Latest news with #GoI
Time of India
a day ago
- Automotive
- Time of India
Tryst with EVs
More than three decades ago, India saw an automobile revolution unfolding. GoI's pro-liberalisation policy thrust, which subsequently led to the opening up of the market, helped create an entire manufacturing ecosystem, making it possible to produce quality and affordable passenger cars. This enabled millions of Indians to fulfill their dream of owning a car. Today, personal mobility in India – and the world – is poised on the threshold of a tectonic transformation. It is now a globally acknowledged fact that reducing reliance on fossil fuels by replacing vehicles running on conventional internal combustion engines (ICE) with EVs is the need of the hour. Furthermore, for a country like India that has abundant sun, wind and water for RE and enough coal for thermal power, there is an absolute need to become self-reliant and stop importing millions and millions of barrels of oil. While government support has played an important role in creating a market for EVs so far, a 2023 McKinsey survey suggests that consumer preferences are also now driving the demand for electric cars. More than two-thirds of customers in the survey considered buying an EV as their next car purchase. The market is responding to this emerging EV demand. Car manufacturers in India are making considerable efforts towards designing and manufacturing EVs that are safe, comfortable, and offer quality features and style as preferred by Indian customers. Original equipment manufacturers (OEMs) are also building charging infrastructure at a record pace to ensure that the EVs have uninterrupted and adequate power supply. As of FY25, there are about 25k charging stations in India, a 2x growth since last year. With over 50 mn passenger cars on the road, India is now the third largest passenger car market in the world, behind China and the US. The Indian PV market is expected to grow at 6-7% CAGR over the next 5 years, adding 5-6 mn cars a year. It is the need of the hour for a significant portion of these cars to be EVs. Not only are EVs better for our planet and air quality, but also for our current account, reducing our dependence on imports in a meaningful manner. It is encouraging to see that India is taking important policy strides to enable EV adoption. The government has given generous subsidies, such as the FAME (Faster Adoption and Manufacturing of EVs) scheme and lower GST rates, on EVs to stimulate consumer demand. Incentives to boost the manufacturing of batteries for EVs have also been provided. Moreover, OEMs, as a community, are working together to further EV awareness and adoption. Another effective policy measure is the corporate average fuel efficiency (CAFE) norm that mandates OEMs to manufacture more fuel-efficient vehicles, thereby limiting the carbon dioxide emitted by the total fleet produced by them in a year. Manufacturing and selling more EVs—which have zero tailpipe emissions compared to petrol or diesel cars—allows OEMs to comfortably meet their annual CAFE mandates. GoI is now seeking to strengthen CAFE norms in existence since 2022, with an updated version that aims to significantly improve the fuel efficiency benchmark in India. Such a move will be a major turning point, as it will spur more carmakers to make an aggressive shift towards EVs, helping the ecosystem grow. Also, faster EV adoption will help create economies of scale, thereby improving the global competitiveness of India's auto industry. According to estimates, India's passenger EV market is expected to grow to 1.0 mn vehicles by 2030. Companies at the crossroads of clean mobility and energy view electric vehicles not just as a technological shift, but as a strategic win for business, the economy, and the planet. This is the foundation of their commitment to the growth of the EV ecosystem in India. But unlocking their full potential will require collective and collaborative action—from both GoI and the entire manufacturing ecosystem. Policy interventions such as CAFE and other supply-side mandates to manufacture more EVs have played and will continue to play a critical role in this journey.
Economic Times
2 days ago
- Business
- Economic Times
Markets powering big corp engines
Top-tier companies are borrowing more from capital markets , adding to disintermediation of banks that are facing a diversion of household savings away from deposits into equities and debt. There are cyclical and structural factors at play here. Companies have deleveraged heavily and are finding adequate interest from investors for their equity and debt issues. The demand for corporate credit has also slowed on account of a delayed revival in private investment. Capacity addition by industry remains tepid despite GoI's rapid infra buildup. On their part, banks, too, are tapping the markets on the strength of their balance sheets. Yet, deposit growth trails lending to households as fiscal and monetary policy adjusts to prop up consumption. This is restricting banks' access to cheap money that would make their corporate lending competitive.A deepening corporate debt market is a healthy development. It frees up bank credit for small enterprises that would otherwise have been subsidising their big rivals. The strong interest in IPOs of small companies suggests an eventual growth in bank lending to this segment. The harmonisation of the regulatory structure for banks and shadow lenders should push credit demand in the direction of the former. The process aids in strengthening bank lending by reducing concentrated exposure to big borrowers. It also imposes competitive intensity into a system that had worked itself into a bad loan crisis a decade are now doing business differently through improved risk management that will keep them in the reckoning. Banks have entered other areas of finance such as insurance and MFs and are yet to unlock value in their subsidiaries. Companies grow relatively slowly in India, limiting their ability to raise cheaper debt from the capital market. The funnel of small enterprises is widening as larger sections of the economy formalise. Rising incomes will keep credit demand strong from households. Indian banking is in a sweet spot; it must keep adapting to the evolving economic landscape.
Economic Times
2 days ago
- Business
- Economic Times
US bets $400 million on rare earth champion; Should India rethink its industrial policy?
Agencies MP Materials is not an American company that many would have heard of. It is the only integrated rare earth producer in the US, covering the entire value chain from mining to processing and magnet production. Last week, the US invested $400 mn in it, an attempt to use industrial policy to counter China's might in rare earths. Economics 101 frowns on the use of industrial policy - that is, government 'picking winners'. But it can work if used judiciously. India can learn, particularly from the US experience. In the current mood of de-globalisation and associated economic nationalism, industrial policy has become a global buzzword. But there is a great danger in applying it indiscriminately, particularly in a country like India, which has a long history of largely unsuccessful industrial policy. The fact is that India still does not have a global champion. The key to success lies in three principles: use only for select sectors, front the private sector, and ensure that the supported firms are competing globally. India has often flouted all three. In the most strategic sectors, it is usually the public sector that gets preference. India's industrial policy is oriented towards protection, creating firms or industries that serve the domestic market but are not competitive globally. In the US context, Trump's tariff bluster and blitzkrieg are not industrial policy. They represent a mercantilist strategy to reduce America's trade deficit. They are a political strategy to address key political constituencies. But it's not industrial policy. What the US is doing with MP Materials is. The US government has, for long, supported sectors that are hi-tech or inputs to hi-tech (critical minerals and rare earths in today's world). America's defence manufacturing industry (all of it privately owned) is what it is because of state procurement, an underrated instrument of industrial policy. The rise of SpaceX also owes a great deal to procurement by Nasa. The development of the internet also happened courtesy of R&D spending committed by the US. In India, this is another aspect of industrial policy that is under-recognised and under-funded. Direct state investment in firms is another MP Materials, the US government is now the largest shareholder with a 15% stake, but it allows the company to remain in private hands and function independently. And, in most cases, the goal is to create best-in-the-world companies/industries that can dominate all markets, not just the has a legacy of central planning, like China. While much has changed post-1991, the legacy of central planning lives on - most tellingly via 250-plus PSUs. These are usually given preferences, particularly in strategic sectors. GoI has not moved ahead with privatisation, but at least in defence, there is now a deliberate, welcome attempt to encourage private sector participation. But a challenge long as PSUs exist, GoI will always have to give them business, even when private sector companies are more efficient. In natural resources, GoI gives preference to PSUs (they don't always have to compete in auctions, for example). Even in the race to acquire overseas mineral assets, GoI prefers this un-level playing field, PSUs don't have an incentive to be efficient, while the 'competing' private sector bears the cost. GoI also spends resources propping up PSUs with little future, like BSNL, instead of supporting productive firms and R& also overextends itself. PLI, for example, is a good scheme. It trusts the private sector and has worked well in electronics. But there is less evidence of it working in other sectors. It's better to focus on one or two sectors than spread the greatest challenge for India is to change the mindset from creating firms that produce for India to firms that sell to the world. For this, reliance on protectionist measures like trade barriers must go. GoI should insist that it will only support firms that will be global winners. The writer is chief economist, Vedanta. (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. From near bankruptcy to blockbuster drug: How Khorakiwala turned around Wockhardt Paid less than plumbers? The real story of freshers' salaries at Infy, TCS. What if Tata Motors buys Iveco's truck unit? Will it propel or drag like JLR? As deposit ground slips under PSU banks' feet, they chase the wealthy If data is the new oil, are data centres the smokestacks of the digital age? Stock Radar: M&M likely to break out from 1-year consolidation range; time to buy? Will consumer stocks see a comeback this festive season? 12 stocks to keep an eye on even when analysts are not bullish Don't fear volatility, focus on businesses: 5 mid-cap stocks from different sectors with upside potential of up to 27% Best way to deal with volatility, just ' Hold' for wealth creation: 7 large-cap stocks with an upside potential of up to 41%
Economic Times
2 days ago
- Automotive
- Economic Times
Tryst with EVs
iStock More than three decades ago, India saw an automobile revolution unfolding. GoI's pro-liberalisation policy thrust, which subsequently led to the opening up of the market, helped create an entire manufacturing ecosystem, making it possible to produce quality and affordable passenger cars. This enabled millions of Indians to fulfill their dream of owning a car. Today, personal mobility in India – and the world – is poised on the threshold of a tectonic transformation. It is now a globally acknowledged fact that reducing reliance on fossil fuels by replacing vehicles running on conventional internal combustion engines (ICE) with EVs is the need of the hour. Furthermore, for a country like India that has abundant sun, wind and water for RE and enough coal for thermal power, there is an absolute need to become self-reliant and stop importing millions and millions of barrels of oil. While government support has played an important role in creating a market for EVs so far, a 2023 McKinsey survey suggests that consumer preferences are also now driving the demand for electric cars. More than two-thirds of customers in the survey considered buying an EV as their next car purchase. The market is responding to this emerging EV demand. Car manufacturers in India are making considerable efforts towards designing and manufacturing EVs that are safe, comfortable, and offer quality features and style as preferred by Indian customers. Original equipment manufacturers (OEMs) are also building charging infrastructure at a record pace to ensure that the EVs have uninterrupted and adequate power supply. As of FY25, there are about 25k charging stations in India, a 2x growth since last over 50 mn passenger cars on the road, India is now the third largest passenger car market in the world, behind China and the US. The Indian PV market is expected to grow at 6-7% CAGR over the next 5 years, adding 5-6 mn cars a year. It is the need of the hour for a significant portion of these cars to be EVs. Not only are EVs better for our planet and air quality, but also for our current account, reducing our dependence on imports in a meaningful is encouraging to see that India is taking important policy strides to enable EV adoption. The government has given generous subsidies, such as the FAME (Faster Adoption and Manufacturing of EVs) scheme and lower GST rates, on EVs to stimulate consumer demand. Incentives to boost the manufacturing of batteries for EVs have also been provided. Moreover, OEMs, as a community, are working together to further EV awareness and effective policy measure is the corporate average fuel efficiency (CAFE) norm that mandates OEMs to manufacture more fuel-efficient vehicles, thereby limiting the carbon dioxide emitted by the total fleet produced by them in a year. Manufacturing and selling more EVs—which have zero tailpipe emissions compared to petrol or diesel cars—allows OEMs to comfortably meet their annual CAFE is now seeking to strengthen CAFE norms in existence since 2022, with an updated version that aims to significantly improve the fuel efficiency benchmark in India. Such a move will be a major turning point, as it will spur more carmakers to make an aggressive shift towards EVs, helping the ecosystem grow. Also, faster EV adoption will help create economies of scale, thereby improving the global competitiveness of India's auto industry. According to estimates, India's passenger EV market is expected to grow to 1.0 mn vehicles by at the crossroads of clean mobility and energy view electric vehicles not just as a technological shift, but as a strategic win for business, the economy, and the planet. This is the foundation of their commitment to the growth of the EV ecosystem in India. But unlocking their full potential will require collective and collaborative action—from both GoI and the entire manufacturing ecosystem. Policy interventions such as CAFE and other supply-side mandates to manufacture more EVs have played and will continue to play a critical role in this journey. (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. From near bankruptcy to blockbuster drug: How Khorakiwala turned around Wockhardt Paid less than plumbers? The real story of freshers' salaries at Infy, TCS. As deposit ground slips under PSU banks' feet, they chase the wealthy If data is the new oil, are data centres the smokestacks of the digital age? Stock Radar: M&M likely to break out from 1-year consolidation range; time to buy? Will consumer stocks see a comeback this festive season? 12 stocks to keep an eye on even when analysts are not bullish Don't fear volatility, focus on businesses: 5 mid-cap stocks from different sectors with upside potential of up to 27% Best way to deal with volatility, just ' Hold' for wealth creation: 7 large-cap stocks with an upside potential of up to 41%
Economic Times
3 days ago
- Business
- Economic Times
Air pollution norms went up in smoke
Bringing a decade-old tussle to a close, MoEF last week scrapped its 2015 norms for SO₂ emissions from coal-fired power plants (CFPPs), the chief source of these emissions. The rollback is significant given the country's reliance on coal, and it plans to add 80 GW of capacity by 2031-32. The country has been the world's top SO₂ emitter since 2017. Following this decision, NTPC asked BHEL to halt flue gas desulphurisation (FGD) installations at five under-construction CFPPs after GoI exempted most thermal plants from FGD requirements. As of February, 537 thermal units totalling 204 GW capacity were identified for installation of FGDs. The rollback raises key questions on the role of science in policymaking, the priority given to environmental and human wellbeing and gaps in regulation. MoEF claims its decision is 'based in science', suggesting the 2015 norms were not. The new rules classify SO₂ as a pollutant based on geography, not plant size or emissions. About 11% of plants-those within 10 km of Delhi-NCR or million-plus cities-must install FGDs by December 2027. Another 11% may or may not, depending on an expert review committee. Ambient air quality now takes precedence over pollution-at-source, which National Clean Air Programme (NCAP) had emphasised. None of the studies cited for the new rules were commissioned by the environment ministry. Weak implementation of continuous emissions monitoring made it difficult to challenge the rollback with source-level data. The real roadblock was who would foot the desulphurisation bill. Studies peg the cost at ₹0.5-1 crore/MW, adding ₹0.25-0.75/kWh to tariffs. Instead of addressing whether this cost would be passed on to consumers or subsidised, GoI returned to the old binary of cost versus environmental and human health.
