Mint’s Best of the Week | How diplomatic rows threaten economic progress, among other things
BOTW this week includes the Maldives president skipping India for his first foreign visit, increasing penalties levied on lenders by the RBI, the battle to control Religare and the passing of Charlie Munger.
Dear Reader,
Ten weeks ago, I found myself in a newsroom halfway across the world. I was visiting 🍁 The Globe and Mail, the leading news publisher in Canada, at their downtown Toronto office while on a family trip to North America. My host for the afternoon was Irish-born David Walmsley, the newspaper’s editor-in-chief.
The Globe and Mail is Canada’s most influential newspaper 📰. It traces its origins to 1844 and over time, through a series of mergers it has survived and thrived as a news publisher. It is housed in a beautiful steel and glass building on the eastern edge of Toronto’s central business district. It has a panoramic view of the city’s skyline 🏙️ and Lake Ontario 🛥️. On the floor above the newspaper’s operations is an events and conference venue, which is a popular destination for weddings (because of the glorious view) and thereby provides the paper’s parent company with a steady stream of unconventional revenue. David shared this and more as we talked about business models and journalism.
“What a day you’ve chosen to visit!” he exclaimed, as we walked around the newsroom. David was referring to an explosive story that broke a day earlier 🧨. Canadian Prime Minister Justin Trudeau had accused the government of India of being involved in the killing of Hardeep Singh Nijjar, a Canadian citizen and Sikh separatist whom the Indian government had designated a terrorist. Of course, I had no idea Trudeau was planning this announcement when I scheduled our meeting. But this surely added to the adrenaline rush of being in a newsroom on a big news day!
🗣️ Trudeau’s accusation in open parliament led to a diplomatic disaster 🧊. The next few weeks saw a freezing of Indo-Canadian relations, which we covered in detail at Mint, including the trade and business implications of the fall out. Trudeau and his government are yet to present evidence that brings India’s alleged involvement in the Nijjar case to light. 🇮🇳 🇨🇦 Indo-Canadian relations have since slightly improved, with visas being issued again.
This week, however, the United States government filed an indictment in a fresh case. The US claimed there was a foiled plot to assassinate another Sikh separatist at the behest of an Indian government official. The indictment says an Indian man was tasked with killing four pro-Khalistani leaders in North America, which included Nijjar. Evidence has been filed in a New York court. The indictment may embolden Canada. It could also have implications for 🇺🇸 Indo-US ties, a relationship that India cares much more about. Read our deft Quick Edit, which ran along these lines before the indictment was filed. The Indian government reacted to the indictment saying it was a “matter of concern” and clarifying that targeted killings are against government policy 🥷🏼, reported Shashank Mattoo.
~~~
There was much-else going on this week. The Mint newsroom did its best to make sense of it, while also setting the news agenda with big news breaks:
😑 🇲🇻 A geopolitical shift: The newly elected president of the Maldives Mohamed Muizzu decided to skip India for his maiden foreign visit. Muizzu instead chose to travel to Turkey, whose president Recep Tayyip Erdogan is vying for more influence in South Asia. India and the Maldives have historically been close, which is why their leaders chose to immediately establish ties with New Delhi upon arriving in office, explains Shashank Mattoo. Muizzu's break in this tradition signs a changing geopolitics in South Asia.
🧐 The Reserve Bank of India (RBI) has increased the volume and number of penalties levied on lenders so far this year in comparison with all of last year, reported Shayan Ghosh. The reasons for the fines included non-compliance with guidelines on lending, delay in paying interest to senior citizens, and not specifying the date of interest rate reset on some loans, writes Shayan. The central bank is attempting to increase scrutiny of lending practices across the country. It is not holding back from imposing fines on the biggest names in banking and lending, some of whom are surprisingly on this list.
⛔️ Finance Minister Nirmala Sitharaman and RBI Governor Shaktikanta Das, both, cautioned non-banking finance companies (NBFCs) from relying heavily on bank loans for financing their operations. The warning from the minister and the central bank appear to be based on the interconnectedness of the financial system – the main source of NBFCs borrowing is from banks and banks also subscribe to NBFC bonds. These cross wires could spark contagion at a systemic level if not cautioned against. More on this in this fine explainer also by Shayan Ghosh.
🤺 The battle to control Religare, the financial services company, threw up a new chapter this week: the insurance regulator (Irdai) interrogated two top executives about the compensation awarded to Rashmi Saluja, Religare's executive chairperson, in the form of employee stock options (Esops), reported Anirudh Laskar. Some context for those who may have missed this tussle so far: The Burman family (of Dabur) increased its shareholding in Religare recently and then triggered an open offer, which was rejected by the Religare board. Since then the compensation paid to Saluja has become one of the points of contention, which is what the Irdai is examining. 🤐 Reading between the lines: Saluja is perhaps all that stands between Religare and the Burmans' interest in controlling it. Notably, Religare owns Care Health, which has a 5 percent market share in the profitable health insurance sector.
🚕 Uber, the ride hailing startup that took the world by storm, made significant progress since its launch in India over a decade ago. However, the Covid pandemic dealt a blow to the ride hailing industry and Uber took a big hit. The company faces adversarial relationships with multiple actors including the tax department, taxi and rickshaw unions and its own drivers in various parts of the country. It also faces increasing competition at a time when the automobile industry itself is undergoing a profound transformation due to the adoption of electric and hybrid vehicles. Sumant Banerji interviewed Prabhjeet Singh, president of Uber India and South Asia, and brought us a deep dive into its challenges.
🌎 Climate change is arguably one of the biggest issues confronting humanity in the 21st century. COP28 (Conference of Parties), the annual conference conducted under the aegis of the United Nations Framework Convention on Climate Change (UNFCC), began this week in Dubai. For a bird’s eye view on what to expect from the Middle East nation and for a brief history of how these negotiations are going, read P. Anima’s story on the subject.
🎤 Also from COP28 is this dispatch from Mint’s Puja Das in Dubai: an interview with Badr Jafar, special representative of COP28. Jafar explained the role of businesses and philanthropy in combating climate change, while also discussing food security and agriculture.
😢 The civil service exams, through which candidates qualify for the prestigious Indian Civil Services, burgeoned a robust cottage industry across India – tutorials for candidates or coaching institutes. Each year these institutes take out advertisements in major media touting the success of their clients. And this is enabled by clients signing contracts with their respective institutes, agreeing to allow the use of their names and faces in marketing material. Except that they can no longer do that if they join public service. To know why, read this report from a new member of Mint’s newsroom, Dhirendra Kumar.
ఆఈ I was born in undivided Andhra Pradesh, and I have familial roots going back to both, newly formed Telangana and residual Andhra Pradesh. Therefore, as you may imagine, any debate on which state is faring better a decade after the bifurcation leads to an uneasy sensation. ⚖️ However, coming from the hands of the experienced N Madhavan, you will find a well-reported and nuanced set of perspectives on the state of affairs in the two Telugu states. It includes an understanding of the region’s politics, business sectors, welfarism and some clues on the election results from Telangana this weekend. A recommended read from a reluctant Telugite who often identifies as a Kannadiga.
Perspectives
🛬 What does Indigo launching a business class service have to do with India’s growth story? The announcement by the budget airline, India’s largest carrier, of introducing a business class is exciting news. It is an airline that has thrived in an otherwise hard industry and market. However, what this indicates about India’s economy and pattern of growth, is less exciting. Read this Mint Snapview for a sharp perspective on why Indigo’s latest move is indicative of an India growth story that we may not be proud of. 🪷
♟️ The ongoing marital separation of industrialists Nawaz Modi and her husband Gautam Singhania made for unfortunate headlines. Gristly details aside, the main concern for the board of Raymond, the world’s largest integrated maker of fabric, should be on preserving shareholder value. While it might be hard for board members to take charge of promoter-driven companies, that’s exactly what needs to be done in the long term interest of the business and its public investors, argues our Mint Snapview.
M2M Chart Beat
🔑 Another indicator of a K-shaped recovery from the lows of the pandemic comes in the form of data on luxury home sales. Mark to Market’s Chart Beat by Pallavi Pengonda shows us the reality of how India is growing as we get deeper into the 21st century.
Obituaries
🎩 You may know that legendary investor Charlie Munger died this week, five weeks short of his one-hundredth birthday. Munger was the trusted partner of Berkshire Hathway’s Chairman Warren Buffet for over five decades. The duo crafted and honed their distinctive style of value investing, an approach that Buffet credited Munger with nudging him towards. According to The Wall Street Journal, Buffett wrote that Munger taught him: “Forget what you know about buying fair businesses at wonderful prices; instead, buy wonderful businesses at fair prices.” Read about a life that traversed beyond markets and investing.
📖 Mint readers may not know this, but your lives are likely to have been touched by another person who died this week – Chandrika Mago, a senior editor at Mint. She was a member of the founding team and joined us exactly 17 years ago. Chandrika, as we fondly knew her, spent 38 years in journalism, starting at The Times of India in 1985. And she worked till her last day, bravely enduring a 10-year-old battle with cancer. Among her many feats, she had the unique achievement of being the architect of the Mint Style Book. This is a manual that taught many of us how to write, and more importantly, brought a distinctive personality to Mint’s journalism. She was an editor who was proud of our work. We will miss her. 🙏🏽
~~~
That’s all for this week.
If you have feedback on our journalism, our curation or just about anything to do with us please share your thoughts. You can write to me at nikhil.k@livemint.com or feedback@livemint.com.
Thank you for your time and here’s wishing you a wonderful weekend.
Best,
Nikhil Kanekal
Head of Subscriber Experience
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Business NewsWeekendMint’s Best of the Week | How diplomatic rows threaten economic progress, among other things
First Published:2 Dec 2023, 10:16 AM IST
- Top Gainers
- Top Losers
- 52 Week High