By Abhiruchi Ranjan
After a raging economic war with China, the United States may be set to start another one with its NATO ally Turkey. In other news, Air India continues to battle mounting levels of debt. Here are a few business stories you may have missed last week.
Pastor dispute might be dictating US-Turkey ties
Amid the Turkish lira crisis, the US has been accused by its NATO ally Turkey of engaging in an economic war and not abiding by the fundamental principles and values of the NATO alliance. Following US National Security Advisor John Bolton’s take on Qatar’s $15 billion aid being insufficient and the Turkish legal system not acquitting American evangelical Christian pastor Andrew Brunson being a big mistake, Turkey responded by putting out a written statement that it did not intend to start any economic war however would not keep quiet either. The currency has lost 37% of its value this year and could be facing further bouts of volatility as it is heavily dependent on US dollar flows. With Trump’s core supporters being evangelical Christians, he might be willing to strain relations with the distressed nation in order to protect his vote bank.
Air India’s financial woes
Air India seems to be strapped for cash again. As per an anonymous source, the aviation ministry has turned to the finance ministry for a Rs 5 billion loan, apart from the Rs 15 billion short term loan from Bank of Baroda. While the short term loan is being dispersed mainly towards helping the carrier servicing its international liabilities and paying salaries, the aid from the finance ministry would be used to pay back its creditors. While the airline’s account is still not considered a non performing asset, they also failed to find any takers for their 76% divestment stake and the Air India Specific Alternate Mechanism might bailout the anguished firm.
WhatsApp able to meet most regulatory demands
After the circulation of objectionable messages and fake news being rife on WhatsApp, the company has succumbed to Indian regulatory pressure by agreeing to comply with all the requirements of the Information and Technology Ministry, except for the decryption of data. After lynching incidents were provoked in several parts of the country, the Facebook owned messenger added several new features, including specifying forwarded messages. Whatsapp Chief Executive Officer Chris Daniels’s disagreement with IT minister Ravi Shankar Prasad over decryption of data arose over the issue of providing complete privacy to its 1.5 billion customer base hence making traceability difficult.
Alibaba and Reliance to unite for joint venture
Chinese e-commerce giant Alibaba Group Holding Ltd may come together with Reliance Retail Ltd to give cut throat competition to Flipkart and Amazon in the Indian market. With a joint venture in the pipeline, Jack Ma is keen on investing anywhere between $5 billion and $6 billion for a 50% stake in the Mukesh Ambani led retail business.
Alibaba has experienced success previously through PayTm, however, faced trouble when RBI ordered the digital wallet business to not on-board new customers, fearing a security breach. The firm’s association with Reliance is even more imperative as part of its global logistics network and international expansion strategies.
Amazon to foray into Indian food retail
Policy ambiguities are not deterring Jeff Bezos from entering the Indian market. Amazon is joining forces with Goldman Sachs and Samara Capital to form a consortium to acquire Aditya Birla Group’s food and grocery chain, More. After purchasing a 5% stake in Indian retail brand Shoppers Stop for Rs 1.8 billion and acquiring U.S. grocery store Whole Foods for $13.7 billion, the firm’s More supermarket acquisition would be its second investment in India. In all likelihood, Goldman Sachs Special Situations Group will be the investment vehicle for this transaction. A separate company or special purpose vehicle is expected to be floated in which Amazon will be a strategic partner, picking up a 49% stake. The move intends to strengthen the firm’s Indian food retail presence and employing an omnichannel approach to contest low retail margins.
Abhiruchi Ranjan is a writing analyst at Qrius