In this edition, we talk about the passing of former prime minister Manmohan Singh and how he reshaped the Indian economy. We also talk about how India is fast becoming the next big market for Apple, how foreign universities are flocking to the GIFT City, and the contours of the proposed Honda-Nissan merger.
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December is a month of revelry and joy, a month that marks not just the end of a calendar year but also the grand finale of a three-month-long festive season.
But this has been a December of difficult departures. This month, India lost three stalwarts who epitomized the country’s ethos and put India on a global pedestal through their work.
In the passing of tabla maestro Zakir Hussain, filmmaker Shyam Benegal and former prime minister Manmohan Singh, not only did India lose three good men of honor, but also a slice of her soul and perhaps even a part of her conscience.
The one thing in common that defined Hussain, Benegal and Singh was their understated humility and quiet genius. While Hussain and Benegal left their indelible mark on India’s cultural landscape, Singh’s moves, both as an economist-turned-bureaucrat and later as a reluctant politician, would go on to completely transform the Indian body politic.
Nobody could have imagined that the Sikh boy who was born in a mofussil village in pre-partition Punjab to a lower middle-class family will one day be recognized as one of the key liberalizers of the country’s economy, and then will rise to the most powerful executive position in the land, and, against all odds, remain at the helm for a decade.
In fact, in a career spanning more than six decades, Singh would go on to hold numerous significant public offices both in India and outside. He was one of a handful of individuals who transitioned seamlessly from being an academic to the top echelons of India’s bureaucracy, and then on to politics, holding the highest offices across each of these domains.
A gold medalist from Panjab University, Singh would go on to graduate as a Tripos scholar at the Cambridge University and later earn a doctorate from Oxford. In the following years, he would go on to teach at the prestigious Delhi School of Economics, before making a lateral entry into the annals of bureaucracy and rising to first becoming the finance secretary and then the governor of the Reserve Bank of India. He would then move on to the United Nations Conference on Trade and Development, before being made the Secretary General of the South Commission in Geneva.
In the early 1990s, as India faced an economic crisis, Singh returned and held several positions including the deputy chairman of the Planning Commission and the chairman of the University Grants Commission.
Another feather in his career came in 1991 when the then prime minister PV Narasimha, often considered India’s Deng Xiaoping, made Singh his finance minister and gave him a free hand in unshackling the Indian economy and opening it up to foreign capital and international competition.
The rest, as they say, is history, one that has been storied far too many times to merit a recounting here.
But, much like Winston Churchill, who won the second World War only to lose his office, in 1996, Rao’s government lost the people’s mandate and the world at large thought the epitaph on Singh’s political life had been written.
Eight years later, however, Singh would emerge as the unlikeliest of consensus candidates to lead a shaky coalition government of 28 parties, which few at that time thought would survive.
Still, he would go on to prove everyone wrong. Not only did he complete two full terms as prime minister, but he also showed his steely resolve by staking the very existence of his government on issues such as the India-US nuclear deal. Singh won the day and his government survived.
While his first term would be known for India’s accelerated economic growth, his second term was marred by a string of corruption scandals and a sense of policy paralysis—a combination of factors that eventually led to the rise of Narendra Modi on the national scene and the end of Singh’s political career.
Even as he walked into the sunset, Singh hoped that history would be kinder to him than what the media projected at the time. “I do not believe that I have been a weak Prime Minister… I honestly believe that history will be kinder to me than the contemporary media or for that matter the Opposition in Parliament… It is for history to judge what I have done or what I have not done,” Singh said during what was to become one of his last press conferences as prime minister.
History will indeed be kinder to you, sir.
So long, Dr. Singh.
India’s iPhone generation
More than three decades after Dr. Singh and his colleagues liberalized the Indian economy, we seem to have become indispensable to corporate giants like Apple, who are now increasingly dependent on the country’s market.
In fact, by 2026 India is expected to become Apple’s third-biggest market after the US and China, with 2025 likely to see as many as 15 million iPhones sold in the country. At present, India is Apple’s fifth-biggest market, with Japan coming in at the third spot and the UK at number four.
If such a surge does indeed happen, it will be a 20% uptick over the numbers sold in 2024, as Apple looks to pivot towards other emerging markets away from China. It has been forced to look elsewhere in a bid to offset the impact of an alarming shrinkage in market share in China, following the revival of the fortunes of local phonemaker Huawei. In the first nine months of the calendar year, Apple’s market share in China has declined by 10%.
Indians have been increasingly lapping up Apple products, especially iPhones, hereto considered out of their reach, thanks to the availability of easier financing options and steep discounts during festivals. Moreover, there has been a palpable shift in consumer preferences with people looking for premium products as their disposable incomes rise.
In fact, if news reports are to be believed, by the third quarter of 2024, Apple had already shipped 8.5 million units to India, which was more than the number shipped during the whole of 2023. The company thinks it will add as many as 4 million units to its sales in the October-December quarter. While metro cities like Mumbai, Delhi and Bengaluru remain the highest contributors to iPhone sales in 2024, a bulk of the incremental demand in 2025 is seen coming from smaller cities and towns.
Flocking to India
Phone makers like Apple are not the only ones vying for India’s markets. As Indians become more affluent, they want their children to get foreign degrees. Little wonder, then, that foreign universities seem to be making a beeline for setting up shop in India, and the Indian government seems to be only too eager to make it easier for them.
News reports say that at least two UK-based universities are keen on setting up offshore campuses in Gujarat’s GIFT City. Queen’s University, Belfast, and Coventry University have filed applications for setting up international campuses in GIFT City. Queen’s University, which plans to have 800 students at its campus, is following two Australian universities—the University of Deakin and the University of Wollongong—that have already set up campuses in GIFT City.
The International Financial Services Authority (IFSCA) had unveiled its International Branch Campus Regulations in October 2022, permitting Indian campuses of foreign universities to repatriate funds in a relaxed regulatory environment. As per the IFSCA’s regulations, the universities can undertake transactions in freely convertible foreign currency and will not have to abide by the infrastructure conditions that are applicable to other India-based universities within GIFT City. These foreign entities have been permitted to offer courses that include research programmes in financial management, fintech, science, technology, engineering and mathematics, a news report said.
So, why is this a significant development, you may ask? For one, it brings quality foreign education to India, and helps students earn a foreign degree right here in the country at a fraction of the cost and without the hassles of obtaining a visa and travelling far away from their families. Moreover, such a move could potentially help raise the overall standard of education in India, as such universities will hire local faculty, who would then be trained as per international norms.
Revving it up
Moving on to an international development that will also have domestic implications, Japanese automakers Honda and Nissan said this week that they are in talks to merge by 2026. Mitsubishi Motors, in which Nissan is top shareholder, may also join the group.
The announcement is historic for more reasons than one. It marks a big change in not just Japan’s but the world’s auto industry. It will be the biggest development in the global auto industry after Fiat Chrysler Automobiles and PSA combined to form Stellantis almost five years ago.
The merger of Honda, Japan’s No.2 carmaker, and Nissan, the No.3, will create the world’s third-largest automobile group by vehicle sales after Japan’s Toyota and Germany’s Volkswagen. South Korea’s Hyundai, along with its affiliate Kia, is currently the world No. 3.
The merger will create an auto giant with annual revenue of $191 billion and operating profit of more than $19 billion. More importantly, it will enable Honda and Nissan to share resources at a time when legacy automakers are facing a growing threat from newer rivals such as electric vehicle maker Tesla and China’s BYD.
Honda CEO Toshihiro Mibe admitted as much. “The rise of Chinese automakers and new players has changed the car industry quite a lot,” he said at a press conference. “We have to build up capabilities to fight with them by 2030, otherwise we’ll be beaten.”
To be sure, a lot of work remains pending before the two companies can combine. For one, there is Renault. The French automaker is Nissan’s biggest shareholder and the two companies share resources, including car platforms.
Renault has said it will consider “all possible options”, although former Renault-Nissan boss Carlos Ghosn—who famously escaped Japan in December 2019 by hiding in a music equipment box aboard a plane and is wanted for tax fraud—said the Honda-Nissan alliance won’t succeed as the two automakers are not complementary.
The merger could also affect the Indian auto industry. Honda, Nissan and Renault are among the smallest carmakers in India, with a total market share of just about 3.5%. The three companies have ceded ground in recent years to local companies such as Tata Motors and Mahindra & Mahindra as well as to Maruti Suzuki and Hyundai. But a combination may well help them revive their fortunes in India.
Market Wrap
It was a truncated trading week with stock markets remaining shut on Wednesday for Christmas. Both the benchmark indices—the BSE Sensex and the NSE Nifty—ended the week slightly higher after losing almost 5% each last week.
The 30-stock Sensex eked out a gain of almost 0.8% during the week while the 50-stock Nifty fared slightly better and rose nearly 1%.
Among the top Nifty gainers during the week were Mahindra & Mahindra, Tata Motors, Trent, Adani Ports and Special Economic Zone, Adani Enterprises and Dr. Reddy’s Labs. Others Nifty counters that also ended the week in the green included the likes of ITC, Eicher Motors, IndusInd Bank, Sun Pharma and Cipla.
Among the Nifty counters that ended the week in the red were Hero MotoCorp, Power Grid Corp of India, HCL Technologies, Titan, Tata Steel, State Bank of India, Asian Paints, JSW Steel, Infosys, and Larsen & Toubro.
Other Headlines
- India’s economy to grow about 6.5% in 2024-25, says government
- Growth trajectory set to pick up in October-March, says RBI
- Banks’ balance sheets remain strong, bad loans fall more: RBI report
- Govt plans to cut personal income tax to lift consumption, reports Reuters
- UltraTech Cement to buy 8.69% stake in Star Cement for Rs 851 crore·
- Sumitomo Mitsui Financial Group infuses Rs 3,000 cr into SMFG India Credit
- Transrail Lighting, Mamata Machinery, Sanathan Textiles, Concord Enviro, DAM Capital see bumper listings
- RBI may tighten criteria for top-up loans to mitigate risks
- Ola Electric announces opening of 3,200 stores amid consumer complaint woes
- Ampere e-scooter maker Greaves Electric Mobility files for IPO
- Mangal Electrical Industries files for IPO, to raise Rs 450 crore in fresh issue
- Indian Oil to invest Rs 61,000 crore to set up naphtha cracker in Odisha
- India’s space regulator gets nine applications to build and operate constellations of earth observation satellites
That’s all for this week. Until next week, happy investing!
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