Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: On June 4, Indian benchmark indices took a nosedive, driven by the absence of a clear electoral mandate. This resulted in the Nifty closing below 22,000, marking around 6% decline on result day.

BUSINESS

India's Travel Spending Set for 9% Annual Growth

What happened

According to a new McKinsey report, India's travel spending is expected to grow by 9% annually, thanks to strong GDP growth and a surge in domestic travel. The report, titled "The State of Tourism and Hospitality 2024," highlights that domestic air passenger traffic in India is set to double by 2030.

This growth is partly driven by a government initiative to connect underserved airports, shifting focus from major cities like Mumbai and Delhi to rapidly developing smaller cities such as Chandigarh and Hyderabad. The travel market in India is on track to become the fourth largest globally, overtaking Japan and Mexico by 2030.

Why it matters

The recovery and growth of the travel industry are significant for multiple reasons. After a dramatic 75% drop in 2020, the industry is expected to recover by the end of 2024 fully. Intraregional travel in Asia is increasing, with 60% of international trips currently within Asia, projected to rise to 64% by 2030.

This shift is similar to Europe’s travel market dynamics. A survey of over 5,000 travellers revealed a strong desire for travel, with 66% of respondents more interested in travelling now than before the COVID-19 pandemic. Younger travellers, particularly Gen Z and millennials, are driving this trend, taking more trips and allocating a larger portion of their income to travel compared to older generations.

Zoom out

India's travel industry is set for a significant boom, driven by a combination of economic growth and increased interest from younger travellers. As domestic air travel doubles and smaller cities gain prominence, the industry must adapt to cater to a diverse range of travellers. Luxury travel is also on the rise, with younger and affluent travellers prioritising loyalty programs. Overall, the travel landscape in India is evolving rapidly, presenting opportunities and challenges for the industry.

BIG MONEY MOVES

US-based Zeda plans $200 million expansion into India

US-based Zeda Holdings, known for 3D-printed orthopaedic implants, is gearing up for a major India expansion with a targeted $200 million fundraising. Zeda's entry strategy involves partnerships, joint ventures, and potential acquisitions in the Indian medical technology sector.. With a robust portfolio of 52 USFDA-approved products and a strategic focus on trauma implants in India's $8-billion orthopaedic implants market, Zeda aims to bridge the gap between expensive imports and local affordability.

Tata Motors Finance to merge with Tata Capital

Tata Motors has announced a merger between Tata Motor Finance and Tata Capital, a move approved by both boards. As part of the merger, Tata Capital will issue equity shares to Tata Motor Finance shareholders, giving Tata Motors a 4.7% stake in the combined entity. Tata Capital, a prominent NBFC in India with assets under management of Rs 1.6 lakh crore and over 25 product offerings, plans to expand its presence in commercial vehicle/passenger vehicle financing, offering innovative digital services. 

BUSINESS

Coal India's Arm Calls for Bids on 35 MW Solar Project

What happened

Central Mine Planning & Design Institute (CMPDI), a subsidiary of Coal India, has called for bids to develop grid-connected solar power projects totalling 35 MW. The projects include 23 MW, 5 MW, and 7 MW capacities, with bidders required to manage operations and maintenance for ten years. The bids necessitate an earnest money deposit (EMD) ranging from ₹3.1 million to ₹5 million, with submission deadlines in early July.

Simultaneously, India's coal production surged by 10.15% in May 2024, reaching 83.91 million tonnes (MT) compared to the previous year. Coal India Limited (CIL) contributed 64.40 MT, reflecting a growth of 7.46% from last year, while other entities witnessed a 32.76% increase, totalling 13.78 MT.

Why it matters 

CMPDI's initiative aligns with India's renewable energy goals, promoting solar power adoption and diversifying energy sources. The bids indicate a significant opportunity for companies to participate in sustainable energy infrastructure development.

The notable rise in coal production signifies continued robustness in India's energy sector, supporting various industries reliant on coal for power generation and operations.

Zoom out

As CMPDI accelerates solar project developments, the energy landscape in India is evolving towards a more sustainable and diversified future. The simultaneous growth in coal production underlines the country's multi-faceted energy strategy, balancing traditional resources with renewable alternatives to meet growing demand and environmental objectives.

BIG PICTURE

Toyota recalls over 100,000 US vehicles due to engine risk

Toyota announced a recall of more than 100,000 SUVs and pickup trucks in the United States. The affected vehicles include Toyota Tundra pickup trucks and Lexus LX600 SUVs equipped with the V35A six-cylinder engine. The National Highway Traffic Safety Administration (NHTSA) highlighted that debris from the manufacturing process could contaminate the engine, leading to main bearing failure and subsequent engine stalling, with a remedy currently in development.

TotalEnergies strikes major LNG deals with India and South Korea

French energy giant TotalEnergies has secured significant LNG supply agreements with Indian Oil Corporation and Korea South-East Power. Starting in 2026, TotalEnergies will deliver up to 800,000 metric tons of LNG annually to India for ten years.

Additionally, in 2027, South Korea will receive up to 500,000 metric tons annually for five years. Indian Oil Corporation, India's leading refiner, also has a long-term agreement to receive 1.2 million metric tons per year of LNG from ADNOC LNG starting in 2026 for 14 years.

BUSINESS

Vietnamese Imports Shake Up Indian Steel Market

What happened

Vietnamese steel imports are making waves in the Indian market, causing a stir among domestic manufacturers. Last week, a hot-rolled coil (HRC) consignment of 35,000 to 40,000 tonnes from Vietnam was booked at $590-595 per tonne cost and freight (CFR) basis. This is about ₹2,000-3,000 cheaper per tonne than domestic rates.

Formosa Ha Tinh, a Vietnamese steel producer recently approved by the Bureau of Indian Standards (BIS), is spearheading this influx. With domestic HRC prices at ₹54,000-55,000 per tonne, compared to the imported price of ₹51,700 per tonne post-Mumbai port charges, Indian steelmakers are feeling the heat.

Why it matters

The entry of cheaper Vietnamese steel has domestic manufacturers worried about their margins. Tata Steel’s Managing Director, TV Narendran, highlighted the issue, stating that these low-priced imports force Indian mills to slash their prices to stay competitive. This scenario has led to accusations of "dumping," where overseas producers offload excess stock at minimal profit or even a loss. 

India's steel import statistics underscore the challenge: imports surged to 8.3 million tonnes in 2023-24, surpassing the country's exports of 7.5 million tonnes. Vietnam contributed significantly, becoming the fourth-largest steel exporter to India, following South Korea, China, and Japan. The situation is exacerbated by Vietnam's inclusion in India's free trade agreement with ASEAN countries, preventing the imposition of tariffs to balance trade.

Zoom out

Industry experts suggest that aligning domestic steel prices with global rates might curb this influx. As the dust settles post-elections and the future of infrastructure spending becomes clearer, the true impact on the domestic steel industry will unfold. Until then, Indian manufacturers must brace for the continued challenge of competing with these low-cost imports.

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