Ministers in former UPA government say aviation policy lacks implementation plan
The ministers in the former United Progressive Alliance (UPA) government criticised the first-ever policy on aviation, saying it lacks crucial requirements and falls short of an implementation plan, a day after the National Democratic Alliance (NDA) government announced the policy. The two significant announcements in the policy are — replacement of five years and 20 aircraft international flying norms with 0/20 or 20%, whichever is higher, and introduction of regional flights at a fixed fare of Rs 2,500/hour. ET spoke to former aviation ministers Praful Patel and Ajit Singh, trying to pick their brains on the new initiatives. While Patel said that the policy lacks vision on the execution of key announcements, Singh termed it a missed opportunity. “While the concept of regional flights at Rs 2,500 per hour is good as newer cities will be connected, there will be many challenges of execution, which the government has not factored in, it seems,” Patel said. He, however, praised the decision to replace the 5/20 norm with a new lenient one, saying it is a welcome step. “Times were different when 5/20 was introduced and the change is in continuity with the change, as the sector has grown exponentially,” he explained. Notably, Patel was the aviation minister when the 5/20 formula was introduced in 2004, and the 0/20 norm to replace 5/20 is believed said to have been suggested by Patel himself in one of the consultative committee meetings, which discussed the aviation policy. Singh said the policy has not touched upon important issues such as the formation of Civil Aviation Authority (CAA) to replace the Directorate General of Civil Aviation (DGCA). “Formation of CAA was recommended by all committees formed in the country to suggest measures to improve the aviation sector. Not just that even International Civil Aviation Organisation (ICAO) had recommended it. During my tenure, it was even cleared by the parliamentary standing committee. The policy does not say anything on it,” Singh said. Blidi Wreh-Wilson Jersey
GMR Infra not to sell controlling stake in Hyderabad Airport
GMR Infrastructure today denied selling controlling stake in Hyderabad Airport but added that it is exploring opportunities to raise funds. “We completely deny sale of controlling stake in Hyderabad Airport. We wish to submit that GMR Group has been continuously exploring opportunities to raise necessary funds for the group,” GMR Infrastructure said in a clarification to the BSE. The company was reacting to speculations about the company being in advanced negotiations regarding sale of controlling stake in Hyderabad Airport. For the quarter ended March 31, 2016, the company reported a consolidated net loss of Rs 953.5 crore as against a net loss of Rs 891.9 crore in the year-ago period. Its total income from operations rose 29.12 per cent to Rs 3,708.37 crore during the quarter from Rs 2,872.01 crore in the year-ago period. Yovani Gallardo Authentic Jersey
E-tailers won’t be able to push brick-and-mortar businesses towards irrelevance
In recent years, showrooming — the consumer looking up products at a store and then buying them online at discounted prices — has become a trend, a cause of concern for most retailers, particularly those dealing in electronic goods. Some store owners view this as an unfair practice, one that may hurt their profits. While it is true that online stores, or e-tailers, can afford to sell products at discounted prices — as their infrastructure costs are only a fraction of what retail stores incur — it’s unlikely that the e-tailers will push the brick-and-mortar businesses towards irrelevance. On the contrary, showrooming might just be the shake-up the retail industry needs to explore. This phenomenon is quite prevalent in the US market. It is evident that consumers, even today, see value in checking out products for themselves before they buy online. If their experience at the store is good enough, they are likely to be influenced to make a purchase. Retail stores provide value to the customers. People would most definitely miss the in-store experience if they ceased to exist. And the absence of these stores would affect the product manufacturers who depend on brick-and-mortar retailers to showcase their products to consumers. Without these stores, these manufacturers would have to set up their own stores, a very expensive proposition. This is an important fact, and it would only be reasonable for retailers to charge manufacturers a fee in return for showcasing their products and offering consumers the chance to experience them first-hand. If this pay-forspace system were to be established, stores could even match the online prices for certain product categories and brands. Brands can use this model to their advantage and showcase their latest, best and most innovative products in-store. Alternatively, they can create mini stores within the store to augment the brand experience. Both the options help them create and offer in-store experiences for consumers that the online stores cannot offer. This new retail model could effectively shift the focus from sales to shopping experience. From a manufacturer’s standpoint, it doesn’t really matter whether sales happen offline or online. The important thing is that the brands and products are visible and accessible to consumers. When the world’s largest online retailers started offering huge discounts on all categories of products, their success emboldened others to follow suit, across markets in the world. However, it has now become apparent that this model is not sustainable. The focus of these e-tailers is gradually shifting towards building trust and offering greater convenience to consumers via delivery and reverse logistic services. As things stand now, such online stores are not necessarily the lowest price points to find a product any more and we can see this in many markets, including the US. It is important to note that price is not the only consideration when people buy products. They appreciate guidance in making an informed choice, prefer to experience the product before buying, and expect good service, both before and after sales. All of this is possible in the physical realm, much more so than it is online. Physical presence has other benefits too. Unlike online retailers, who need to set up warehouses at a significant additional cost, offline stores can double as demand fulfilment centres. In fact, brick-and-mortar stores can serve as an excellent means for e-tailers to tap into the ‘hyperlocal’ market opportunity. It could be a win-win situation for both if the businesses were integrated at necessary levels. Online and offline are merely two facets of the retail business: conflicting yet complementary. Brick-andmortar stores can always choose to create a seamless online extension. In-store showcasing of products can lead to an experience that will help attract the consumer towards purchasing the products. Consumer experience is of utmost importance and can be a primary factor driving sales. Robin Yount Authentic Jersey
Bangladesh, India launch transshipment operations
ndia and Bangladesh on Thursday launched transshipment operations at the Ashuganj port to boost trade and facilitate seamless movement of goods in the landlocked region, with a cargo vessel unloading the maiden consignment to be transported to Tripura through Bangladeshi territory. Bangladesh’s Shipping Minister Shahjahan Khan launched the operation at Ashuganj port in central Bangladesh, where 1,000 tonnes of iron and steel sheets were unloaded to be trans- shipped to Tripura through Bangladesh territory in trucks. Prime Minister Sheikh Hasina’s Economic Affairs Adviser Mashiur Rahman, Indian High Commissioner in Dhaka Harsh Vardhan Shringla, Bangladeshi lawmakers and senior officials witnessed the inaugural ceremony. Transiting goods Under a revised protocol on Inland Water Transit and Trade as part of a bilateral agreement signed during Prime Minister Narendra Modi’s visit to Dhaka in June last year, India and Bangladesh agreed to let each other use their territories for transiting goods to a third country. The deal would enable Bangladesh to use Indian territory to transport goods to Nepal and Bhutan while on the other hand India would access Myanmar by crossing through Bangladesh. Under the arrangement, vessels carrying Indian cargos would unload at Ashuganj port, from where Bangladeshi trucks will carry the goods to Tripura to be delivered at the Akhaura checkpoint, the second largest trading point between India and Bangladesh after the Benapole-Petrapole post with West Bengal. India had long been seeking transit and transshipment facility to carry goods to Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura, from West Bengal through a shortened route via Bangladesh. At present, trucks from Kolkata travel around 1,600 km to reach Agartala. The distance through Bangladesh would be only 500 km, according to experts. According to analysts, it costs India $67 to transport per tonne of goods from Kolkata to Agartala and Indian trucks take 30 days to reach there through the rugged terrains. The transshipment facility — combining riverine and land routes — would now enable India to deliver goods in an estimated 10-day time and reduce transport cost by nearly 50 per cent. Albert Wilson Jersey
Nitin Gadkari may meet Iranian counterpart Abbas Akhoundi in a bid to hasten Chabahar project
Shipping and roads transport minister Nitin Gadkari is likely to meet his Iranian counterpart Abbas Akhoundi next month in an effort to fasttrack the development of strategically important Chabahar port. The agenda of the meeting, for which venue and date are yet to be finalised, would be to expedite the work on development of the port through India’s investment and also set up industries within the port. India wants Iran to provide substantial land in the Chabahar SEZ for setting up of petrochemicals, fertilizer and other gas-based industries by Indian companies. Iranian ambassador to India Gholamreza Ansari met Gadkari at his office in Transport Bhawan on Thursday to review the plan. “Both ministers are scheduled to meet in July to work on the implementation of the plan for development of Chabahar port. They will also chart out the road map of port-led development in the area,” said a senior government official. “The venue and the dates for the meeting are yet to be formalised,” the official said. In May, India, Afghanistan and Iran had signed the trilateral trade treaty for developing the Chabahar port. The ministerial level agreement was signed in Iran in the presence of Prime Minister Narendra Modi, Iranian president Hassan Rouhani and Afghan president Ashraf Ghani. The strategic location of the port will allow India to access Central Asia through Afghanistan by skipping Pakistan. India would invest $500 million to develop the strategically important port, close to Iran’s border with Pakistan. The deal envisages development and operation for 10 years of two terminals and 3 berths at the port with cargo handling capacities. India will take 18 months to complete phase one of the construction. The port will be connected to Zahedan on the Iran-Afghan border through a railway line, which will also be built by Indian construction company IRCON. The port will also be used to ship crude oil and urea, saving India transportation costs. It will also cut transport costs and freight time for India to Central Asia and the Gulf by about a third. Terry Bradshaw Authentic Jersey
Price war in ecommerce? Amazon cuts its referral fee by 1-7% on few categories
Amazon India has cut the fee it charges sellers using its platform on select items by up to 7% just three days before rival Flipkart is to implement an increase in its seller commission, possibly triggering a fresh round of price war in the country’s ecommerce space. Amazon has cut its referral fee by 1-7% on some categories including personal computers, mobile devices and tablets, electronics, movies, music, video games, video game consoles, non-educational and educational software, musical instruments and personal care appliances with effect from June 17, the company told its sellers in an email late on Wednesday. Sellers on Amazon’s platform are expected to pass on the benefits of reduced cost to the consumers. The move comes at a time when several sellers on Flipkart have threatened to quit or become inactive on the platform due to the hike in commission on several products with effect from June 20. “Yes, we lowered the rates for certain categories. We think these revised rates can significantly help sellers to perform even better and succeed in their business,” said an Amazon India spokesperson. Flipkart did not respond to an email with queries as of press time Thursday. Ecommerce companies have different fee structures. While Amazon has two components called referral fee and fixed fee, Flipkart has three – commission, fixed fee and collection fee. This is besides logistics or shipping charges, which vary depending on different warehouse and logistics services used by a seller. Amazon’s latest move is partly a rollback as it had recently increased referral fees on several categories. It, however, has not reduced the fee on apparel, fashion, lifestyle, home improvement and some other categories that had seen a fee increase. The development is expected to help Amazon undercut rivals such as Flipkart and Snapdeal, as most home grown ecommerce platforms are under pressure from investors to reduce their cash burn rate and work towards profitability. Amazon is under no such pressure. In fact, its founder Jeff Bezos recently announced a further $3 billion investment in India. “The market is getting tough now. While one is looking at growth, the other is aiming profitability. Snapdeal and Flipkart have investor pressure to make money while Amazon isn’t. They are still after getting more market share,” said Harminder Sahni, founder of Wazir Advisors. “The metrics is different for Indian and international players.” Sellers have welcomed Amazon’s decision to cut commissions. “Amazon has taken a big call in reducing commissions, which has gone down by 25% on average. They have reduced commissions for all high GMV products,” said Sanjay Thakur, president of eSellerSuraksha, a group of online sellers. A spokesperson of All India Vendors’ Association (AIOVA), which is a group of 1,000 medium to large sellers on several online platforms, said, “Amazon first increased commissions, now they are revising. This could have been avoided if they would have taken sellers advice before taking any such steps. Marketplaces should understand that we need to coexist in order to survive.” Jay Bouwmeester Authentic Jersey
Amazon India moves High Court against Gujarat entry tax
Amazon India has moved the Gujarat High Court against an entry tax the state has levied on goods purchased through ecommerce portals and delivered from outside the state. Amazon is “challenging the definition and the very concept” of this tax imposed in March, a person familiar with the case said. “Now, in this case, Amazon is only a facilitator and only arranging the buyers and the sellers on the portal, and is neither the importer nor the consumer, and the company as such has nothing to do with the goods. It is not a case where Amazon is purchasing and selling,” the person told ET on condition of anonymity. “The tax should be applicable to anyone who is importing items.” Amazon had not responded to an email from ET seeking comments on the lawsuit as of press time on Wednesday. The country’s largest ecommerce marketplace Flipkart has already filed a case in the same court against the tax. India’s booming ecommerce business has lately been impacted by entry taxes levied by a number of states including Uttar Pradesh, Assam, Odisha, Uttarakhand, Rajasthan, West Bengal, and Mizoram on goods purchased through ecommerce portals and delivered from outside the state, citing loss of revenues. This has prompted ecommerce companies to virtually stop delivering products from outside in many of those states. “We are mere intermediaries in the value chain and, ideally speaking, we should not have been taxed,” said a senior executive of one of the largest ecommerce firms. “Ecommerce companies are organised entities, so instead of chasing multiple sellers it is easier to find the ecommerce companies. They are catching the easiest neck,” the person said. Dr A Didar Singh, secretary general at Federation of Indian Chambers of Commerce and Industry (Ficci), said, “Any special tax that is ecommerce specific will result in negating the benefits to Indian MSMEs and also to end-consumers at large, as the increase in taxes will ultimately make the goods more costly.” He said that this entry tax is unlikely to expand states’ revenues, “but will prove to be a major barrier to the inter-state trade”. Besides Gujarat, Flipkart has challenged such taxes in Uttarakhand and West Bengal as well. Gujarat passed a bill to levy entry tax on ecommerce purchases from outside the state, saying it would ensure level-playing field between online and offline retailers. Jermon Bushrod Authentic Jersey
Private equity funding into startups dips 25% in 2016: Goldman Sachs
Private equity funding has declined by 25% year-on-year from $2.5 billion in 2015 to $1.9 billion in 2016, said a recent report by a global research firm, Goldman Sachs. While the number of deals has picked up by 52% year-on-year in 2016, the average deal size has declined by 51% to $4.3 million. In 2015, India witnessed over $8.4 billion of private equity funding into startups, a dip from $6 billion in 2014. Capital flows primarily started ebbing after peaking at $4bn in the third quarter of 2015. The slowdown in the amount of private equity capital inflows into Indian startups in series B/C rounds is forcing startups to lower cash burn rates and also restructure operations to focus on profitability, it said. However, the companies which have attained scale in their operations are being able to raise capital smoothly. “The newer ones are finding it more difficult,” it said. “Forced consolidation has led players with stronger balance sheets/scale to acquire the weaker companies in some cases,” said the report, According to the report dated June 15, 2016, Indian ecommerce has received healthy capital inflows of over $8.4 billion in 2015 compared to $6 billion in 2014. Globally the ecommerce market is expected to grow at 20% primarily driven by China and India in the next three years. By 2020, Indian ecommerce market is estimated to touch $100 billion on the back of the increase in consumers’ willingness, occasion to spend online and increase in mobile internet access. Ecommerce penetration in India was 3.9% of the total retail in 2015, while globally it averaged at 8%. Ecommerce companies are shifting focus to profitability due to changes in the FDI guidelines for online marketplaces in India and relatively slower capital inflows. Online players are now moving away from discounts to gain market share and looking at providing unique services. With the venture environment rationalising and larger companies subsuming resources, India now appears to be entering a phase of consolidation, said the report. Vegas Strong Jersey
Amazon incentivizes sellers, puts pressure on Flipkart
Amazon India has cut its own commissions by 25-30% in key categories such as mobiles, PCs, electronic devices, and personal care appliances. This may put the American e-commerce giant’s local arm at an advantage over rival Flipkart, which recently increased its commissions across key segments and also asked sellers to bear the costs of logistics in case of returns. In a communication to sellers, Amazon India has said that its latest policy changes will be effected from June 17. Amazon has reduced its commission for mobile devices and tablets to 3.5%, from about 5.5%, and for desktops and laptops to 3%, from 4%. Electronic devices too have seen a change similar to that of PCs. Electronic devices and mobiles are one of the highest selling categories for companies like Flipkart and Amazon India, fueled to a great extent by discounts. When contacted, Amazon India spokesperson confirmed the development. “Yes, we lowered the rates for certain categories. We think these revised rates can significantly help sellers to perform even better and succeed in their business,” the spokesperson said in an emailed response. 52612836 Amazon noted that it started with just 100 sellers three years ago and now has over 85,000 sellers. The number is growing at 250% year-on-year, and Amazon is adding over 90,000 products per day, the company said. Among other categories, the company has reduced its commission from 12% to 5% on movies and educational software. However, it had recently increased commissions in some categories such as mobile accessories. Market leader Flipkart has had to face resistance from some sellers on its platform following its revised seller policy. Flipkart’s new seller policy will be effective from June 20. Amazon CEO Jeff Bezos recently announced another $3 billion commitment for the Indian market, taking its total investment in India to $5 billion. Some of these funds are now clearly being used to woo sellers. Jrue Holiday Jersey
Bulkhouse brings e-commerce community on single platform
Bulkhouse Trading India, an e-commerce platform, today said it plans to launch a portal to bring together manufacturers, wholesalers and traders in direct contact with buyers for transactions on products made or value added across the country. “One-of-its-kind” B2All (business-to all) trade portal – www.bulkhouse.in – had its soft launch today. The website will use advanced technology to enable buyers and suppliers spread across the country to come on a single platform where they can choose to buy or sell, a company statement said here. It will bring the complete e-commerce community on one single platform for the first time. To ensure efficiency, the company plans to build its own back-end support system. Bulkhouse will have its own logistics and also warehouse facility for faster, easier and cheaper shipping of all the products, it said. The portal will bring together international and domestic buyers in direct contact with the small, medium and large businesses to meet their sourcing requirements. This would encourage the SMEs and MSMEs to expand their business across domestic as well as international market by choosing to export their products across the globe via Bulkhouse. “This advanced trade platform will offer end-to- end value-added services. Bulkhouse is not just a directory of suppliers, wholesalers, manufacturers or dealer. “Here you can negotiate, buy or sell on a single advanced online platform with secured payment gateways. Be it a small package or a truck load of products, our logistic partners will pick up the product from the seller and deliver it to the buyer’s door step,” Bulkhouse Trading CEO Adarsh Chilukuri said. Drew Brees Authentic Jersey