By Abhiruchi Ranjan
Talk about adding fuel to the fire, US and China continue to remain at loggerheads by imposing tariffs one after the other. In other news, Gome Electronics is the latest Chinese market player to head to the Indian retail sector. Here are some business stories you may have missed last week.
Walmart-Flipkart deal gets CCI approval
The Competition Commission of India (CCI) took to Twitter to confirm that it has given approval for Walmart buying 77% stake in Flipkart. The $16 billion buyout was given the go ahead by the Indian antitrust regulator despite facing backlash from small players and traders who fear being driven out of the market. However, the CCI has stated that it would deal with Flipkarts discounting policies separately. The Confederation of All India Traders has been pushing for the government to block the deal because of competition concerns, which inturn has made this an important issue for the Bharatiya Janata Party (BJP) as most of their votes come from traders.
India and China insist trimming down farm subsidies
In a joint proposal to the World Trade Organisation (WTO), India and China have demanded that developed economies lower farm subsidies. They seek to get developed nations like US, EU and Canada to get rid of farm subsidies amounting to $160 billion they give to products like cotton, wool and tobacco. Both nations have recommended that half the difference between the actual support and 10% Aggregate Measurement of Support (AMS) be reduced in 2019. Under the WTO, AMS or Amber Box subsidies is capped 5% of the production value however it has been observed that the actual support exceeds this value. It is being urged that developed countries stick to the 5% subsidies and eventually come down to zero, so that developing nations are not affected.
China triggered into levying additional tariffs
Come August 23, 2018, China will hit back on the US by imposing additional tariffs of 25% on a variety of US imports worth $16 billion. As of June 2018, the quid pro quo trade war has resulted in the Chinese subjecting 333 categories of goods to tariffs. China was provoked to retaliate after US President Donald Trump slapped tariffs on Chinese imports worth $34 billion. While Trumps planned tariffs on $200 billion are yet to be set off, China have proposed restricting US imports worth $110 billion via its protectionist measure. While products like fish, steel and medical equipment will have duties imposed, crude oil has been excluded.
Gome Electronics follows other Chinese players to India
Chinese electronics giant Gome is set to give stiff competition to Samsung, TCL, Xiaomi and Oppo in the Indian retail market. The new Chinese entrant will launch its own range of smartphones, televisions and appliances and will also be setting up its own manufacturing operations on Indian soil to avail duty benefits and tax exemptions. Leveraging on the Indian festive season and peak consumer spending, the Gome Telecom Equipment subsidiary will be launching at least three smartphones in the Rs 10000 category via online and offline stores. On the management front, Piyush Puri will be heading the Indian operations. The $11 billion company already has over 1700 stores in China.
Elon Musk might take Tesla private
Wall Street banks were in for a treat after Elon Musk suggested that he might decide to take Tesla private. After tweeting on Wednesday that he might have secured funding for a deal to make Tesla a private company, banks like Citigroup and Goldman Sachs are trying to land the deal. Although no formal announcement has been made, the Securities and Exchange Commission did contact Tesla executives as to why no regulatory filing had been made and moreover, big institutional investors like Fidelity and Saudi Arabias Public Investment fund were unaware of this development. The news of the deal comes at the time of Teslas capital dwindling and further burning cash by paying the hefty fee of investment bankers.
Abhiruchi Ranjan is a writing analyst at Qrius