SUMMARY
Karnataka Govt is looking to roll out health advisories for IT, biotech companies
New FDI rules put in place to scrutinise investments and M&A offers from China and India's other land-border neighbours
Samsung, Apple look to turn retailers into e-retailers to resume sales of mobile phones, electronics
Covid19 Tech Impact
Latest updates & innovations, in-depth resources, live webinars and guides to help businesses navigate through the impact of the COVID19 pandemic on India's economy.
In case you haven’t been keeping count, we are now in the Day 25 day of the lockdown. Over the last month, there have been several developments across the world. Everything is moving online, whether it’s your work, workout and even dating. It’s like an episode of Black Mirror, we surely did not ask for. Nevertheless, the wheels of business and policy keep turning as India announced new rules for investments from China and other measures to protect Indian companies.
Covid-19 will reboot the world into new reality where virtual is everything after the crisis is over and those businesses that cannot afford to go digital will be swooped up by larger companies. Biocon chairperson and managing director Kiran Mazumdar-Shaw highlighted in a blog post that the economic damage of the situation will be unprecedented and the world economy would lose $5 Tn and move into a recession by the next fiscal.
“A year from now, the world we will live in will be very different. It will impact how we live, how we work, and how we use technology,” she said.
Even ixigo founders Aloke Bajpai and Rajnish Kumar spoke to spoke Inc42 cofounder and CEO Vaibhav Vardhan in the latest edition of our ‘Ask Me Anything’ series about their experience of surviving through economic crises.
Founded in 2007, ixigo had to face the economic crisis of 2008-2009 at a very early stage of their business. However, both Bajpai and Kumar have highlighted that the situation was very different from now since the market was still open. With the lockdown, everything has now come to a zero.
“What happened during 2008-2009 was that the industry saw a dip in demand, and activities were slowed down. But today, the lockdown situation has left the travel sector to completely dry, which means that everything is down to absolute zero. This is something that I don’t think anybody has ever seen before,” Bajpai added.
New Rules For Investments, M&As From China
The Department for Promotion of Industry and Internal Trade (DPIIT) under the ministry of commerce has revised the rules of foreign direct investment (FDI) in India to prevent opportunistic takeovers or acquisitions of Indian companies and aggressive investments by investors from China and other land-border neighbours. With this move, DPIIT is looking to minimise the impact from the pandemic on Indian businesses with greater scrutiny on investment activity from China, Pakistan, Nepal, Bangladesh and Myanmar.
As is seen after any recessionary phase, there is a period of consolidation, but this can often lead to a ‘buyer’s market’ where investors or other larger companies take advantage of the situation and low-ball bids for acquisitions or equity. In fact, we can already see this happening in the VC market, where drastic down rounds are becoming more frequent than ever.
In a notification, the DPIIT has highlighted that an entity of a country that shares a land border with India can invest in Indian companies only after receiving government approval. The new rules will also be applicable to ‘the transfer of ownership of any existing or future FDI in an entity in India, directly or indirectly,’ the DPIIT has said. This means all investments from these countries will be under the scanner too.
Meanwhile, the Karnataka government has allowed IT and biotech companies to resume limited operations from April 20. In preparations for this, Deputy chief minister CN Ashwath Narayana has also directed the health department of the state to issue guidelines for the sectors. Besides this, Narayana also held a video conference with representatives of the tech companies, which included Infosys cofounder S Gopalakrishnan, Biocon’s Mazumdar Shaw, and Accel’s Prashant Prakash.
Contactless Dining Comes Into Fashion
Food aggregators Zomato and Dineout have rolled out ‘Contactless Dining’ facilities for the costumes. With this, the customers can now have a digital experience even in their offline dine-in experience in the post-COVID world.
Both the companies are allowing consumers to experience a contactless experience through digital menus, orders and payment process even when dining out. Zomato users can scan the QR codes on respective tables, explore digital menus and place the orders through their phones.
Meanwhile, smartphone and consumer electronics companies like Samsung, Xiaomi, Apple, OnePlus, Realme and LG are turning retailers into e-retailers to continue their operations. As the government has approved the delivery of non-essential consumer goods.
Samsung, in collaboration with Benow.in, has created an ecommerce platform through which the retailers across the country will be able to sell and deliver their products. Meanwhile, Apple, OnePlus, Xiaomi and Realme have allowed brick-and-mortar stores to sell their models through the retailer’s e-stores or marketplaces, which was not allowed earlier.
Meanwhile, digital payments platform PhonePe is inviting developers and companies to host their Covid-19 app on PhonePe Switch platform.
In this unprecedented situation, the Indian developer community has been working tirelessly on altruistic projects to solve a variety of problems. We want to join you by helping you reach out to our massive user base. Host your m-site or Webapp on the @PhonePe_ Switch platform pic.twitter.com/srZ66lkmQP
— [email protected] (@rahulchari9) April 18, 2020
Tech Giants Back Covid-19 Initiatives With Big Donations
Walmart, Flipkart and the Walmart Foundation have pledged to contribute INR 46 Cr to support India’s efforts against Covid-19. With this, the companies will also contribute personal protective equipment (PPE) for healthcare workers and financial support for organisations providing businesses.
#News: @walmartindia, @Flipkart & @Walmart Foundation provide INR 460 million of support to India’s #Covid19 Fight. To contribute personal protective equipment for medical staff & other necessities for vulnerable communities.
Read more https://t.co/W6kFkRXN3G
— Flipkart Stories (@FlipkartStories) April 18, 2020
Meanwhile, Action Covid-19 Team (ACT) has decided to fund the initiatives taken up by Gurugram-based Healthians to drive through testing.
We are excited to support @healthians from @actioncovidteam fund to attempt drive through testing for Covid-19. This model significantly reduces the cost of sample collection and increases # tests/ phlebotomist/day. @MohapatraHemant @RadhikaAnanth @abhirajbhal @skirani @mobhat pic.twitter.com/H4E1VMBWiI
— Ashish Agrawal (@dvbydt) April 18, 2020
Cab-hailing services Ola has decided to contribute INR 50 Lakh to Haryana Chief Minister’s Fund to tackle the Covid-19 pandemic in the state. The company has also contributed INR 5 Cr to the PM CARES Fund last week.
Meanwhile, driver-partners of both cab-hailing services Ola and Uber have called out the claims made by them of helping them. Tanveer Pasha, who is the president of the Ola, Taxi For Sure and Uber Drivers and Owners Association in Bengaluru, told Inc42 that they have not received any benefits promised by the two companies.
Neither Ola or Uber responded to questions
