. So, Russia has started building up a military now. More than 100,000 troops have been stationed at the border. The tanks and missiles are  ready not only at the eastern border but on the Northeastern border as well.

6. CONCLUSION

Grudges prevailing between UKRAINE and RUSSIA are ultimately affecting the peace of the entire world directly or indirectly as it is claimed to be the reason for WORLD WAR 3.

  • Russia is threatening to invade Ukraine even after invading Cremea and supporting the terrorists. 
  • The economic dimension remains challenged for disputing countries i.e. Ukraine and Russia. 
  • The dispute is not justifiable to be said between two countries, but it’s between two hearts covering the world.  
  • Russia can not become a friend of Ukraine by using force on every step, Russia needs to change its way to be able to make Ukraine its part.

 CREDITS:

CONTENT: Hitanshu Aggarwal, Tanya Pandey, and Kashish Soni 

INFOGRAPHICS: Anmol Kaur, Charvi, and Abhyuday

Algorithmic trading

Introduction

Algorithm-based trading includes the use of API access and trading automation using the same. In other words, it is a trade generated using automated execution logic.

In algorithm-based trading settings, the system automatically monitors stock prices and initiates an order when meeting a predetermined request. This system eases the burden on traders as they do not have to monitor stock prices in real-time and place manual orders.                         

Trading Algorithm in Practice

The trader follows these simple trading methods:

● Buy 50 stocks in stock if its 50-day average exceeds the 200-day moving average.

● Sell stocks if its 50-day moving average is less than the moving average of 200 days.

Advantages of Algorithm Trading

Algo -trading offers the following benefits:

● Trading is done at the best prices.

● Trading order is fast and convenient

● Trading is planned and done quickly to avoid major price fluctuations.

● Reduce operating costs.

● Simultaneous automatic testing in multiple market conditions.

● Reduce the risk of manual errors when trading.

● Algo-trading can also be tested using available historical and real-time data to determine if it is a viable trading strategy.

● Reduce the risk of human error based on emotional and psychological factors.

Algorithm trading strategies

The following are trading strategies used in algo-trading:

Trend Following Strategies

The most common algorithmic trading strategies include moving average trends, channel outflows, price movement, and related technical indicators. It may be easier to use algorithmic trading strategies because they are not involved in any kind of price prediction or prediction. Commercialization is based on the potential for desired trends, which are very easy to implement using algorithms without complex analysis. The use of 50- and 200-day moving averages have become very popular.

Arbitrage opportunities:

If you buy a stock that is listed twice at a lower price in another market and sells it at a higher price in another market, the price difference has no related risk and thus a risk-free profit is called arbitrage. The same process is used in stocks compared to future instruments as the difference in price exists at different times. Identifying such price differences and placing smooth orders has the potential for profitable arbitrage.

Index Fund Rebalancing:

Index values ​​refer to periods that re-measure hold to balance with the help of appropriate indicators. This creates a range of profitable opportunities, which they can spend on the expected 20- to 80-point profit margin and the number of stocks in the index fund before the index fund is renewed. Such trades are done on time and are listed at the best prices.

• Strategies Based on the Mathematical Model

Statistical models, which include a mid-delta trading strategy, as well as an option or combination of options that are less secure.

• Trading Range

Mean strategy reversion strategy is based on the idea that high or low commodity prices are temporary and are consistent with their average value on a regular basis. Proper recognition and definition of price range and the use of an algorithm allow trading to take place automatically when the price of an asset enters and exits its predetermined range.

Technical Requirements for Algorithmic Trading

. The following are the technical requirements for Algorithmic Trading:

1) Computer programming information should be familiar with the required trading strategy programs; one can hire programmers or pre-made trading software.

2) Network communication and how to use trade platforms to place orders is a basic thing to have.

3) One should also have access to market data feeds to monitor the algorithm for arbitrage opportunities while placing orders.

4) System evaluation, appropriate infrastructure, and skills are required before we live in real markets.

5) Previous data acquisition is required for retrospective testing as well as a piece of information for a set of complex rules that are useful for algo trading.

Example of Algorithmic Trading 

20 short shares of INR / USD if INR / USD rises above 1.2. For every 5 points that go up in INR / USD, close short with 2 shares. For every 5 points that fall in INR / USD, increase the short area by 1 share

Buy 100,000 shares in ONE PLUS if the price drops below 100. For every 0.1% price increase above 100, buy 1,000 shares. For every 0.1% decrease in the value of less than 100, sell 1,000 shares.

Regulation by SEBI to regulate Algorithmic Trading

As mentioned earlier, Sebi proposed an algo-based trading framework by trading investors made using API access and automated trading initiatives. In the case of algorithms used by store investors using APIs, it is difficult to identify algo-based trading details.

“This unregulated/unregulated algo threatens the market and can be misused to exploit markets in an orderly fashion and to attract potential investors by assuring them of high profitability. The potential losses in the event of an algo strategy fail largely for investors. As these suppliers/sellers of foreign companies are not regulated, there is also no way to address investor grievances, ”said the Department’s discussion paper.

Therefore, Sebi suggested that all orders “coming out of the API should be considered as algo orders and be under the control of stock traders and that the trading APIs of Algo should be marked with the unique algo ID provided by the -Stock Exchange grant. authorization of algo “.

The market regulator also said that the stockbroker “needs to get the approval of all the Algo Exchange. Each Algo strategy, whether used by a trader or client, must be approved by the Exchange and as is the current practice, each algo strategy must be approved by the Certified Information Systems Auditor (CISA) / Diploma in Information System Audit (DISA). ). Sebi urges stockbrokers to use the appropriate technical tools to ensure that appropriate checks are in place to prevent “unauthorized alteration / algo adjustment”.

The market regulator also suggested that stockbrokers could provide in-house algo strategies developed by an authorized dealer or outsourced the algo provider / seller of a foreign company by making a formal agreement with each third-party supplier/dealer for its services. are used by the seller.

It adds that the stock trader is responsible for all algos from its APIs and for resolving any investor disputes.

“The obligations of a stockbroker, investor and third-party provider/broker/dealer must be defined separately. The stockbroker is responsible for assessing the investor’s suitability before offering an algo location. No recognition will be given in exchange for the third party algo provider/seller who creates the algo, ”said Sebi.

Sebi said two-factor authentication should be built across such a system that provides access to the investor in any API / algo trade.

The market regulator sought public comment until January 15 on his proposal to trade algo..

Conclusion

Algorithmic trading is where you use computer codes and software to open and close trading according to established rules such as price movement points in the lower market. If current market conditions are similar to any predetermined conditions, trading algorithms can buy or sell orders for you – saving you time by eliminating the need to scan the markets in person.

Credits-

Content- Ishita, Sahil Pruthi, and Kashish

Infographics- Charvi, Vandita 

 

PAYMENT NETWORK WARS

INTRODUCTION

A payment system helps in the settlement of financial transactions through the transfer of a value in monetary terms. The word electronic payment which is very prevalent now involves a direct payment made from one bank account to another through electronic means and gadgets with no direct intervention from banks and thus saving the cost of making a visit to the bank which earlier was considered as the opportunity cost of making a transfer. There had been many reports around the corner about  Visa filing a complaint with the U.S. government, alleging India using unfair means to promote its homegrown payment network RuPay.

DUOPOLY OF MASTERCARD AND VISA 

The Duopoly of both the US Based Companies may be better understood by the subsequent features-

•Formed by Unions – it’s important to appreciate that companies like MasterCard were formed by a union of Yankee banks. Visa was owned by Bank of America before being spun off into a unique entity. All the banks mentioned above constituted the whole American banking market. Hence every card issued within the American market was issued by either of the 2 entities. Since debit cards and credit cards were first issued in America, by default Visa and MasterCard had a vantage over other companies

•Contract Restrictions- The banks and merchants were forced to accommodate these companies since there have been no viable options. to forestall the network of competitors from spreading any longer, Visa and MasterCard were preventing banks from issuing the cards associated with other networks. They were also preventing merchants from accepting these cards.

•Network Analysis- it must be understood that the payments processing market could be a chicken and egg story. this implies that if more merchants accept a specific sort of card, more users want to use it. On the opposite hand, if more users use a specific form of a card, merchants are going to be forced to just accept it. However, what has to happen first isn’t clearly known.

DUOPOLY V/S RUPAY

To begin, let’s start by understanding the mechanism behind these transactions. Suppose you visit a supermarket store to shop for a packet of chips. Unfortunately, you forgot to bring some cash with you. So you choose to whip out your debit/credit card to acquire it. As you swipe the cardboard on a PoS machine, suddenly a magical dance begins. Your bank immediately moves money to the shop owner’s bank. the shop owner’s bank charges a tiny low fee and calls it the merchant discount rate. But it can’t keep the complete fee with itself. it’s to share an element of this with another intermediary, that helps to process this payment. That intermediary happens to be Visa or Mastercard. And since the shop owner has earned a margin from a procurement, they now must pay the bank the merchant discount rate usually accounting for up to about 1–3% of the transaction. And this is often how payment network flourishes in an unknown world. The dominance of Visa and Mastercard has been referred to as a duopoly within the payments network market. newer this duopoly has been facing a true threat as countries have started developing their own payment network alternatives. India as an example, in 2016, built the Unified Payments Interface (UPI) to facilitate instant payments. Anyone could scan a fast Response (QR) code and transfer money from one financial organization to a different instantly. And most significantly it came up with no cost. Merchants loved it because they didn’t should pay the additional charge. And in a very high potential market like India, Visa and Mastercard started losing lots of cash. The approximation pegs around Rs. 6000 crores. And this came as displeasure to the prevailing duos. They made numerous appeals to the govt. asking them to shield their interests.

IMPACT OF RUPAY EXPLAINED 

The numbers never lie. And to prove this, here are a few financial facts, which prove that the monopoly of Visa and Mastercard is at severe threat from RuPay.

*Total Volume of Cashless Transactions and RuPay cards issued by banks

Along with UPI, a digital payment platform from NPCI, RuPay has witnessed an enormous rise in usage and has been welcomed throughout the nation. Till August, a total of $51 billion has been transacted using the cashless mode, out of which RuPay processed Rs 8,430 crore ($1.16 billion) of transactions, and UPI processed Rs 59,800 crore ($8.26 billion) of transactions. Post demonetization, the share of RuPay was mere Rs 1100 crore, and in UPI was just Rs 50 crore. But this year, RuPay processed cashless payments of Rs 16,600 crore, which is a 180% increase since 2017, while Rs 5,934 crore worth of transactions was processed by RuPay. The sudden shift within the trend, with increased usage of RuPay and UPI by Indians, shows that Visa and Mastercard are losing their comparative advantage in India, and their market share is eroding rapidly.

*Usage Of RuPay Cards at PoS

Before RuPay, only Visa, Mastercard or AMEX were accepted at Point of Sales extreme by merchants. But now, RuPay has changed the complete equation. In 2020-21, RuPay stamped debit cards were used across 459 million transactions at PoS extremes, pan-India. this certainly is 135% more compared to 2016-17, when RuPay cards processed only 195 million transactions. This 135% increase clearly indicates a loss for Visa, Mastercard, and AMEX.

*Usage Of RuPay at Ecommerce Portals

Online shopping too like offline shopping has embraced the usage of RuPay cards with full season 2020, e-commerce portal witnessed 208 million transactions, using RuPay powered cards. this is often a rise of 137% compared to 2017 when the amount was only 87.5 million Thus, RuPay has conquered both the online and offline markets in promoting Digital India. No wonder that as a last resort, they had to ‘complain’ to US Govt. According to NPCI, RuPay is on the verge of overtaking Visa or Mastercard to become 2nd player during this niche, and very soon, it’ll be a No.1 player.

IMPACT ON INDIAN ECONOMY

The Payment network has a very huge impact on the Indian economy following the motive of a cashless economy initiated by the central government. Both the companies, Mastercard and Visa, have a high number of users as well as merchants in India. Being well established U.S based companies, they charge high processing fees to all their foreign users and merchants. Contributing a large portion of tax revenue to the government by charging 5% GST per month. With respect to card issuance, during the past 5 years, the number of credit cards issued increased from 211 lakh to over 550 lakh. The same period also witnessed a steep increase in debit cards from 5535 lakh to over 8000 lakhs. This was supported by the 2960 lakh Rupay debit cards issued to BSBD account holders. This increase in the issuance of cards made by local companies like Rupay is boosting online and physical POS. Thus, fulfilling the government objective of Digital India.

Credits:

Content: Tanmeet, Sahil, Naman

Infographic: Aanchal, Charvi

EU 300billion global infrastructure plan

The European Commission has unveiled a $ 300 billion global investment plan by 2027 for infrastructure, digital projects and climate change.
What is the $300 billion global investment plan? Is this the same or better option than China’s Belt and Road Initiative?

1. The Global Gateway (Action & Strategy)

The gate project, will it compete with Xi Jinping’s BRI?

The European Commission has unveiled a $ 300 billion global investment plan by 2027 for infrastructure, digital projects and climate change as a better option than China’s Belt and Road Initiative. The program, called Global Gateway, aims to strengthen European chains, boost European Union trade and help combat climate change, focusing on the digital, health, climate and energy and transportation sectors, as well as education and research.

The EU’s $ 300 billion investment in global infrastructure will be better than China’s belt and road system, said the European Commission president while announcing a strategy to improve technology and public services in developing countries. Ursula von der Leyen said the EU Global gateway strategy was a gift good for global infrastructure development and based on democratic values ​​and transparency. China launched a belt and road campaign in 2013, but Von der Leyen is confident the EU can close the gap, although European spending is predicted to remain lower than China’s equity.

2. $ 340 billion infrastructure project, similar to China’s “Belt and Road initiative”.

  • The billionaire Beijing’s Belt and Road Initiative (BRI) has been dubbed the Chinese Marshall Plan, a global government-sponsored campaign, a slower economic recovery package, and a massive marketing campaign already underway – Chinese investment around Earth.
  • In the five years since President Xi Jinping announced his grand plan to link Asia, Africa and Europe, the plan has evolved into a comprehensive statement to describe almost every aspect of Chinese cooperation abroad.
  • From Southeast Asia to Eastern Europe and Africa, Belt and Road comprises 71 countries comprising half the world’s population and a quarter of the world’s GDP.

3. The EU will launch a major global infrastructure plan:

Infrastructure Fund to fight China’s BRI

To support this work, the EU will use its European Fund.

• Under this, 40 billion euros are made available as collateral, and will provide grants of up to 18 billion euros from foreign aid programs.

• This program will require funding from international institutions and private companies to achieve its intended purpose.

• Funding will be made under appropriate and favorable terms to reduce the risk of a debt crisis.

4. The EU reveals a 300-billion-euro solution to global investment.

Through the Global Gateway, Europe hopes to reduce the global investment gap. According to G20 estimates, the global investment deficit will reach € 13 trillion by 2040. Closing this gap while achieving the Sustainable Development Goals (SDGs) requires an estimated annual investment of € 1.3 trillion.

According to a European Commission document, Global Gateway is governed by standards and designed for EU social, environmental, financial and labor standards. It includes visual infrastructure such as – fiber optic cables, transport corridors, clean power lines – to strengthen digital, transport and power networks. It aims to convey a ‘positive environment’ i. e. profitable investments and business-friendly business conditions, regulatory integration, measurement and integration of supply chain, to ensure project delivery. The EU has developed financial and other tools to address investment needs in sustainable infrastructure development as per its report.

The head of the European Commission, Ursula von der Leyen, stated that “We want to make the Global Gateway a reliable brand because of its high quality, reliable standards and transparency”. Global Gateway hopes to spread European technology and expertise to developing countries.

5.  How instrumental was the G7 in devising the Gateway?

The Global Gateway is being interpreted as a dovetail to what was endorsed by a U.S.-led agreement reached during June’s G7 summit. Leaders had resolved to launch a worldwide infrastructure initiative called ‘Build Back Better World’ (B3W) to assist in tapering ‘the gaping infrastructure need’ within the developing world and bid ‘a green rival’ to China’s initiative.

The G7 Statement proposes to amend systems to finance quality and sustainable infrastructure. Another objective is to aid a robust recovery from the COVID-19 pandemic and make swift progress towards the Agenda 2030’s Sustainable Development Goals. The European Commission acknowledged the trans-Atlantic roots of the Plan too. For the infrastructure project, it seeks a ‘concerted effort of like-minded partners’. It is contended that programs such as the B3W and Global Gateway will ‘mutually reinforce’ one another. The EU, thus, plans to meet international climate commitments, including those recently made at COP26 through the venture. Given these developments, the Gateway appears to be a step taken in the right direction.

6. Europe’s global gateway plans to counter China, but questions remain. 

The EU’s Global Gateway will face many challenges. Western countries have viewed the BRI of China as its tool to push the emerging economy into over-indebtedness and corrupt practices. To combat this, a draft EU document ensures a ‘moral code’ and does not create unsustainable debt. Global Gateway will be used ‘in the form of Team Europe’, raising funds for the EU, its Member States and European financial institutions affiliated with the private sector.

However, European investment is known for its complex procedures. The EU has incorporated these plans into its comprehensive account of its ‘values ​​and principles of international participation. Communication projects with Global Gateway are channels to place these practices at the international level. Council outlined how the project will strengthen European programs around the world, such as the ‘European Green Deal’.

Communication in the Indo-Pacific is also not a playground. Chinese projects are moving fast — due to a lack of proper procedures, cheap loans close to flexible conditions. The EU-India Connectivity Partnership and the allocation of 79.5 billion euros between 2021 and 2027 in the newly formed NDICI are essential for creating an alternative route for Indo-Pacific belts and roads. The answer to whether the EU can overcome both internal and external barriers to transforming into a reliable, long-term partner for India and the world remains to be seen.

Credits:

Content– Harsha, Ragini, and Vidhi 

Infographics- Kashish, Charvi 

OMICRON VARIANT

On 26 November 2021, WHO designated the variant B.1.1.529 a variant of concern, named Omicron.
Is this new variant going to be the reason for 3rd wave in India? Is this variant more hazardous than the Delta variant?

What exactly is Omicron Variant?

On 24th November 2021, a new variant of SARS-CoV-2 was reported to WHO from South Africa, Later on, this COVID-19 variant was named Omicron, after the 15th letter of the Greek alphabet. The World Health Organization uses Greek letters to name variants because these names are easier to communicate than scientific designations like B.1.617.2. According to the W.H.O., the 13th and 14th Greek letters (nu and xi) were skipped over because “nu” sounds like “new,” and “xi” is also a common surname. The strain named Omicron was designated as a variant of concern by the World Health Organization on 26th November, which has also led to a fresh round of travel restrictions across the world and raised concern about what may be next in the pandemic.

What does it mean for our day-to-day lives?

Omicron- This is one of the terms that every person on the planet, from primary school kids to the elderly is aware of these days as everyone is just so uncertain about what impact would this new strain is likely to have on their lives of people? 

So, let’s just dive a little deeper into that- although the WHO hasn’t provided us with an official statement regarding the transferability of the virus, they have claimed that the virus is highly mutable which means that it can mutate rapidly. This characteristic of the virus entails that it is likely to spread faster and more conveniently than the previous strains so we all should be ready for stricter social distancing and preventive measures’ regulations and go after the same drill that we have been going after for the last couple of years now.

What implications is it likely to have on the world and Indian Economy?

The omicron variant is dealing a blow to positive hopes that the world economy would enter 2022 on a firmer footing, potentially diminishing plans by policymakers to focus on inflation rather than weak demand. The application of travel restrictions will shiver consumer and corporate confidence, likely limiting activities in some places just as the holiday season gets begun in many economies. 

Are vaccines successful against Omicron?

Our current vaccines are still highly successful against SARS-CoV-2 variants, including the Delta strain. This is because the vaccines choose the whole “spike” protein of the virus, which is a large protein with a moderately small number of changes across variants.

The vaccines may well carry on warding off critical illness and death, although booster doses may be needed to protect most people. Still, the makers of the two most effective vaccines, Pfizer-BioNTech and Moderna, are preparing to compound their shots if necessary.

Can Omicron trigger a widely speculated third wave? Could this be worse than the second wave?

Experts have contradictory opinions regarding Omicron’s ability to cause a third wave, mainly one more devastating than the second wave caused by the Delta variant. Some imagine that it has the propensity for greater transmissibility because it has been categorized in many cases quite rapidly in South Africa, Hong Kong, and Botswana. While causing a rapid rise in cases in South Africa, the country where it is believed to have originated, it has also displaced the Delta variant to a large extent. Available epidemiological and clinical evidence so far shows that Omicron is highly infectious due to its 32 different mutations, more than double the number of mutations of the Delta variant. On the other hand, many experts cast doubt over the probability of the new strain to drive a third wave more harmful than the second, simply because of the increased number of vaccinations and recovered patients. 

What should Government respond to this?

In the days since scientists in South Africa identified the Omicron variant, cases have been reported in several countries around the world. Several countries are tightening travel and entry restrictions after the WHO warned on Monday of the global risk of a surge in infections. Health Minister informed Rajya Sabha that India has not reported any case of Omicron, but the government has taken measures to ensure that it does not reach the country. The Centre has issued advising after looking at developments globally and is keeping a close observe on ports, he said, adding genome sequencing of suspected cases is being done.

Is the social media panic around this new variant legit?

In the contemporary world where it just takes a couple of minutes to type in some words and expose them to the entire world through social media, the circulation of information has become so smooth and communication has never been easier. In such a scenario, it’s pretty obvious that both crucial and misleading information can reach billions of people creating either awareness or panic. A similar issue has been come across when it comes to Omicron- also known as the “Variant of Concern”: A few posts have been circulated on social media which claim that this new variant is deadlier, shows no symptoms, and directly affects the lungs. Such assertions have been causing unfathomable panic in the world about what the new strain might do to them in the impending future. But, according to the World Health Organization (WHO), the transferability and intensity of the strain haven’t been determined yet, and that it can be detected by the RTPCR tests. So, the end word would be not to believe all the stuff you come across about the new variant on the web and that we all can fight it together if we stick to the official guidelines and support each other emotionally during this hard time.

What is the world leaders’ take on this newly awakened variant of COVID-19?

Not less than than 30 countries have closed their frontier to a few countries like South Africa, Botswana, Lesotho, Mozambique, and Namibia, to name hardly any, in light of the new Omicron variant of the Coronavirus causing a rapid increase in cases in these countries. A few countries like China, Japan, Israel, and Morocco have closed their borders to all countries. Many others like the USA, UK, Canada, France, Germany, Australia, Brazil, and Russia have introduced partial bans to travelers only from the select few countries mentioned at the beginning of this paragraph. India, on the other hand, has not introduced any form of travel ban yet.

Prime Minister Narendra Modi of India spoke about the need to be proactive in light of the new variant. People need to go after COVID guidelines such as masking and social distancing. He also highlighted the need for monitoring all international arrivals and their testing as per guidelines with a specific focus on countries identified as “at risk.”  

Several other global leaders have introduced travel bans, urged the public to take the COVID vaccine, and go after all COVID-appropriate conduct to reduce the spread of the new variant across the world. 

Thus, according to world leaders, the Omicron variant is a cause for concern, not panic.

Credits-

Content– Ishita Wadhwa, Sarvesh Gautam, Ishita Arora, and Varun Vinod Rao 

Infographics– Bhavana Sharma 

The Farm Laws Fiasco

The farm law bills was passed in September 2020 in the parliament by the Rajya Sabha and Lok Sabha for the benefit of the farmers. But later these bills faced the protest from the farmers association of the country for the repealing.

The Beginning

2020, a difficult and challenging year for the entire world, but in India, it was more than just Covid-19. From Anti-CAA protests to the JNU riots, it was utter chaos with a big dollop of irony. But it was in September 2020, when the three controversial farm laws were passed in the Parliament, which set the stage for the showpiece act, an act for which the audience covered the World, The Farmer Protests. The stakeholders in this civil conflict were the Government of India (GoI) and multiple farmer unions, represented by the Samyukt Kisaan Morcha.

The Turbulent Three (Body)

The formation of the three laws was the product of a committee set up in July 2019 to discuss the implementation of certain rules and regulations by the States of the Model Framing Acts, 2017. Subsequently, the GoI promulgated three interim ordinances which dealt with the agricultural produce, their sale, hoarding, marketing, and contract farming reforms among other things. These were then introduced as bills and passed by the Lok Sabha and then by the Rajya Sabha via a voice vote despite the opposition requesting a full vote. The President of India then gave his assent by signing the bills which hence made them Acts.

The Three Laws are:

● Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Act;

  1. Expands the scope of trade areas of farmers produce from select areas to “any place of production, collection, and aggregation.”
  2. Allows electronic trading and e-commerce.
  3. Prohibits state governments from levying any market fee or cess on farmers.

● Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act;

Creates a framework for contract farming through an agreement between buyer and farmer before the production or rearing of any farm produces.

● Essential Commodities (Amendment) Act;

Allows the center to regulate certain food items in the course of extraordinary situations like war or famine.

Response and Reaction

India

The immediate reactions were strong-worded statements from the opposition such as the Congress and TMC leader Derek O’Brien, who tore through the government in the Parliament stating,” This (farm laws) is like taking the parliamentary democracy, shoving a knife inside it and killing it, and so we protested”. Withdrawal of political support and resignations of ministers in protest of the farm laws became a common sight. The GoI raised their distress over the misleading and misunderstanding farmers, stating that they were again being misled by the people who had misled them for all these years and that the old wasn’t being replaced but new options were being put forward for the farmers. Union Ministers too echoed the statements made by the PM. Eleven rounds of talks have been held between the GoI and the Farmer Union, which bore no fruit. The conclusion was reached on only two minor issues concerning the farmers, with their demands for scrapping the laws being completely declined by the Government representatives.

International Coverage

Australia:

MPs Rob Mitchell and Russell Wortley were among Labour leaders who spoke in support of the farmers’ protests.

Canada:

Justin Trudeau, was one of the first politicians to speak publicly on the protests and criticized the alleged mishandling of the protests by the GoI, stating that Canada will “always be the first to defend the rights of peaceful protestors”.

United Kingdom:

Britain was one of the most active and outspoken countries to comment on the Farmer Protests, with several Labour MPs raising concerns and discussing the GoI’s response to the protests in the British Parliament.

USA, New Zealand, and Italy too expressed their critique of the Indian Government and solidarity with the farmers.

The Toolkit Case,

A document shared by Greta Thunberg on Twitter, which was allegedly a guide for the farmers on how to mobilize and garner support from the people of India, as well as Indian Embassies too. Probes into the toolkit allegedly found links to Pro Khalistani organizations based in Vancouver. On the other hand, it was claimed that the toolkit was merely a means of mobilizing support for the farmers, who were not being given due importance and attention in this dire situation. As per Greta Thunberg, the intention of the toolkit was misunderstood, leading to several arrests especially that of Indian climate activist Disha Ravi who accepted her involvement in this controversy. Although these claims still remain disputed.

Rihanna,

Global celebrities like Rihanna, with over 100 million followers on Twitter, posted a tweet with reference to a CNN news story on an internet outage near the protest sites to prevent any communication among farmers or to prevent any news from circulating among the general public. Sharing the news report, she simply tweeted, “Why aren’t we talking about this?”. This 6-word tweet from the Barbadian singer was sufficient to cause a stir in the entire nation. Indian Politicians, Famous Sportspersons and Bollywood Celebrities all saw this as an opportunity to help the Government and decided that harnessing this opportunity would be the best way to divert the focus of the public from the main purpose, and to some extent, they were successful in their endeavors as all major media houses started covering this petty issue which was made out of a simple humanitarian move. Rihanna received severe backlash from prominent Indian personalities like Amit Shah and other Union Ministers, Sachin Tendulkar, Akshay Kumar, etc. who claimed that Rihanna and other so-called outsiders were trying to disrupt the sovereignty and integrity of India and were interfering in India’s so-called personal matter.

However, they forgot that even protests against the burning of The Amazon Forests, The Taliban takeover of Afghanistan, and the arrest of Putin critic Navalny were also not our internal but external matters on which many prominent Indian personalities spoke their heart outs as concerned individuals of the society, however, they were never pulled out by anyone or any nation for expressing their personal opinions out in front of the general public, on issues which were internal for some other nation. This highlighted the hypocrisy of the Government and showed how it exercises undue influence over famous individuals with a massive fan following to suit its propaganda.

Farmer Union’s Demands

Immediate Demands:

The farmers only had one immediate demand, Repealing the Farm Laws.

Later Demands

The following were the main demands and assurances demanded by the protesting farmers,

● Convene a special Parliament session to repeal the farm laws.

● Make MSP and state procurement of crops a legal right.

● Assurances that the conventional procurement system will remain.

● Implement Swaminathan Panel Report and peg MSP at least 50% more than the weighted average cost of production.

● Cut diesel prices for agricultural use by 50%.

● Repeal of Commission on Air Quality Management in NCR and the adjoining Ordinance 2020 and removal of punishment and fine for stubble burning.

● Release of farmers arrested for burning paddy stubble in Punjab.

● Abolishing the Electricity Ordinance 2020.

● The Center should not interfere in state subjects, decentralization in practice.

● Withdrawal of all cases against and release of farmer leaders. 

Aftermath

A week back, our PM, Mr. Narendra Modi, finally made the announcement, the repealing of the three farm laws, which was the result of the farmers’ agitation, which went and is still going on for more than a year, with the farmers demanding that they will continue to sit on protests till the Three Laws are repealed officially in the Parliament and till the government gives a legal guarantee for MSP prices. The Government in order to restore peace and cordial relations, had to bow out and agree with the will of the farmers unwillingly. Congress leader Rahul Gandhi said that it was a strong blow to the arrogance of the government and that they had to bend down in

front of the genuine demands of the farmers. Congress in an official statement even said that they would commemorate the day when the farm laws were repealed as of the Kisan Vijay Diwas. Now, whether this move by Congress was genuine support or a mere means of opposing and defeating the Government is something that remains unknown.

Recently, the farmers planned a tractor rally to the Parliament on 29 November to place their case in front of the Government and to pressurize them to fulfill their demands in the Parliament as soon as the winter session of the Parliament begins on 29 November.

However, at the request of the Union Agriculture Minister, Mr. Narendra Singh Tomar, they decided to delay it till 4th December, making it crystal clear that they are unwilling to back out till their demands get the legal stamp of the Parliament. Despite the Government’s agreement to repeal the laws, decriminalize stubble burning and guarantee MSP for agricultural produce in the Parliament, the farmers’ anxiousness did not take a dip as they felt that all this could turn out to be a hoax. Although the Government agreed to the demands, it also made it clear that unjust dominance of the farmers will no longer be tolerated and that solutions need to be found out in an amicable manner.

As soon as the winter session of the Parliament began, the Government passed the law to repeal these laws amidst the Opposition’s demand for deliberation over the shortcomings of the GoI in this regard. No heed was paid to the Opposition, led by Mr. Adhir Ranjan Chowdhury, and the GoI moved ahead with the passing of the bill in the Lok Sabha despite all the chaos, a

flashback from what had happened during the passing of these laws.

Conclusion

During the protests, more than 600 farmer lives were lost, a riot like the situation was averted on The Republic Day, police-farmer clashes were a common sight, yet, the law repeal is very evidently a political strategy with two key elections to be held in the farmer majority states of UP and Punjab. This should be a wake up call for us as citizens of a “democratic” country, is this the price for protesting and expressing disapproval against the government? Is this temporary relief or is it truly the ‘Victory of Democracy’

Credits-: 

Content- Abhyuday Agrawal

Infographics- Anurag Kumar 

CAATSA SANCTIONS IN INDIA 

The Countering America’s Adversaries Through Sanctions Act (CAATSA) imposed sanctions against Iran, Russia and North Korea.

The Countering America’s Adversaries Through Sanctions Act (CAATSA) is a United States Federal Law that has imposed sanctions against Iran, Russia and North Korea till now. This act prevents trade partners of the United States from entering into bilateral contracts with these three nations.

The bill was passed in the Senate on 27 July 2017. Since India has commercial and defensive contracts with Iran and Russia, the CAATSA does have an impact on India’s foreign policy.

The US administration has also imposed sanctions on its NATO partner Turkey for the purchase of an S-400 missile from Russia. The United States had made it clear to Turkey and the rest of the world that its purchase of the S-400 system would endanger the security of the USA.  Its procurement will provide substantial funds to Russia’s defence sector, as well as access to the Turkish armed forces and defence industry of Turkey.

But ignoring these CAATSA sanctions Turkey has decided to move ahead with its deal with the Russian defence industry. Article 231 of the CAATSA ACT 2017 is of particular importance to Indian interest as it is also in deal with Russia to procure S-400 air defence system from Russian Federal Service for Military-Technical Cooperation (FSMTC) for USD 5.43 billion deal with Russia for five S-400 regiments which are expected to be delivered by the end of the year 2021. Two Indian Air Force (IAF) teams have already been trained on the system by the manufacturer Almaz Antey, in Russia to operate this system.

Also, Mr Putin is scheduled to visit India in the first week of December for the annual summit and the inaugural India-Russia 2+2 ministerial dialogue is likely to be held a day before or on the day of the summit itself. Deals are expected in defence, trade and energy, apart from the focus on regional issues primarily focused on the developments in Afghanistan.

Implications for India regarding CAATSA:-

The India-United States relations, especially when it comes to the defence services, It grown exponentially since 2008. Till the year 2019, about $15 billion worth of weapons have been purchased by India from the USA. Keeping this in mind United States lawmakers had specifically told the senate that the sanctions should not affect major defence partners such as India and this deal would prove beneficial for the USA also being a major partner of India and also a good Ally in the Indo-pacific region and major groupings like QUAD.

A waiver of such CAATSA for India has been under consideration since the law had come into force but little headway has been made in that regard. In fact, India was threatened with sanctions when it decided to buy the S-400 missile launchers from Russia and buy crude oil from – which India had to cancel the deal due to the fear of US CAATSA Sanctions. What is more worrying for India is the example of Turkey a key NATO ally, who was expelled from the US F-35 fighter jet programme when it purchased S-400 missile systems from Russia.

Still, India went ahead with the S-400 deal in 2018 with no negative reaction from the United States government. The delivery of the S-400s is expected to finish by 2025. Lately, the United States Government has stated that although a waiver is not possible at this time, a blanket application of sanctions against India for its defence contracts with Russia is also not being considered.

Credits- 

Content- Nitish 

Infographics- Manav 

5 STAR NOTHING COIN

Cadbury 5Star has launched Nothing Coin, a new form of currency that gets mined while you do nothing. It challenges the traditional notion of how only hard work helps people earn.

Imagine a world, where you get rewards for doing absolutely Nothing, sounds impossible? Not anymore.

Introduction

Imagine a world, where you get rewards for doing absolutely Nothing, sounds impossible? Not anymore. With its all-new campaign, Cadbury 5-star promises to grant the customers exclusive rewards for doing ‘Nothing’. 

Cadbury has always been keen on implementing innovative marketing strategies. Be it ‘Ramesh Suresh’ ads or its last brand campaign, where they wanted us to do ‘Nothing’.

The idea of Cadbury nothing coin

Cadbury Five Star, a well-known chocolate brand from Mondelez International, takes immense pride in coming up with innovative marketing campaigns. However, in 5 star’s last brand campaign, Cadbury found itself in a fix for depicting youth of the country as non-responsive. In the campaign, Cadbury had stressed the act of “doing nothing”, which did not work out well for the company.

“There is one comment which keeps recurring every time we ask you to chill, Eat 5 Star and Do Nothing”

“Poora din kuch nahi karenge toh kamayenge kaise?”

“This comment has affected us dearly and contributed to a lot of sleepless nights. So we decided to resolve it once and for all.”

Learning from their mistakes, Cadbury 5 star has initiated their brand new campaign, which works on the similar lines of doing nothing, but offers something more.

About Nothing Coin?

Cadbury 5 Star has launched Nothing Coin, a new form of currency that gets mined while you do nothing. With no expensive hardware or large investments needed, Nothing Coin challenges the traditional notion of how only hard work helps people earn.

In this latest communication, the brand is talking to today’s youth who are digital natives and hardly remember a time without smartphones, the internet, and social media. Composed of college-goers and first-time job seekers with action-packed schedules, they are hardly left with time in their hands to simply relax and do nothing. Through this campaign, the brand in a quirky way promotes the idea of moving away from the stressors of life, enjoying some downtime, and spending- time doing nothing; all while rewarding and letting them earn.

The launch of this one-of-its-kind currency will be supported by a 360-degree integrated marketing communication, including digital films, innovative outdoor, and influencer-led activation. As part of the outdoor activation, the brand has taken a spin on traditional bank setups and built a branch at Nariman Point in Mumbai wherein consumers can visit this bank, grab a Cadbury 5Star, sit, and do nothing to mine more Nothing coins on our website. The bank has a loans counter, an ATM, and investment schemes with quirky messages that ask the consumer to do nothing.

How to join ‘Nothing Coin’?

Nothing Coin is the Cadbury 5-star’s cryptocurrency. Users can mine Nothing Coins by simply registering on the official website (exclusive for mobile devices). 

  1. Visit 5 star Nothing Coin website
  2. Click on the start button
  3. Enter on your mobile number and click on continue
  4. Enter your first name and email address
  5. Enter OTP and click on continue
  6. On the next page click on the start button of 5 star nothing coin mining 
  7. Mining will starts
  8. You can stop mining and withdraw your nothing coins
  9. You can withdraw in form of vouchers from jio mart or a 5-star mall
  10. 3 nothing coins= Rs 1

What to do with Nothing Coins? 

Although not an actual currency, Nothing coins can be traded at exclusive 5-star digital malls or be exchanged for Jio-mart vouchers. Well, they did not stop there. Cadbury went so far as to create their bank! Nothing Coin Bank sits right in front of the SBI Head office, Nariman Point, Mumbai. 

Use of Nothing Coin Bank

The ‘Nothing Coin Bank’ is equipped with a loan counter, an ATM, and Investment schemes. All you need to do is, purchase a 5-star, scan the code, and chill in the bank. You will start mining coins immediately. And as soon as you start using your device, the mining will stop.

All by itself, the Nothing coin campaign seems promising. The tweets have started rolling in, and people are awe-struck by what Cadbury has launched. 

Despite experiencing a backlash to its previous ‘Do Nothing’ campaign, Cadbury 5-star has decided to stick with it. Well, this time offering something in return for ‘Doing Nothing’. 

India has the highest number of crypto investors in the world as 100 million people have invested in the new financial sector. The country has good potential for the crypto market to boom and Cadbury’s 5-star is making a fun early entry into the space.

How To Redeem/Withdraw Nothing Coins?

Login In Website And Go To Wallet. You Can Click On It And Land On The Redemption Page Where You Can Choose The Value And Partner As Per Your Convenience And Redeem.

How to redeem 5 Star Nothing Coins in JIO Mart?

  1. Firstly Download the Jio mart App from Play Store.
  2. Open App and log in with a Mobile Number.
  3. Now Add Any Products Up to ₹100 on Cart.
  4. Proceed to Payment Page and Enter Promo/Coupon Code Which You Redeem on 5Star Nothing Coin Website.
  5. Now Your Cart Becomes Zero.
  6. Just click on Make Payment.
  7. Your Order Successfully Placed.
  8. It will be delivered to your doorstep very soon.

Conclusion

The popular chocolate brand, Cadbury 5 star, has launched a brand called “Nothing Coin Bank”. This is a marketing campaign for a popular brand where users will be simply rewarded for doing nothing. The users need to log in to the microsite and have to do nothing but sit still, without using their phone. As long as users did not use their phones, Nothing Coins will be added to their wallet and they can use these coins to shop on Digital 5 Star Mall or JioMart and can even trade coins for vouchers.

The brand is known for its tagline ‘Eat 5 Star, do nothing’ and is another marketing strategy of the brand. On one side where it promotes the brand, it also gives the young generation to take a break from their phones and do other activities. 

Credits- 

Content- Ishita 

Infographics- Ketan Dedha

E-commerce sales boom this festive month

The share of online smartphone sales has increased exponentially in this Diwali season along with other electronic items such as televisions, air-conditioners as well as washing machines.

Fashion, as a category, is also expected to see a recovery this holiday season – in line with the outward movement of consumers.

October Month & The Sparkling Navratri:

The e-commerce shares in the sales pie hit a new high in the first two days of this month, market observers and companies say, in a few categories, including smartphones, consumer electronics, clothing and daily necessities, which are growing faster than last year.

The share of online smartphone sales has increased to about 60% in the first two days of Navratri-Dussehra from about 55%, the previous market tracker estimates Counterpoint Research has shown. Televisions have grown to 40% from 31% over the same period last year, while refrigerators, air-conditioners, washing machines and kitchen equipment increased to 9-10% from 6-8%, industry officials said.

With the advent of e-commerce growth, fewer customers from third-party cities have bought more expensive products online, said Panasonic India chairman Manish Sharma.

“Access, which is in line with Covid-19’s accelerated behavioral changes, is gaining momentum. For example, AC sales online this month have more than doubled last year, led by leading models,” said Sharma.

Festive Bells, E-Commerce & Devoted Shoppers:

Two major e-commerce markets, Amazon India and Flipkart-owned Walmart, have launched their holiday season sales events from October 2 and have been running longer in this regard than in previous years. They also offer top discounts within the first 2-3 days.

Even Tata Cliq, Reliance Digital and Croma have offered promotional offers in their online stores and apps, which has led to huge purchases through e-commerce organizations.

Market research company RedSeer Consulting said the online consumer base grew by about 20% this holiday season compared to last year, tier II markets accounted for about 61% of all consumers.

RedSeer estimates that almost Rs 68 crore smartphones were sold every hour on online platforms during the holiday sales season.

The rapid sale of e-commerce channels is due to falling prices in the e-commerce market, where consumers receive discounts of about Rs 2,000-3,000, said Avneet Singh Marwah, chief executive of SPPL, which sells the Thomson brand, Kodak and Blaupunkt. for online TV shows.

According to RedSeer, smartphones, TVs and electronic devices together form the largest online retail segment, accounting for 73% of gross merchandise value (GMV) across all platforms during the first week of sales online.

Daily Necessities, fashion

Fast-moving consumer goods and clothing companies also said the first two weeks saw a significant increase in online shopping, led by higher discounts.

During this holiday season, many e-commerce markets are paying attention to all categories equally, including the grocery store, instead of the usual focus on electrical and clothing items, says Krishnarao Buddha, head of the senior division at Parle Products.

“We have seen record growth in online channels, their contribution growing by 300 basis points compared to last year, which is largely driven by offers and deals. In fact, we are seeing an increase in orders for their sales events in December, which shows that online growth is steady,” said Buddha.

For consumer goods manufacturers, the share of online channels in all consumer goods has tripled since March last year, as closures have led to thousands of consumers clicking online to find what is important and what is not.

First Half of 2020 – The Retail Apocalypse!

Currently, e-commerce accounts for 6-10% of their total sales, compared to 3-5% last year.

“The growth of online commerce continues to be strong and in preparation for the Diwali festival season, which is in line with demand from major annual e-commerce tent events, has seen a steady decline in consumers over the past few weeks,” said Sanjeev Mohanty, managing director, South Asia – Middle. East and Africa, Levi Strauss & Co.

The online fashion store Myntra, owned by Flipkart, said its event attracted five million customers, placing eight million orders in categories.

“More than 2,600 over 300 brand stores in more than 40 cities participated in the Big Fashion Festival which offers more than 1.2 lakh styles in an eight-day event,” said Amar Nagaram, CEO, Myntra.

The fashion retail segment is expected to grow by 15-17% year-on-year between July 2021 and March 2022, which translates to an annual increase of 23-25% on FY22, said the credit rating agency ICRA in a recent report.

The headline ‘The Festive Season Pulse 2021,’ also states that 91% of Indian consumers are planning to shop during the upcoming holidays and six out of ten are interested in learning about new products during the holiday season sales.To boost this rise in consumer sentiment, the e-commerce segment is ready to launch its holiday blitz and is preparing to incorporate major season discounts in a few weeks.

In this 30-day period leading up to the holiday season, Myntra’s leading fashion e-commerce platform has organized a ‘Big Fashion Festival,’ which will be followed by the Myntra Diwali Sale, which focuses on ethnic dresses. On the technical side, the company aims to introduce a loyalty program led by gamification as it develops its Bewakoof nation with a new and special introduction of team members.

Second Half of 2020

Commenting on the platform’s ongoing programs, Prabhkiran Singh, CEO & Founder, Beewakoof.com said, “After the epidemic, we have seen strong recovery and growth in certain areas such as leisure and leisure clothing due to home-based customers and the epidemic is declining., bags, accessories, etc. for the upcoming holiday season.

At the industry level, Arora told us that e-commerce players benefit from doing things differently to build individual knowledge on the platform and AI-enabled chatbots used by online retailers to bring customers closer to the offline sales experience. of engagement.

Sharing the OLX program, Arora added, “This holiday season we plan to use new solutions by releasing the retail journey.

Fashion, as a category, is expected to see a recovery this holiday season – in line with the outward movement of consumers and fashion / office wear, RedSeer said.

The report found that retailers are very strong in sales this year and are looking to recoup losses incurred due to Covid.

About 80 percent of retailers surveyed said that holiday sales would play a major role in reversing Covid losses.

“We believe that the sale of online events for 2021 will continue to lead to greater digital usage based on macro usage and sense of use after the second wave of COVID has passed. Eighty percent of them believe that holiday sales will help them promote strong sales growth and recoup losses during Covid, “said Jjwal Chaudhry – RedSeer Consulting Associate Partner, he said.

Continuing with the above, RedSeer expects a strong 30 percent growth in the holiday sales week by 2021 to reach $ 4.8 billion in the largest GMV with growth in all categories, setting a solid e-commerce platform for 2021, he added.

Wrapping Up:

The E-commerce industry has had a direct impact on small, medium and micro enterprises (MSME) in India by providing funding mechanisms, technology and training and has had a positive impact on other industries. India’s trading industry has been on the rise and is expected to overtake the US to become the world’s second-largest E-commerce market by 2034. The technology has provided new capabilities such as digital payments, location planning, customer-driven customer analysis. and digital advertising is likely to support the growth of the industry. Growth in the E-commerce sector will also increase employment opportunities, increase foreign exchange earnings, increase tax collection by former inspectors, and provide better products and services to customers in the long run. The increase in smartphone use is expected to increase by 84% to reach 859 million by 2022.

The E-retail market is expected to continue its strong growth – registering a CAGR of more than 35% to reach Rs. 1.8 trillion (US $ 25.75 billion) in FY20. Over the next five years, India’s electronics industry is expected to exceed ~ 300-350 million consumers, pushing the Gross Merchandise Value (GMV) online to $ 100-120 billion by 2025.

CREDITS-

CONTENT- Harsha

INFOGRAPHICS – Aanchal