Chamber Voice : February – March 2023

President’s Letter

Dear Members,

The government is developing a platform to help citizens who store their documents in digilocker to auto update their address and other demographic details across departments through Aadhaar. The Ministry of Electronics and IT is in talk with various ministries such as transport, rural development, Panchayati Raj, along with the Election Commission of India on the contours of the platform, which is at the preliminary stage of conceptualization and development right now. The IT ministry will first approach the departments that issue key documents such as driving licences, ration cards, Voter ID cards etc., while passport may come in next phase, according to the officials. The changes will be made to all documents by the line ministries and will reflect in both physical and online formats. The automated update mechanism is being built on a consent framework. This means citizens will be asked to provide their consent if they wish to avail of such facility, after which the platform will seek the consent of concerned department

Addressing companies annual institutional investors call, Walmart CFO John David Rainey said that India is likely to surpass China and emerge as the largest international market for Walmart this year, Walmart is the majority owner of both ecommerce marketplace Flipkart as well as PhonePe. He termed Flipkart and PhonePe as market leaders and said both companies have huge opportunities to tap going forward. Earlier in February, while speaking at the Company’s quarterly earning call, Rainey had said that Walmart’s international operations had hit due to impact of PhonePe‘s separation from Flipkart. PhonePe’s legal entity was shifted from Singapore to India. The shift also led to Walmart footing nearly $1 billion tax bill levied by the Indian government. He also noted improvements in Flipkart’s positive contribution margin, means the product being sold at certain price is able to make contributions or generate money after deduction of fixed cost.

India will tax investments to debt mutual funds as short-term capital gains and royalty payouts by local arms of multinational companies at a higher rate, while offering marginal relief to individual taxpayers under the new income tax regime. It also raised the securities transaction tax rate by 25% on futures and options, according to the Finance Bill passed by the Lok Sabha on Friday with as many as 64 amendments.  Experts have said the withdrawal of the long-term capital gains tax benefits available to debt mutual funds will deal a blow to this popular investment, to now be taxed on par with bank deposits. The government said the move was aimed at ending tax arbitrage between similar instruments.

Banks in India are about to take the first step to explore clearing and settlement of dollars in the country. Over the next few months, Wall Street banking biggie JP Morgan, along with several other financial institutions, will carry out a pilot project where dollar payments and receipts can be completed among international banking units or bank branches at the International Financial Service Centre (IFSC) in GIFT City, Gandhinagar, Gujarat. IFSC Authority, the unified body for regulation and development of financial services and products in GIFT City, has given JP Morgan the go-ahead for the clearing and settlement system under a sandbox regime. Banks in India would not require to execute dollar transfers using their accounts in the US, with this system. “ A local dollar clearing means instantaneous settlement and availability of round-the-clock clearing infra… J P Morgan is roping in other banks.

Rising middle-class income and a booming young population has resulted in a rise in demand for two wheelers and four – wheelers in India. In January 2023, the passenger vehicle sales in India increased by 17 percent from a year ago, which was supported by strong customer demand and improved supplies from manufactures. According to Society of Indian Automobile manufactures, about 298093 units were sold in Indian market in the month of January 2023 as compared to 254287 units in January 2022. Given the strong demand in the domestic market, there is one company, namely, Lumax Auto Technologies (LAT), which can benefit from the growing automotive trend in the India market.

India is likely to discontinue the second phase of the Rs 10000 crore Faster Adoption and Manufacturing of Electric Vehicles in India or FAME II scheme after the next financial year and the center could instead offer incentives to EV makers through ongoing production linked incentive (PLI) programs to support the sector, government officials familiar with deliberations said. Industry has approached the government for extending the FAME II scheme beyond FY24. Under FAME, companies can offer a discount of up to 40 % on the cost of locally manufactured vehicles and claim it as subsidy from the government. Government is unlikely to extend the scheme beyond FY24 and the key FAME II will be achieved by then, a senior government official said. FAME II aims to support 1 million EV two-wheelers (E2W) and 7000 electric buses (e-buses). About 800000 E2Ws and 3500 e-buses are likely to be on the road by the end of March this year.

Coming to our home state Kerala, March 08th marks International Women’s Day, a day dedicated to honoring the rights and struggles of women around the world. While women still face daily challenges, in the last year, Kerala has witnessed a revolutionary leap in women’s entrepreneurship. Women have established a strong presence in various fields such as health, education, finance, politics, and employment. The state’s various departments are implementing numerous projects and activities to realize this year’s International Women’s Day theme, “Role of Innovation and Technology in Gender Equality.”

Kerala is on the path to a women’s entrepreneurial revolution, creating an environment that is friendly to entrepreneurs through entrepreneur-friendly policies. Women’s representation in the entrepreneurial sector has radically contributed to the economic growth of the state. Over 43,000 women have started new ventures in Kerala as part of the Entrepreneurial Year scheme, which made history under the auspices of the State Department of Industry and Commerce. This initiative is an inspiration to the women of Kerala who are making their own personal mark in all sectors of society.

KSIDC has sanctioned a total of Rs. 33.72 crores through its seed fund and scale-up schemes to bolster startup enterprises in the state. Out of this, Rs. 28.29 crore has been allocated through the seed fund scheme to support 134 early-stage startups and 5.43 crore through the scale-up scheme to 11 startups. The seed fund scheme is specifically designed to support early-stage startups that are built upon advanced technology and have the potential to be commercialized on a large scale. A diverse range of technical sectors are eligible for support through this scheme, including healthcare, agriculture, web and application development, e-commerce, engineering, Ayurveda, financial institutions, film and advertising, education, HR, biotechnology, defense technology, and more.

Moving on as part of the Chamber Activities, I am glad to inform you that Chamber did the Budget Session with Dr. Girish Ahuja, Veteran Direct Tax Expert on Decoding Direct Tax Provision in Fine Print on 11th February 2023 at the Chamber’s Conference Hall. Dr Ahuja spoke about the recent amendments / modification made through the finance bill and its effect on business, personal taxation as well as charitable trust since the corporates carry out their CSR activities through trusts. We had more than 30 plus participants attended this budget session.

Chamber did a Session on Importance of Competition Law for the Industry on 17th February 2023 and this session was graced with the presence of Acting Chairperson of Competition Commission of India (CCI) Dr. Sangeeta Verma. Dr. Sangeeta Verma talked about the importance of competition law in ensuring a level playing field to business. She referred to the collusion between big players in a field to include the market like to increase prices etc as ‘Cartel’, this formation of cartel is deal under competition act. Dr. Verma mentioned about the launch of a regional office at Chennai, and requested the industry leaders to help them in ensuring competition in the market. The other speakers who have addressed during this session was Shri. V. Sriraj, Joint Director (Law) at the Competition Commission of India & Shri. Vivek Agarwal, Partner (Anti-Trust Head) at DMD Advocates.

The February session of the 07th edition of CEO Forum Meeting held on 24th February 2023 at Hotel Taj Gateway (Marine Drive), Cochin. The Guest Speaker Adv. Pradeep Joy, Principal Consultant, P J Law Office lectured on the topic “Insolvency & Bankruptcy: Business Opportunities & Challenges”. There were more than 40 participants attended this session.

Cochin Chamber partnered with the Chemical Export Promotion Council CHEMEXCIL (set up by the Ministry of Commerce and Industry, Govt. of India) and conducted a Session on Export Awareness Programme for Chemical and Cosmetics Industries on 03rd March 2023 at Hotel 4 Points Sheraton (Infopark), Kakkanad, Cochin. The speakers who addressed the session includes Shri. K. M. Harilal, Joint Director General, JDGFT (Cochin); Smt. Lachita Mol, Asst. Director, MSME DI; Shri. Sreenivasa Rao, Branch Manager, ECGC Ltd; Shri. S. G. Mokashi, Chairman, CHEMEXCIL and Shri. Vicky Moolchandani, Regional Officer, CHEMEXCIL.

I am pleased to inform you that Chamber partnered with the Rotary Club of Cochin (West) and the General Hospital (Blood Bank) Ernakulam conducted a blood donation camp at the Cochin Port Hospital, Willingdon Island. The purpose of this camp is to keep enough stock of blood to ensure that the regular requirement of G H (Blood Bank) Ernakulam should be met for treating the Cancer patients.

The Last session of the 7th edition of CEO Forum held on 17th March 2023 at Hotel Crowne Plaza, Cochin. The topic was on “Managing Forex Risk Management in your Business in Volatile Times”.  Shri. Abhilash Koikkara (CFA), Head Forex & Rates at NUVAMA Group was the guest speaker. The session was well attended by the participants and there were close to 50 delegates attended this session.

Recent Union Cabinet Decisions

February 2023

March 2023

Forthcoming Events

Session on Export Promotions: Taj Gateway, Marine Drive, Kochi – 12.04.2023

Recent Events

Seminar on Budget 2023 – Decoding Direct Tax Provisions in Fine Print – 11.02.2023

Session on Importance of Competition Law For The Industry – 17.02.2023

CEO Forum Breakfast Meeting : Insolvency & Bankruptcy Code 2016 – 24.02.2023

Seminar On Export Awareness Programme For Chemical & Cosmetics Industries – 03.03.2023

CEO Forum Breakfast Meeting – Managing Forex Risk Management in your Business in Volatile Times – 17.03.2023

Recent Press/Media Coverage

Exim Statistics

Summary Report