COMPANIES, P4 COMPANIES, P4 INTERNATIONAL, P3 KTM-Bajaj JV plans first twin-cylinder India bike Aakash 2.0: 250 new centres in the pipeline ‘Asian NATO’ backer Ishiba to become Japanese PM KOLKATA, SATURDAY, SEPTEMBER 28, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL 33 NO. 281, 16 PAGES, `12.00 (NORTH EAST STATES `13 & ANDAMAN `17.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 85,571.85 ▼ 264.27 NIFTY: 26,178.95 ▼ 37.10 NIKKEI 225: 39,829.56 ▲ 903.93 HANG SENG: 20,632.30 ▲ 707.72 `/$: 83.70 ▼ 0.06 `/€: 93.41 ▼ 0.20 BRENT: $71.42 ▼ $0.18 GOLD: `75,340 ▼ `62 CISCO SETS UP FIRST INDIA PLANT, TO CREATE 1,200 JOBS US TECH MAJOR Cisco on Friday inaugurated its first manufacturing facility in India at Chennai, setting into motion a multiyear investment plan, reports Narayanan V. The facility may create 1,200 jobs. ■ PAGE 5 EXCHANGES REVISE TRANSACTION FEES FOR CASH, F&O MKT STOCK EXCHANGES WILL lower transaction charges for cash and derivatives market segment from October 1 to comply with the Sebi rules, reports Vivek Kumar M. NSE will charge `3,503 each side per crore of premium value in equity options from October 1. ■ PAGE 6 FOREX RESERVES HIT RECORD, INCH CLOSER TO $700 BN INCHING CLOSER TO $700 billion, India's forex reserves jumped by $2.838 billion to a new high of $692.296 billion for the week ended September 20, from a new high of $689.458 billion in the previous week, reports PTI. DEBROY QUITS AS CHANCELLOR OF GOKHALE INSTITUTE ECONOMIST BIBEK DEBROY has resigned as Chancellor of the Gokhale Institute of Politics and Economics, a day after the HC extended interim relief to Vice-Chancellor Ajit Ranade, reports PTI. ■ PAGE 2 KARNATAKA AIMS TO CREATE 350,000 JOBS UNDER GCC POLICY KARNATAKA HAS LAUNCHED a draft global capability centres policy with the aim to generate $50-billion economic output and attract 500 new GCCs by 2029, creating 350,000 jobs, reports PTI. ■ PAGE 2 FE S P E C I A L S Has MG Windsor taken the Throne of the EV Game? Good pricing, spacious cabin, battery-as-a-service model, quirky design. ■ MOTOBAHN, P9 Buying health plan here can help NRIs It ensures direct claim settlements without any currency exchange issues ■ PERSONAL FINANCE, P9 PRASANTA SAHU New Delhi, September 27 TAXING TIME WITH MOSTSTATES notkeentoletgoofrevenues, the goods and services tax (GST) compensation cess will likely be retained beyond January 2026, by when the compensation-related loans and interestwould likely be fully repaid,sources said. However, the cess would be “re-branded” with a newly defined end use,an official said, addingthatthefinaldecisionwouldofcourse be that of the GST Council.Under the Constitution, a cess can be levied for specified purposes only, and the proceeds from such imposts should be creditedtoadesignatedfund. INSIDE According to an estiGoM PANEL mate, roughly `20,000 TO DECIDE crore per month would THE FUTURE be collected through the GST compensation cess OF CESS in a status-quo scenario ■ PAGE 2 by February 2026. The cess receipts were `12,068 crore for August 2024. Currently, assorted tobacco items, pan masala and aerated water are among the products that attract the highest GST rate of 28% and also the‘compensation cess’. The compensation cess can’t be merged into the highest GST slab of 28% slab, as it couldcreatemoreslabswhereastheintention is to reduce the existing fourslabs,the official added.Also,it is reckoned that the tax hike by merging cess with GST rate on these items wouldnotbepositivelyviewed,whilethecontinuation of the cess is more likely to be tolerated by those who are wont to it. ■ On an average `20,000 cr monthly cess likely to be collected in a status quo scenario from February 2026 ■ Compensation cess can’t be merged into the 28% slab as itwill create more slabswhereas the intention is to reduce the existing four slabs ■ Many states want the compensation period be extended by 2-5 years ■ Currently, there are four major GSTslabs – 5%, 12%, 18% and 28% ■ A clutch of 46 demerit and luxury goods in the 28% bracket also attract cess Also, the sources said, since the merged tax rate in many of the demerit items would exceed 40%, the GST Act would need to be amended as the current provisions limit the maximum GST rate at 40% (CGST and SGST 20% each). Continued on Page 7 Ageing fleet and seats hobble AI turnaround the plane as Air India looks to lure highspending travellers, added Wilson. Air India has alreadyplaced giant orders to upgrade its TWOYEARSAFTERTata Group took control fleet and just this month kicked off a $400of Air India, re-kitting an ageing fleet amid million plan to refit old planes. parts shortages and persistent flight delays The carrier’s restructuring after decades standinthewayof theairof decayis beingwatched by line's intent to become “a manufacturers and lessors, CAMPBELLWILSON, world class airline”. aswell as investors in SingaCEO, AIR INDIA Global shortages are poreAirlines,which is set to hurting plans for most own a 25% stake in the carGLOBAL PARTS airlines, but the problem SHORTAGES ARE HURTING rierfrom Novemberand has is “more acute” for Air agreed to invest an addiMOSTAIRLINES, BUTTHE India, CEO Campbell Wiltional up to $600 million in PROBLEM IS MORE ACUTE son said, as the carrier is the turnaround. nearing the halfwaymark “Air India has a long way FOR AIR INDIA of a five-year turnaround to go before being closer to plan but starting a generinternational standards for OUR PRODUCT IS ation behind rivals like which it needs to complete OBVIOUSLYA LOT MORE Dubai’s Emirates and the process of re-kitting DATED. WE'RE OPERATING with new and retrofitted QatarAirways. WITH ONE ARM TIED “Our product is obviaircraft,” Singapore-based ously a lot more dated. independent aviation anaBEHIND OUR BACK These aircraft haven’t had lyst Brendan Sobie said. a product refresh since Rebuilding Air India’s theyweredeliveredin sort reputation hinges on getof 2010, 2011.And so it's ting planes with top-notch more of an acute need for us,” CEO premium seats and service in the skies Wilson said in an interviewin Sydney. as fast as possible to lure flyers who are “Ifwe’ve got legacyseats and legacyinreluctant to book the carrier, even if it flight entertainment systems, we're offers non-stop flights on key interoperating with one arm tied behind national routes, due to poor our back,”he said. product and risk of delays. The challenges are the Continued on Page 10 biggest at the premium end of ADITI SHAH & JAMIE FREED New Delhi/Sydney, September 27 52.1 million SOFTWARE FACELIFT total claims for final PF settlement, transfer and withdrawal in 2022-23 13.4 million PRIYANSH VERMA New Delhi, September 27 PROCESSING OF CLAIMS by the Employees’ProvidentFundOrganisation(EPFO)has seen a sharp jump of about 30% year-onyearinAugust-September,thankstothelatest software upgrade by the world’s largest retirementfundbody’sdigitalplatform.The slowerpaceofclaimssettlementhadearlier caused much heartburn among the subscribers,includingthosewhosoughttoprematurelywithdrawpartoftheaccumulated funds to meet financialemergencies. AseniorofficialtoldFEthatthesoftware upgradation was completed six weeks ago. “Duringpeakhours,we’reseeingprocessing ofclaimshavenowdoubled(asagainstafew months ago),” the official said.“The EPFO is of the total claims or 25.8% were rejected in 2022-23 34% 37.7 million Rejection rates of EPF final settlement in 2022-23, from around 13% in 2017-18 expected to upgrade its hardware too, and furtherupgradeitssoftwareforthispurpose verysoon,” the person added. The Centre for Development of Advanced Computing (C-DAC), under the ministry of electronics and information technology (MeitY), has built EPFO’s new or 72.4% of the total claims were settled in 2022-23 software,whichishelpingitreducerejection of claims.As per official data, the rejection rates of EPF final settlement had surged from around 13% in 2017-18 to nearly 34% in 2022-23.It is nowmuch lower. Continued on Page 10 Household financial wealth soars Gross financial assets of households may have hit a new high at 157.9% of GDP in Q1FY25, according to Nikhil Gupta, economist at Motilal Oswal, ahead of the 152.9% seen in Q4FY21. At the same time, their financial liabilities (debt) are estimated to have touched 42% of GDP in Q1FY25, marking the highest level on record. This implies that their financial net wealth increased to an all-time high of 115.9% of GDP in Q1FY25 Gross financial assets of households have risen sharply Debt of households too has seen a steep increase HH GFA (% of GDP) HH debt (% of GDP) 172 45 157.9 154 136 125.3 110 118 100 35 123.4 FY07 30 28.7 25 Q1FY25 As such, the financial networth rose to an all-time high in 1QFY25 98 84 70 FY07 FY07 Q1FY25 Gross financial assets of households have increased faster post-Covid HH FNW (% of GDP) 126 112 42 40 115.9 THE STRONG FLOWS from FPIs and domestic retail investors' flight to the safety of large-cap stocks helped benchmark indices outperform the mid-cap and small-cap indices for the second week in a row, reports Vivek Kumar M. ■ PAGE 6 Boost from software upgrade, hardware being replenished too Pre-pandemic period* Post-pandemic period# (CAGR, %) 11.2 Gross financial assets 88.9 BROADER MARKETS FALTER FOR THE SECOND WEEK After FY26, GST cess may stay in new avatar EPFO gets smarter, claims settlement now 30% faster 77.7 NEWS IGST-LIKE MECHANISM LIKELY 96.6 IN THE 13.7 13.8 Debt Q1FY25 Source: RBI, MOFSL 17.1 10.2 Financial net worth 18.5 *Q4FY20 over Q4FY16 #Q1FY25 over 4QFY20 Steep US tariff hikes on EVs, batteries, solar cells kick in India braces for China shock 2.0 RAVI DUTTA MISHRA New Delhi, September 27 TAMING THE DRAGON ASTEEPHIKE in tariffs,including a 100% duty on electric vehicles, by the US on imports fromChinakickedinFriday,asthe world’s top economyalongwith India and a dozen other countries grapple with a rapid influx of goods — dubbed China Shock 2.0 — into global markets. The US tariff hikes also include a 50% duty on solarcellsand25%onsteel,aluminum,EV batteries and some minerals. The renewed wave of goods exports by China is not just driven by its ambition to moveuptheexportvaluechaintohigh-tech sectors such as solar equipment, electric vehicles and semiconductors; it nowcomes amidademandslumpathome,andisintensifying trade tensions internationally. India and several other countries have moved to impose a freshwave of anti-subsidymeasures,fearingarepeatoftheman- 100% 50% ■ India and a dozen other countries, including the US, have moved to impose a fresh wave of anti-subsidy measures ■ US imposes a duty on EVs and ■ They fear a repeat duty on solar cells on China ■ Imports from China crossed $100 billion in 2023-24 despite curbs imposed by India ufacturing job losses that occurred in the years since China joined the World Trade Organization (WTO) in the early 2000s.In 2024 alone, India imposed over 30 anti- of the manufacturing job losses that occurred in the years since China joined WTO in the early 2000s dumpinginvestigationsagainstChina,the most against any country. Continued on Page 7 BRANDS NOW OFFER REAL-TIME PERSONALISATION AND RECOMMENDATIONS When AI meets beauty, the wrinkles fade away S SHANTHI Bengaluru, September 27 WHEN HYPER-PERSONALISATION IS the name of the game, a clutch of startups as well as legacy players in the beauty and personal care (BPC) space are leveraging the advantages of artificial intelligence with a vengeance. Ifconsumerslovetheexperience, itisbecauseAIishelpingthemtolook better.Users can capture theirselfies from different angles and the AI model will process them to identify even the tiniest of problem areas. It will identify skin types, acne, dark spots, discolouration, dryness, unevenskin,wrinklesandpores,and offerreal-time recommendations. Purplle,for instance,uses an in- JOINING THE TECH BANDWAGON ■ SUGAR Cosmetics, Mamaearth, Purplle, Nykaa, Plum, MyGlamm and mCaffeine are leveraging AI tools house tech tool called The Purplle Skin Analyser which leverages AIpowered image recognition to analyse users’ skin conditions in real time. Vivek Parihar, head of startup SUGAR Cosmetics create a more interactive, efficient shopping experience ■ mCaffeine ■ Purplle uses in-house tech tool The Purplle Skin Analyser to analyse skin conditions in real time ■ Technology has helped beauty ■ Nykaa lets users see L’Oreal products via an advanced, Al-run virtual try-on tech called ModiFace engineering,Purplle told FE. The firm’s Smart CRM — customer relationship management — tool then uses machine learning to offerhyper-personalisedrecommen- and Hyphen use AI-run Kapture to help analyse consumer queries more effectively ■ Good Glamm saysAI and ML tools help pick rightwarehouse and logistics partners for quick order delivery dations.“It also takes into account customer behaviour,supported by a dynamic GPT-powered content libraryandautomatedjourneymapping to optimise customer interac- tions,” Pariharexplained. Similarly,L’Orealproducts,which Nykaa retails, enable consumers to viewproductsinanaugmentedreality (AR) experience through an advanced,Al-powered virtual try-on technologycalledModiFace.Thesoftwarecandetectfaceshape,skintone, haircolourandmore,andhasanaverage of88% accuracy. VineetaSinghofSUGARCosmetics says that technology has helped the team create a more interactive, efficient and enjoyable shopping experience, blending convenience with advanced digitalfeatures. Jasmin Gohil, chief technology officer of the company says,“We use anMLalgorithmthatsuggeststhings like say, people who have bought SUGAR Ace of Face foundation are more likely to purchase mascara, basedon theirpurchase history.” The enormous amount of data collected from consumers in the last 2-3 years is one of the primary reasons that these startups are able to update their technology frequently. Thedatasetsfromthousandsofindividuals are first analysed, either inhouse,or in some cases by third parties,and then labelled into different categories such as dry skin, pigmented skin, etc. AI technology is then deployed to look at newimages andidentifythealreadylabelledcharacteristics. The process has led to seamless analysisofnotjustskinproducts,but lip and haircare products aswell. Continued on Page 7 Kolkata