Name:- Sakshat Puro (191094) (Marketing)

1. App, in-app purchases to become costlier

for iPhone users
Article date 27 October 2020

Source of article Live Mint

Link to the article

lhttps://www.livemint.com/technology/tech-news/app-in-app-purchases-to-
become-costlier-on-apple-app-store-11603782365669.html

 Apple has agreed to adjust rates in order to match them with local tax
and foreign exchange rate adjustments.
 In addition to the current goods and services levy, impose 2% of the
18% that is already paid to developers.
 Apple announced this news from an official online post and said that
the prices on the app store have to be changed because of the
foreign exchange rate firm.
 In Brazil, Colombia, India , Indonesia, Russia , and South Africa,
prices are expected to increase.
 At the end of March, the Government of India levied a 2%
equalisation tax on non-resident e-commerce operators providing any
e-commerce supplies or services.
 India's decision to raise taxes on major internet firms has attracted
criticism.
 And soon after an inquiry under the Trade Act, 1974, was declared by
the Indian government to look into discrimination against US firms.
 Experts believe that large internet corporations would not be
impacted by this as they might absorb it. But this will affect to those
consumers who do not have any alternative to Apple’s App Store to
download apps.
 And since most Apple users belong to the mid- and high-income
groups, they would not be bothered by a small spike in subscription or
in-app purchases.
 The 2 percent additional equalisation tax on digital purchases has
already been paid by other global giants, including Google, Netflix
and Adobe.
 In app sales, including paid subscriptions, Apple is currently facing
greater issues in the form of a backlash from developers for the
normal 30 percent fees it charges on all app purchases. The App
Store prices have been considered too high and predatory by many
developers.

Article Analysis

 In 2016, in order to tax digital transactions, the Equalisation Levy was

introduced in India.
 Therefore, the income produced by India 's international e-commerce
firms. It is planned to tax businesses for company transactions.
 Information Technology in India and globally has gone through an
exponential period of growth. This has contributed to an increase in
digital service supply and procurement.
 Consequently, this has given rise to different new business models,
where digital and telecommunication networks are heavily based.
 As a consequence, in terms of nexus, characterization and valuation
of data and consumer contribution, the latest business models have
come with a range of new tax challenges.
 The combination of the inadequacy of physical presence-based
nexus provisions in current tax treaties and the right to tax payments
such as royalties or technological services fees offers a fertile basis
for tax disputes.
 The Government of India has therefore implemented the vide Budget
2016, the equalisation levy to give effect to one of the BEPS (Base
Erosion and Benefit Shifting) Action Plan recommendations, to bring
clarification in this regard.
 The Finance Act 2020 amended the Finance Act 2016, imposing a
new 2 percent Equalisation Tax on the consideration received /
receivable by an e-commerce operator from the e-commerce operator
's online sales of products; or the online provision of e-commerce
services; or the online selling of goods or provision of services or
both, enabled by the e-commerce alternative
 As companies are increasingly searching for a digital platform not
only to advertise their products / services but also to sell them, which
is likely to increase further in the midst of the current pandemic.
 Therefore, in the absence of a business connection or a permanent
establishment in India, some of these companies could not have been
taxable in India but will now be within the scope of the Equalisation
Levy.
 Another factor behind the rise in app purchasing rates is the shift in
foreign exchange.
 The forex market is the biggest and most liquid market.
 The forex market is an electronic network of banks, brokers,
institutions , and individual traders (mostly dealing through brokers or
banks). There is no centralised location.
 So, we can assume that Forex (forex or FX) is a global market for
national currencies to be traded with each other.
 Trading in foreign exchanges uses currency pairs, priced in terms of
one vs. the other.
 This trade is also influenced if the exchange rate increases, which
changes nothing but the value of the currency of one nation versus
the currency of another country or economic zone.
 As of July 31 , 2020, for instance, the exchange rate is 1.18, meaning
it takes $1.18 to buy € 1.
 Thus, because of this foreign exchange risk, if the domestic currency
appreciates against a foreign currency, after being exchanged back to
the domestic currency, income or dividends received in the foreign
country would decrease.
 Because of the unpredictable nature of the exchange rate, protecting
against this form of risk, which can affect sales and revenues, can be
very difficult.
 The multinational tech giants have therefore posed a concern
because of this exchange rate and the recent equalisation tax, as it
affects their business operations.
 The tech giants said the time period provided to them by the Indian
government to comply with the new levy is too small.
 To react to this tax reform, Apple raised the prices of in-app
purchases, thereby becoming more costly for Apple users.
 However, India is not the only country to impose a tax on digital
transactions; many countries have imposed a tax or withholding tax
 on digital transactions on digital services, and several are reviewing
the same tax.
 Apple's decision to increase prices in its App Store in countries such
as Brazil, Colombia, India , Indonesia, Russia , and South Africa, and
in Chile, Mexico, Saudi Arabia, and Turkey also changed its App
Store prices in September.
 Chile, where its latest value-added tax was 19%, which is up 1% from
its previous 18% rate.
 In Mexico, because of a 1 percent rise in its tax rate from 15 percent
to 16 percent, Apple was also forced to make price changes in its App
Store.
 For Turkey, due to a newly approved digital services tax of 7.5
percent, the Cupertino-based business increased App Store prices on
top of the current value-added tax of 18 percent.
 However, Apple refused to clarify when new rates would take effect
for consumers, as companies have raised concerns about unilateral
steps taken by these countries without waiting for global consensus,
resulting in higher tax costs.
 The inconsistency of unilateral measures raises the difficulty of
companies trying to comply with the rules and can increase the total
tax burden.
 Therefore, the question is what a fair and feasible tax system could
look like because of unilateral steps for countries to enforce the
development and implementation of their own tax system, and the
basis for taxation varies greatly from one country to another.
 With this in mind, the Organization for Economic Co-operation and
Development (OECD) is working towards a global solution in the
absence of consensus and in consideration of the time it is likely to
take to achieve an agreement on a workable global system.
2.British Airways CEO replaced as company fights for
survival

Article date 12 October 2020

Source of article Economic Times

Link to the article

https://economictimes.indiatimes.com/news/international/business/brit
ish-airways-ceo-replaced-as-company-fights-for-
survival/articleshow/78623273.cms

Highlights of Article

 British Airways is the United Kingdom 's flagship carrier. Behind easy
jet, the airline is the second largest UK-based carrier, based on fleet
size and carrying passengers.
 After 4 1⁄2 years in the role, British Airways has replaced CEO Alex
Cruz as part of a large shake up as the COVID-19 Pandemic
pummels airlines around the world.
 On Monday 12 October, the British Airways parent company,
International Airlines Group, announced Sean Doyle, previously the
Aer Lingus boss of another carrier in the group, as BA 's new Chief
Executive Officer during an unspecified transition time.
 In the second quarter, BA's passengers fell 95 percent from the year
before, leading to an operating loss of 4.04 billion euros ($4.77 billion)
in the first half.
 Unions have protested the way Cruz treated 12,000 job losses related
to the pandemic scenario in recent months.
 The shakeup comes just a month after Luis Gallego became CEO of
IAG, promising to shore up the finances of the company and follow
 the "new standard" of air travel during the pandemic, Gallego led
Iberia Airlines to establish IAG with a cost-cutting mission. He
succeeded Willie Walsh, the former CEO.
 In the middle of government-imposed travel restrictions and fears
about the safety of air travel during the pandemic, airlines around the
world have seen passenger numbers plummet.
 British Airlines has been especially difficult because passengers from
most countries are forced to quarantine themselves, shutting most
business and holiday travel for 14 days after arrival.
 This is an indication that IAG's new chief executive, Luis Gallego, is
flexing his muscles and trying to prove that he can make the required
adjustments to lead the airline group to a sustained recovery.
 In reality, British Airways is facing the toughest challenge in its history
as demand for international travel has plummeted and bookings
continue to be limited by quarantine restrictions.
 IAG also reported that if Low Cost Brand Level were to join the Group
Management Committee in the new position of Chief Transformation
Officer, Fernado Candela, Chief Executive.
 IAG's shares were up 0.3 percent in early afternoon in London at
103.8 pence after dropping as much as 5.8 percent in early trading.
 The company's unions accused BA of threatening the workforce with
a "fire and rehire" scheme in which employees would be rehired on
downgraded terms and conditions if they did not comply with the cost-
cutting plans of the company.
 The Abrupt Change in Management comes as British Airways is
desperately struggling to remain afloat, like most of the rest of the
travel industry.
 As new waves of coronavirus outbreaks further restrict the movement
of passengers, Global Airlines has been asking governments for aid.
 Industry assistance negotiations in the United States have been kept
up by disagreements over diverse economic values.
 In Britain, the government forced airlines elsewhere to pursue cash
IAG details plans to collect EUR 2.7 billion in September by selling
new shares to existing shareholders.
 It also borrowed EUR 1 billion in state-supported loans for its Spanish
Airlines Iberia and flew back in May, earning 300 million British
pounds (approximately $390 billion).
 Usage of the Bank of England 's British Government-supported
borrowing scheme. For the entire European airline industry, it will be
a very difficult winter.
 Wide domestic markets are improving for the airline industry in China,
Russia and, to a lesser degree, in the United States. But travel
restrictions have fractured the European economy.
 It will also struggle with airlines that do more long-haul flights,
including British airways , Air France and Lufthansa. In the month of
May, Lufthansa secured a EUR 9 billion easy jet bailout from the
German government last week, announcing its first ever annual loss
and aiming to fly just a quarter of its usual capacity in the last three
months of 2020.
 Almost half of its employees were laid off by Virgin Atlantic, even after
it devised a 1.2 billion euro private rescue package.
 Computer failures have harmed the airline's credibility for passengers
in recent years and weak security allowed hackers to steal half a
million customers ' personal data in 2018.
 British Airways offered "very good financial results but its
performance to other stakeholders or to co-operators" before the
pandemic issue.
 Global Airlines has cancelled thousands of flights worldwide, as
COVID-19 reduces passenger travel demand, with passenger travel
demand for destinations, with destinations in China and Italy
especially hard hit.
 The Aviation Industry is coping with the pandemic's serving impact,
which has infected more than 1,34,300 individuals globally so far and
killed over 5000 to an AFP count.
 In an additional blow this week, US President Donald Trump declared
a 30-day shock ban on coronavirus travel from mainland Europe.
 The Global Aviation Association cautioned that the trans-Atlantic
travel ban imposed by the US would further damage an industry
already hit hard by the crisis, insisting that airlines needed
"emergency measures" to get through it.
 British Airways should encourage the price of tickets to draw more
passengers to switch from other modes of transport to be customers
of airlines.
 British Airways is one of the most successful airlines , especially in
the UK market, taking into account many of the factors mentioned
above, such as the resource-based power of both tangible and
intangible resources.
 On some flights, British Airways and Qantas operate as one airline.
The organisation wants to build worldwide partnerships with other
airlines.
 This would raise their sales by supplying flyers with more
destinations. British Airways became part of the One World Alliance
in 1999.
3.U.S. judge blocks Trump administration's ban on new
TikTok downloads

Article date 28 September 2020

Source of article Times Of India

Link to the article

https://timesofindia.indiatimes.com/world/us/us-judge-temporarily-blocks-trump-
administration-ban-on-new-tiktok-downloads-from-app-stores/articleshow/78355722.cms

 On 6 August, Donald Trump released executive orders targeting the

TikTok viral video app and the WeChat messaging app.
 The orders announced that, due to security issues, the two apps will
be blocked from processing transactions for US citizens and from
being downloaded in US app stores after 45 days, or on 20
September.
 On 14 August, in a separate executive order, the Trump
administration said that TikTok would face a full ban if it was not sold
to a US company by 14 November.
 But a Trump administration order that was supposed to prohibit Apple
Inc and Google's Alphabet Inc from offering Chinese-owned short
video-sharing app TikTok for download at 11:59 on Sunday was
temporarily blocked on 27-Sep-2020 by the US judge in Washington.
 The US official claimed that the decision was taken because of
national security concerns that the Chinese Communist Party
government could access personal data collected on 100 million
Americans using the app and also stated that the app's parent
company ByteDance is a representative of the Chinese Communist
Party ( CCP's) and that it was committed to promoting the agenda
and messaging of the CCP.
 TikTok lawyer argued that the ban was "unprecedented" and totally
"irrational" especially as talks are ongoing that could render it
unnecessary and also accused the organisation of being a blunt way
to whack it.
 TikTok and WeChat have refuted these allegations and made a
statement that US data is not stored in China and that the company
does not provide the Chinese government with access to personal
proprietary information for US users.
 WeChat argued that the ban was discriminatory in nature, claiming
that it singles out citizens of China and Chinese American descent
and exposes them to disparate treatment on the basis of race ,
gender, nationality and national origin, as well as people who
associate with them.
 On Sept 20, ByteDance said that a tentative agreement was made
with Walmart Inc and Oracle Corp to take stakes in a new company
that would supervise the US operation, TikTok Global.
 The agreement has yet to be reviewed by the Committee on Foreign
Investment in the United States (CFIUS) of the US government.
 In support of the software injunction, the Justice Department argued
that allowing Americans to continue installing the TikTok app would
interfere with the president's structured national security decision
altering the environment with respect to ongoing CFIUS negotiations
and continuing to allow ByteDance to flow sensitive and important
user information with respect to all new users.
 In the increasing U.S., TikTok also argues the restrictions Under the
Trump administration, China's tensions with the TikTok ban are not
due to legitimate national security, but rather to political concerns
linked to the upcoming general election.
 A agreement with Walmart and Oracle companies to sell US activities
was granted tentative approval by the Trump administration. The
deadline for ByteDance to seal the deal is 14 November.
 The current agreement states that US operations will be spun off into
a new business called TikTok Global.
 Oracle will act as a data host for the new activity in this newly
founded business and hold a 12.5 percent stake in it. Another 7.5
percent will be owned by Walmart, but ByteDance will retain the
remaining 80%.

International Business Environment

 A lot of significance is also given to the political factors affecting
companies. Company can be affected by many facets of government
policy.
 It may add a risk factor and contribute to a serious loss. Companies
should acknowledge that political forces have the ability to influence
outcomes. It can also impact government decisions at the federal and
local levels. Companies should be prepared to deal with policy's local
and foreign outcomes.
 The political variables are made up of shifts in government policy.
The transition may be economic, legal or social. It may be a
combination of these variables as well.
 Among the least stable elements in the corporate world is probably
the political environment.
 When democratic governments every few years have to seek re-
election, a cyclical political climate emerges. America is a democratic
country where direct democratic mechanisms make certain decisions
 (often local) and others (often federal) are made by democratically
elected members.
 As the political relationship between China and the United States
deteriorated, the multinational corporations of both countries suffered
a great deal because of this. The Byte Dance is a live example of this.
 ByteDance is the TikTok developer banned by the Indian government
on June 29 as a result of deadly fighting with Chinese troops shortly
after the US Commerce Department began preparing to issue an
order banning individuals from accessing the WeChat and TikTok
Chinese owned messaging app.
 Currently, as a court in America has temporarily halted the
government order, there is still high friction between the two
countries.
 The implications on ByteDance of this political uncertainty between
these two countries can be clearly seen as the Trump administration
told ByteDance that the US TikTok operations should be sold to the
US by 14 November.
 The US has called for TikTok's US operation to be developed into a
new company named TikTok Global.
 Oracle will act as a data host for the new activity in this newly
founded business and hold a 12.5 percent stake in it. Another 7.5
percent will be owned by Walmart, but ByteDance will retain the
remaining 80%.
 But Trump said in recent statements that the parent company will
have little to do with the global TikTok, and if they do not support the
agreement, TikTok will be banned in the US. TikTok, on the other
hand, made a public statement that it is not planning to pass
ownership of the valuable TikTok algorithm that drives the app.
 The Chinese government is less likely to encourage ByteDance to
give up the entire TikTok operation to the US.
 The US has already levied higher discriminatory taxes on the various
goods and services imported from China, and the US government
has now taken another measure to ban Chinese companies from
doing business in the US.
4.Exports grew 6% in Sept after six months of contraction,
trade deficit

Article date 15 October 2020

Source of article Livemint
Link to the article
https://www.livemint.com/news/india/exports-grew-6-in-september-after-six-months-of-
contraction-11602766807759.html

 The article above notes the current status of the merchandise trade in
India. It has been shown that India 's trade in merchandise is growing.
Yet trade deficits are the net product of exports and imports.
 After six months, exports showed an increase of 6% in the month of
September and the trade deficit was reduced as a result.
 Because of the high demand for engineering goods petroleum products
organic, inorganic, chemicals pharmaceuticals, readymade clothes, the
merchandise exports have increased. Exports have risen to $27.6 billion
and imports have contracted to $30.3 billion, according to data released
by the commercial sector. So, $2.7 billion is reported in the trade deficit,
 The present pandemic is not the cause of the effect on merchandise
trade, but before this pandemic entered the economy, there was a
decline in merchandise trade. Imports and exports decreased in March
this year, even at a double-digit figure, but stabilised with trade
surpluses in the month of June.
 Exports and imports facilitate all industries, but in the case of SMEs,
which contribute to the bulk of exports, exports are struggling and
exports are limited.
 Many of India's exports are driven by supply imports, such as
electronics & pharmaceuticals, and supply chain problems. In
 addition, the prices of gold and oil have been severely affected by
trade.
 In the June quarter, global merchandise trade decreased by 21
percent, according to the World Trade Organization. It has been
estimated that there will be a 13% -32% fall in global merchandise
trade in 2020.
 The monthly data from June tells us that while Y-O-Y export & import
growth decelerated compared to April and May 2020, imports
dropped more rapidly than exports.
 When it comes to testing export and import dynamics, to see whether
there are specific regional shifts in the composition of goods and the
direction of trade.
 The demand for exports is a result of international revenue, export
rates, foreign prices and currency.
 The positive Y-O - Y rise in exports of organic & inorganic chemicals
(19.06 percent) and drugs & pharmaceuticals (9.89 percent) stopped
the total exports of slide I in June 2020. RMG of all textiles (-34.84
percent) and engineering products (-7.5 percent) were negative
drivers of exports.
 In pandemic times, the role played by drugs and pharmaceuticals in
stopping the export slide was a positive signal.
 In the case of imports, on the other hand, all the main components of
imports-gold, petroleum, oil & crude; electronic goods and;
machinery, electrical & non-electrical saw a double-digit decrease on
a Y-O - Y basis in June 2020.
 The decreased imports of machinery and electronic products can be
due to the disruption of the China-dominated global supply chain.
 In FY 2019-20, imports from China accounted for 13.8% of India's
total imports, making its share the highest. Electrical machinery and
electronic products dominate India's import basket of Chinese goods,
accounting for about 29.3 percent of total Chinese imports to India.
 However, with the Chinese economy affected by the pandemic in
November 2019 , total Chinese imports decreased by 7.2 percent (y-o
- y basis) during FY 2019-20, becoming the worst hit among the top 5
importers in India. This pattern is also reflected in the decrease in
imports of electrical machinery on a y-o - y basis by 7.4 percent in GY
2019-20.
 In June 2020, Indian market inflation was 6.1 percent. The dollar has
depreciated against the rupee. The consumer trust index of the RBI
dropped from 115.2 in March 2020 to 97.9 in May 2020, reflecting
subdued feelings. 0.3% retail inflation for advanced economies, 4.4%
for emerging markets and developed economies and-) (4.9% growth
for world production is predicted in the IMF World Economic Outlook
for June 2020.
 The dollar has depreciated against the rupee. The fall in revenues
and the weakening of the exchange rate would have a dampening
effect on demand for imports, while increasing domestic inflation
would have a reverse impact.
 The effect of the former variables is expressed by the deep drop in
imports.
 Income declines and relatively lower inflation abroad could have a
dampening effect on demand for exports.
 For a specific cause, we see the opposite, i.e. the market for Indian
pharmaceuticals, organics and chemicals and other food products
has resulted in increasing demand for Indian exports.
 With India playing to its comparative advantage in a world affected by
the pandemic, this is inelastic demand.
 While these impacts will help India retain its export momentum and
thus trade surplus for a while, it remains to be seen if it is translating
into an overall growth engine for the Indian economy.
 There was a sudden decrease in demand for gold because of the
lockdown, so there was a decline in gold imports as well.
 But since the upcoming festive & marriage season, it has been
estimated that there will be demand for gold. Imports will increase.
 In conclusion, if there is also a pick-up in imports of non-oil, non-gold
products, the export sector would be sustainable.
5.CHEESE, CAR PARTS AND KOBE BEEF: BRITAIN’S
TRADE DEAL WITH JAPAN
Article date 23 October 2020

Source of article Economic Times

Link to the article

https://economictimes.indiatimes.com/news/international/business/chees
e-car-parts-and-kobe-beef-britains-trade-deal-with-
japan/articleshow/78824429.cms

 The United Kingdom is no longer a member of the European Union

(EU), but it is not Brexit 's end.
 In order to negotiate the rules for the current UK-EU partnership, the
deadline is fast approaching. The reforms will have an effect on many
aspects of life, including trade and immigration, and will begin on 1
January 2021.
 On 31 January, the United Kingdom left the EU with a treaty called
the withdrawal agreement.
 It was, however, intended to set out a mechanism that would allow
the United Kingdom to exit the EU as easily as possible, not the terms
of the future relationship. It included such topics as:
 Agreeing on a period of change and how it will work
 How to escape the need of checks along the Irish border
 The financial settlement of the UK with the EU
 Negotiations aimed at agreeing on a new relationship were often
expected to take place after Brexit and during the transition, including
trade agreements, but also regulations in areas such as access to
fishing, control of medicines and security cooperation.
 Britain and Japan have formally signed a trade agreement, marking
the UK's first big post-Brexit deal. The deal, unveiled last month,
means nearly all its exports to Japan will be tariff free while removing
British tariffs on Japanese cars by 2026.
 UK International Trade Secretary Liz Truss called it a "ground-
breaking, British-shaped deal".
 But critics have said it will boost UK GDP by only 0.07%, a fraction of
the trade that could be lost with the EU.
 The two countries had reached a broad agreement in September, and
the deal is expected to boost trade between the UK and Japan by
about £15bn.
 The deal, which was negotiated over the summer, will take effect from
1 January 2021.But some experts said it was a missed opportunity
between the UK and its 11th biggest trading partner.
 Dr Minako Morita-Jaeger, international trade policy consultant and
fellow of the UK Trade Policy Observatory at the University of
Sussex, said that given that Japanese FDI (Foreign Direct
Investment) has been playing an important role in the UK economy
and retaining its existing investment in post-Brexit is crucial, the UK
government should have shown a strong commitment to Japanese
investment by including a comprehensive investment chapter
encompassing investment protection and dispute settlement.
 She added that Japan was the world's largest overseas investor,
accounting in 2018 for 14 percent of the world 's total.
 The new deal is somewhat close to the current agreement between
the EU and Japan, but has an additional chapter on digital trade.
 Ms Truss said in a joint press announcement with Japan's foreign
minister, Toshimitsu Motegi, that an independent UK will not be able
 to enter into big trade agreements or that it would take years to
conclude.
 Mr. Motegi said that the agreement between the United Kingdom and
the EU was still crucial for Japanese industry , in particular for car
manufacturers such as Nissan and Toyota, which use parts in
vehicles assembled in the United Kingdom from across Europe.
 "It is of utmost importance that, even after the UK 's withdrawal, the
supply chain between the UK and the EU is preserved," he said.
 According to Britain, the post-Brexit trade agreement signed on
Friday with Japan "secures significant victories that would be unlikely
as part of the EU," while its content is essentially identical to the
existing EU-Japan agreement.
 When it comes into force in January after being ratified by lawmakers
in both nations, Britain hopes the deal would raise trade with Japan
by about $20 billion.
 Four things to know about the bilateral agreement are as follows:
 When the agreement was announced last month, Britain said it meant
it would be tariff-free for about 99 percent of its exports to Japan.
 The vast majority of customs duties are also absent under the new
EU-Japan trade deal, which has been in effect since February 2019.
 According to the European Union, the bloc 's meat exports to Japan
rose by 12% under its agreement, while exports of electrical
machinery were boosted by 16.4%.
 In terms of market access, as under the Japan-EU agreement,
Japanese Foreign Minister Toshimitsu Motegi reported on Friday, we
have preserved Japan's high-level access to the UK market. And we
have increased access to certain goods, such as train cars and auto
parts.
 The Japan-UK Agreement focuses primarily on exports to the food
and beverage, finance and technology sectors and seeks to eliminate
red tape for British farmers in the pork , beef and salmon sectors.
Brand security for British products, including English sparkling wine,
Yorkshire Wensleydale cheese and Welsh lamb, is also included.
 In exchange, the UK government says that customers can buy
"cheaper, high-quality Japanese products — from udon noodles to
bluefin tuna and Kobe beef."
 In the agriculture and food market, there are currently 241 British
companies importing from Japan and 693 exporting goods to Japan,
the UK government reports.
 But unlike the Japan-EU agreement, according to the Financial
Times, this agreement excludes quotas for agricultural exports such
as cheese, and instead allows Britain to use any such quotas left over
by the EU.
 The United Kingdom hopes that the agreement would enable its
companies providing services to gain access to the Japanese market,
from financial services to telecoms and transport.
 Although some critics have cast doubt as to how much difference the
new digital provisions would make, the agreement was welcomed by
British companies.
 It was called a 'breakthrough moment' by Carolyn Fairbairn, director-
general of the Confederation of British Industry. Last year, Japan
accounted for just about two percent of Britain's trade, government
figures show — about the same as Norway.
 But the deal could serve as a bridge for the United Kingdom to join
the Trans-Pacific Partnership Comprehensive and Progressive
Agreement, also known as TPP-11, a free-trade agreement between
 11 nations, including Japan, Canada , Mexico, Vietnam, and
Australia.
 It was formerly known as the Trans-Pacific Partnership (TPP) and
before the United States withdrew in 2017, blocking its ratification, it
was slated to be the world's largest trade pact.
 Truss said the deal "paves the way" for Britain to join the partnership
-- but this is likely to be a complex manoeuvre that will take years.
6.Turkey's Erdogan urges French goods boycott amid
Islam row

Article Date 25 October 2020

Source of Article Hindustan Times
Link to the article- https://www.hindustantimes.com/world-news/middle-east-calls-for-boycott-of-
french-products-after-macron-s-comments/story-NoOP0qpsWDEOBgSbfXmWML.html

Highlight of the article

 France teacher named Samuel Paty was killed and beheaded on 16
October by 18-year-old Abdullakh Anzorov outside Paris, after
presenting the images of Prophet Muhammad cartoons to his pupils
during a class about freedom of speech.
 But the president of France Mr Macron paid tribute to Mr Smuel Paty,
and said France "will not give up our cartoons".
 Because of this the Turkey president urged to the nation and also to
the other world leaders to protect Muslims if in France operation
against the Muslims is being done.
 This dispute spread and due to which the other Arab world is also
now boycotting the French products.
 Turkey Calls to boycott French goods are growing in the Arab world
and beyond, after President Emmanuel Macron criticised Islamists
and vowed not to “give up cartoons” depicting the Prophet
Mohammed.

 The teacher also became the target of an online hate campaign over
his choice of lesson material.
 Jordan’s foreign ministry strongly opposed the statement that
publication of cartoon depicting Prophet Mohammed is freedom of
 speech and also criticised the discriminatory and misleading attempts
which link Islam with terrorism
 Because of these outburst dozens of Kuwaiti stores are boycotting
French products, and uploading images on social media of workers
removing French Kiri and Babybel processed cheese from shelves.
 Even in Doha workers stripped shelves of French made jams and
yeast in branch of AI Meera supermarket chain.
 Monoprix and Carrefour are French supermarket chains and their
competitor in lucrative Qatari grocery sector is the Al Meera for-
market share in the.
 Al Meera and another grocery operator, Souq Al Baladi, released
statements late Friday saying they would pull French products from
stores until further notice.
 In early October president Macron of France has already said that
Islam religion is in the crisis and due to which this situation has
already sparked.
 On this the president of the Turkey said that French president need
mental check as he is treating millions of members of his state with
different faith.
 Secretary general of the Gulf Cooperation Council said that the
statement made by president Macron’s is irresponsible and it
increasing the spread of culture hatred.
Analysis
 Religion has a considerable impact on international business. Culture
can influence the business in different ways. Language problems,
pricing difficulties, and culture collisions are not uncommon,
especially in the beginning. The company must be able to handle
these difficulties in a way that is satisfying also for the other part.
 Mistakes can be difficult to correct and disrespect for foreign culture
can destroy the entire operation.
 In this case, the disrespect is not done by any foreign company who
is operating in the middle east but the disrespect of the Islamic culture
is done by the foreign company’s home country and their president
and hence in the fight between two nations the businesses are getting
impacted.
 Most of the middle east companies now have started to boycott the
French product because one of France's teacher named Samuel Paty
was killed and beheaded on 16 October by 18-year-old Abdullakh
Anzorov outside Paris, after presenting the images of Prophet
Muhammad cartoons to his pupils during a class about freedom of
speech.
 Soon after that Tayyip Erdogan the president of Turkey has made
public statements and called on Turks to boycott French goods amid
a row over France's tougher stance on radical Islam. He even urged
other world leaders to protect Muslims. 
 But the president of France Mr. Macron did not pay any attention to
the increasing dissatisfaction among middle east countries and paid
tribute to Mr. Smuel Paty, and also said that France will not give up
on cartoons depicting Prophet Muhammad.
 Depictions of the Prophet Muhammad are widely regarded as taboo
in Islam and are offensive to many Muslims.
 Due to this dispute between the two countries, the France companies
are suffering as the middle east has started to boycott their products.
 The statement made by president Macron has faced lot of criticism
from Muslim population countries. There also have been protests in
number of other countries including Pakistan, Kuwait, Jordan, Qatar,
Bangladesh, Iraq, Libya and Syria.
 France exported good worth of 45.8 billion dollars to predominantly
Muslim countries in 2019 with imports standing at 58 billion dollars.
 French mainly exports goods to Turkey worth of 6.7 billion US dollars,
Saudi Arabia 3.3 billion US dollars, Qatar 4.3 billion US dollars, UAE
3.7 billion US dollars, Morocco 5.3 billion US dollars, Algeria 5.5
billion US dollars, Nigeria 3.7 billion US dollars, Egypt 2.6 billion US
dollars and in Tunisia 6.7 billion US dollars.
 Whereas France imports good worth of 9.8 billion from Turkey, 7.5
billion from Saudi Arabia, 4.4 billion from Nigeria, 4.7 billion from
Algeria, 6.3 billion from Morocco and 5 billion from Tunisia.
 From the above data the impact of the boycott is difficult to ascertain,
with only isolated reports of sales of French goods being affected but
one thing is clear that both the countries are dependent on one
another.
 France is a major global exporter of agricultural products, with 3%
going to the Middle East, according to the ANIA industry lobby and on
the other hand France is dependent on the middle east countries for
the crude oil.
 Thales is the French company who exports weapons, aeronautics
technology and public transport systems to a number of Muslim-
majority countries. Clients include Saudi Arabia, the United Arab
Emirates (UAE), Turkey and Qatar, according to the company’s
website. Egypt and Qatar are among the countries that have ordered
the Rafale military jet from Dassault, which also views the region as a
big market for its private jets.
 Energy giant Total is French multinational integrated oil and gas
company present in many Muslim majority countries.  In Saudi
 Arabia, as well as in several other Gulf states, Total has investments
in exploration and production, and in some cases refining.
 Big brands like LVMH-owned Louis Vuitton or privately-owned Chanel
have stores across the Middle East, including in Saudi Arabia and
Dubai.
 Predominantly Muslim countries are said to be mostly importing
machinery, gas turbines, aviation goods, boilers, motor vehicle parts,
cars, tractors, iron and steel products, electric-electronics equipment
and medicine from France.
 On the other hand, France mostly imports goods such as crude oil,
natural gas, mineral oils, motor vehicles, motor vehicle and
automobile parts, satellite receivers, electric heaters, cables, clothing,
fruits, vegetables and dried fruits.
 France is the 10th biggest source of imports into Turkey and the
seventh biggest market for Turkey’s exports, according to the Turkish
Statistical Institute.
 Turkey is France’s top export market among Muslim-majority
countries with $6.6 billion in 2019, according to the data.
 Some analyst and economist said that they are expecting the boycott
to be short-lived similar to what happened in the year 2015 due to
murder of 12 people at the satirical magazine Charlie Hebdo in Paris
over the publication of cartoons of the Prophet Mohammed.
 Luxury brands may face more hit if a significant share of their exports
is heading in the Gulf countries as wealthy Middle Eastern clients
tend to buy luxury goods while traveling away from home.
 Still every lost export is lost revenue and hence there will be effect on
companies for whom sales to the Middle East are important, but this
 impact will be much smaller than what country has faced from the
Covid pandemic.
 Because of not respecting other countries culture and religion France
is facing backlash and the international companies are suffering from
economic loss if this boycott gets extended for longer period of time
or if the middle east countries start to reduce their dependency on
France then these multinational companies can face economic loss
France is trying to mend the bonds with Turkey.
7.London transport regulator refuses licence to Ola, citing
passenger safety

Article Date 05 Oct 2020

Source of Article Live mint
Link to the article:
https://www.livemint.com/companies/news/london-transport-regulator-
bans-ola-over-public-safety-failings-11601869123089.html
https://www.livemint.com/companies/news/london-bans-ola-for-breach-
in-safety-rules-11601944010338.html

 Ola Cabs is an Indian ridesharing company offering services that

include vehicle for hire and food delivery. The company is based in
Bangalore, Karnataka, India.
 TfL gave approval to the Ola in the July 2019 to start its Private Hire
Vehicles (PHV), under the PHV system, drivers need to apply for
licence and list their vehicle as a privately registered vehicle for hire.
 Ola entered the London taxi market in the month of February 2020
with over 25,000 drivers registered on its platform. London was the
28th city in the UK in which Ola operated after launches in
Birmingham, Bristol and Liverpool.
 But soon after its entry the London’s public transport authority
stripped Indian ride-hailing company Ola of its London operating
licence, saying that the taxi app was not fit and proper and they did
not want to put the passenger safety at risk.
 The London’s taxi market is dominated by Uber, Freenow, Bolt and
tradition black cab drivers who protested on the streets and blocked it
as influx of foreign companies is threat to their livelihood.
 After number of failures from the Ola Transport for London (TfL)
passed the statement stating that they refused to grant Ola, a
Softbank-backed operator, a new London private hire vehicle (PHV)
operator’s license as it cannot find it fir and proper to hold after
discovering the number of failures from the company that could have
risked public safety.
 TfL has discovered number of failures in Olas operations, including
breached of its licensing regime, which led to unlicensed drivers and
vehicle undertaking more than 1000 passenger trips on the platform’s
behalf.
 Ola was also accused of failing to notify TfL of the breaches when
they were first identified.
 TfL also said that, Ola had 21 days to appeal against TfL's decision.
 After the statement from TfL Ola passed an emailed statement saying
that they are working with TfL to address this issue in open and
transparent manner and that they will also appeal the decision of TfL.
 During this time period Ola will continue to operate as normal,
providing safe and reliable mobility for London.

Analysis

 Participants of taxi operations in London are of two types one which

provide taxis which picks up customers directly on the street and
other private-hire vehicles which must be pre-booked through a
license operator.
 The industry has faced challenging operating conditions over the past
five years due to increased competition and volatile demand
 The regulation of this taxi market is done by TfL.
 The Legal System in the London for transportation is mostly govern
by the Transport for London (TfL). TfL have standard practices and
conducts multiple safety checks.
 Transport for London (TfL) is a local government body responsible
for the transport system in Greater London, England. TfL is a major
player in the transport policy in London.
 TfL has responsibility for London's network of principal road routes,
for various rail networks including the London Underground, London
Overground, Docklands Light Railway and TfL Rail. It does not
control National Rail services in London, however, but does control
London's trams, buses and taxis, cycling provision and river services.
 TfL exercises the licensing functions for the taxis. Working as a two-
tier system, which means what there is no taxi monopoly. This system
lay downs the various rules relating to the whom to give taxi drivers
licence, vehicle license, and legal consequences if failed to follow the
legal obligations.

Issue with Ola in London market

 The competitors of Ola in the London market are Uber, Freenow, Bolt
and tradition black cab drivers.
 Softbank-backed Ola launched in London.
 During the launch of the Ola in London, Uber was facing legal
consequences from the TfL, and it was on the edge to get banned
due to pattern of failures in its operations.
 Ubers drivers were able to pick up the passengers without being
authorized. And drivers were able to do this by uploading their phots
to another driver’s account. This happened in at least 14,000 trips
and some of the drivers were unlicensed
  But Uber appealed against the decision of TfL and won the battle and
got backed its licensed.
 Similarly, TfL banned Ola due to safety issue one of the major issues
was that unlicensed drivers’ vehicles taking over 1000 trips on the Ola
platform.
 As company understands the importance of the regulatory body such
as TfL hence currently company is working closely with sought the
issues raised by a TfL in open and transparent manner.

International Business Concept

 In the above case macro environment of the company negatively

affected the business operations of Ola Cabs.
 When a firm operates in an economy and a society, there are factors in
its environment that it has no control over. These are elements of its macro
environment or its general external environment.
 Hence the success of the company, to a large extent will depend on the
company’s ability to adapt and react to the changes in the macro
environment.
 Primarily the company has to closely monitor the various elements of
macro environment. This will help them understand the dynamic nature of
the macro environment. It also helps them adapt to the constant changes
in the environment.
 The best tool for the analysis of the macro environment is the PESTEL
tool. This is an analytical tool for the business planning also it is a
strategic framework for understanding the external influences on the
business.
 One of the major factors in the PESTEL tool is the Legal factor.
 When company is manging its business at international level then
company have to keep in mind three types of legal system. Which are
Home Country’s Laws, Host Country’s Laws and International Laws.
 Hence when any company is handling its business operation in foreign
country it becomes company’s responsibility to obey all three legal
system. In the above case of Ola cabs home country is the India, and
host country is London.
 So, TfL is the transport regulating body in London and holds the power
to strip operating license to private vehicle providers.
 On the other hand, Ola holds the power to appeal in the court against
the TfL if company manages to convince the court that their business
operations are not compromising the customer safety then court can
grant the company to begin their business operations.
 8. WORLD EXPERIENCING ONE OF DEEPEST
RECESSIONS SINCE GREAT DEPRESSION DUE TO
COVID: WORLD BANK

Article Date 15 October 2020

Source of Article THEWIRE

Link to Article

https://thewire.in/economy/world-experiencing-one-of-the-deepest-
recessions-since-great-depression-world-bank

 The Great Depression was a serious global economic depression that

occurred mainly in the 1930s, starting in the United States.
 The timing of the Great Depression varied worldwide; it began in 1929 in
most countries and lasted until the late 1930s.
 It was the 20th century's longest, deepest and most pervasive
depression. As an indicator of how intensely the global economy will
collapse, the Great Depression is widely used.
 After a big fall in stock prices that began about September 4,1929, the
Great Depression began in the United States and became worldwide
news with the 29 October 1929 stock market crash, known as Black
Tuesday.
 Gross domestic product worldwide dropped by an estimated 15 percent
between 1929 and 1932. During the Great Recession, by contrast,
worldwide GDP plummeted by less than 1 percent from 2008 to 2009.
Some economies began to rebound by the mid-1930s.
 The negative consequences of the Great Depression continued until the
beginning of World War II in many countries.
 In both wealthy and poor nations, the Great Depression had catastrophic
consequences.
 Personal income, tax revenue, sales and prices declined, although more
than 50 percent fell in foreign trade. Unemployment increased to 23% in
the U.S. and to as much as 33% in some nations.
Cities around the world , especially those reliant on heavy industry, have
been hit hard. Construction in many countries has been effectively
halted.
 As crop prices dropped by about 60 percent, agricultural communities
and rural areas suffered. Areas dependent on primary sector industries
such as mining and logging, faced with declining demand and few
alternative sources of employment, suffered the most.
 The cause of the Great Depression is generally considered by economic
historians to be the sudden catastrophic crash of U.S. stock market
rates, beginning on October 24 , 1929.
 Some deny this conclusion, however, and see the stock crash as a result
of the Great Depression, rather than a cause.
 The downturn in the U.S. economy was the force that initially pulled most
other nations down; then, in each region, internal vulnerabilities or
strengths made conditions worse or better.
 Frantic attempts by individual nations to improve their economies by
protectionist policies, such as the U.S. of 1930. In other nations, the
Smoot-Hawley Tariff Act and retaliatory tariffs intensified the global trade
collapse, adding to the depression.
 By 1933, just four years ago, the economic downturn had pushed world
trade to one third of its level.
 The theories for contemporary mainstream economists are;
  Insufficient private sector demand and inadequate fiscal
spending (Keynesians).
 A decline in the supply of money (Monetarists) and hence a
financial crisis, debt reduction and bankruptcies.
 Insufficient spending, a decline in the supply of capital and marginal
debt led to dropping prices and more bankruptcies (deflation of Irving
Fisher 's debt).
 It was about the great depression in the world. Now coming back to
the headline, i.e., the world faces one of the deep recessions due to
Covid-19 since the depression period.
 The World Bank President David Malpass gave this comment,
referring to the Covid-19 pandemic as a 'catastrophic occurrence' for
many developed countries and the poorest.
 There was a possibility of economic recession, in which countries
were at greater risk of destructive debt crises. In the meetings, the
President of the World Bank said the same and based on their
behaviour.
 The World Bank was building as a big growth programme for
countries as they can in this fiscal year.
 Prior to this, the World Bank Board approved the expansion of health
emergency programmes for vaccines and therapeutics to up to $12
billion, and the distribution of vaccines to those countries that
otherwise have access.
 The globe is actually undergoing a K-shaped recovery for now. That
means that advanced economies, in particular for their financial
markets and for people who have jobs that can be accomplished by
working from home, have been able to provide help.
 But people in the informal economy have lost their employment and
rely on services for social security.
 The downward leg in the K is an increasingly desperate recession or
depression for developing countries, and particularly the poorest
developing countries, facing people in the poorest countries as a
result of job losses, loss of income and loss of remittances from
workers working outside the country.
 Malpass says that what they are trying to do at the World Bank is to
recognise that problem and provide extra support for social protection
for the poorest in countries, also recognising the agricultural
challenges.
 The next move for many countries would be a prolonged slowdown.
Economies would need to be versatile so that people can switch to
new jobs and positions, and the country can be prepared for a global
economy after Covid-19.
 Recognizing that the pre-Covid-19 economy will be complicated, he
acknowledged that one does not know exactly how and that it would
only develop over time.
 The World Bank offers social security networks to try to help provide
people with cash grants, such as a massive initiative in Brazil.
 The World Bank also supports a substantial Jordanian initiative in
Jordan and elsewhere around the world.
 As a crucial step for countries to reopen schools, the World Bank
encourages countries to invest in their first instance on health
initiatives, social programmes, and education.
 Infrastructure is a very important part of a country's growth in the long
term. Via the IFC, the World Bank has a broad undertaking working
on infrastructure that helps to provide energy and low-carbon ways,
 such as helping to provide clean water, helping to provide global
public goods, which means helping the nation to align itself and its
neighbours with the atmosphere and the climate that benefits them.
The main goals are all these.
 One of the problems with regard to infrastructure is that it has a very
low interest rate setting, and it should be an environment that offers
far more investment in infrastructure than is actually occurring.
 The documentation and standardisation of the quality of infrastructure
projects are a crucial step in this.
 It is important that the world move towards a funding system where
numerous infrastructure projects can be pooled in order to minimise
the cost to the whole package, and because of the disparity in the
contracts, it is difficult right now.
 One of the things the World Bank wanted to do, therefore, is to try to
better standardise some of the contracts and make them even more
transparent, which only helps to build up the infrastructure.
9.When Paytm stopped playing by the rules of Google

Article date 6 October 2020

Source Of Article Economic Times
Link
https://economictimes.indiatimes.com/tech/internet/when-paytm-stopped-playing-by-
the-rules-of-google/the-empire-strikes-back/slideshow/78508461.cms

 US tech giant Alphabet Inc's Google has said that it is going to

enforce Play Store tax on over 3 per cent of apps for not abiding by
its payment system policy.
 Soon after the declaration of the enforcement 30% tax on those apps
Google V/S Paytm war started when on September 18 Google
blocked Paytm form its Play Store for a few hours for violating its
policy on sports betting activities.
 Later Google resorted the app after fintech app removed the
cashback feature linked to a game on the app.
 After the removal of Paytm google face backlash from the Indian
developers with many saying that tech giant cannot force Indian app
developer/owners to sell digital services by compulsorily using its
billing system.
 This war escalated and eventually led to the launch of Paytm app
store. CEO Vijay Shekhar Sharma said Paytm Mini App Store will
empowers young Indian developers to leverage Paytm reach and
payments to build new innovative services.
 Due to unsatisfaction among the Indian app developer and launched
of Paytm app store Google extended the time for developers in India
to integrate with the Play billing system to March 31, 2022.
 After this Paytm made a public comment stating that google billing
system is biased and it is meant to artificially create Googles market
dominance.
 After the google extended the date for Indian companies to integrate
the new billing system Paytm chief executive made a public comment
stating that the extended time given by tech giant to the app
developer is the admission of guilt and that google know what they
are guilty of.
 The Paytm mini app store was launched by Paytm just weeks after its
block and this app store has mini-apps which are custom-built mobile
websites that give users app-like experience without having to
download them.
 More than 300 app-based service providers such as Decathalon, Ola,
Park+, Rapido, Netmeds, 1MG, Domino's Pizza, FreshMenu,
NoBroker have already joined the programme.

Analysis

 One of the demerits of MNC’s is that they exploit the companies in

the host country.  MNCs are financially very strong they adopt
aggressive strategies to expand their business because of which the
domestic companies get affected also MNC’s adopt all means to
eliminate competition and create monopoly in the market.
 Google is on the edge of becoming monopoly but this monopoly is
beneficial for the company and not for the consumers. This is creating
problem to the other business owners because they are not able to
compete with Google and hence it is becoming impossible to sustain
in the market. Hence monopolies created by government
or government policies are often designed to protect consumers and
 innovative companies, monopolies created by private enterprises are
designed to eliminate the competition and maximize profits.
 Ever since the introduction of Google Search in 1997, the worldwide
market share of all search engines has been rather lopsided. Google
has dominated the search engine market, maintaining an 86.86
percent market share as of July 2020.
 The company has also expanded its services to mail, productivity
tools, enterprise products, mobile devices and other ventures. As a
result, Google earned one of the highest tech company revenues in
2019 with roughly 160.74 billion U.S. dollars.
 In July 2020, online search engine Bing accounted for 6.43 percent of
the global search market, while market leader Google had a market
share of 86.86 percent. Chinese search engine Baidu's market share
was 0.68 percent.
 Many companies have said that Google has abused its monopoly
power through agreements with other companies that promote
Google's apps and place its ``search access points'' as a default on
browsers, phones and other devices. All of this drives more searches
of Google at the expense of its rivals
 Google's business works by scooping up personal data from billions
of people who are searching online, watching YouTube videos,
following digital map routes, talking to its voice assistant or using its
phone software. That data helps feed the advertising machine that
has turned Google into a behemoth.
 The above mention facts of the google is main reason because of
which it is facing criticism from the Indian IT sector, because of its
widespread business, Google is destroying the competition and
acquiring the monopoly status.
 The second largest search engine and the main competitor to Google
in the US is Bing by Microsoft who have current market share of
6.67%, and Yahoo! with 3.19%. As Google is dominating the search
engine market this leaves little room for competitors trying to outsmart
and outperform the search engine, which generates its revenue
through ads.
 According to the Statcounter GlobalStats search engine market in
India is dominated by the google with market share of 98.53% then
Bing who have the market share 0.92%. Third is Yahoo! with 0.45%
of market share. DuckDuckGo 0.07% and last is the YANDEX RU
with 0.01% market share. This figures clearly shows that the search
engine market of India is predominantly dominated by the Google.
 Also, it is expected that Google is going to expand its footprint in India
by investing very aggressively in country and going to open more
cloud base regions.
 This increasing involvement of Google in the country is threating to
the other start-up founder in India and also to the existing companies
working in the IT sector and hence these companies have reached
out to the Competition Commission of India (CCI) to lay down what
they believe have been anti-competitive polices employed by Google
in India.
 Google banned Paytm mobile app because app violated its gambling
policies by offering scratch card-based cricket promotions. Paytm was
back online in a matter of hours, but the simmering conflict between
Google and app developers was finally out in the open.
 Google has also issued similar notice to the Zomato and Swiggy,
objecting to similar gamification features. And after the ban of Paytm
the spart between the Indian start up and Google lit to the fuse and
 soon after that Google announced that companies going to be more
stringent with the billing policies and this means that apps on the
Google play store have to use the Play Store billing system for any in-
app purchases and Google would charge the app developer 30% of
the transaction cost as its commission.
 Because of this strict policies Indian start-ups have accused Google
of malpractices. The Indian start-up had two video conference to
come up with the strategies to combat what one of them called
Googles digital monopoly and one of the strategies is to approach
regulators and the courts.
 Indian government a few days ago announced that they are open to
the idea of developing a homegrown made-in- India app store and
also Paytm announced the launch of their own mini-app store to rival
Play Store. This are the positive steps towards the more independent
India and also to reduce the dependency of India start-ups on to the
Google.
 One of the major drawbacks of this is that Google Play Store had
2,700,000 apps and start-ups like Paytm and the 300+ companies
who have good market share have already joined the mini apps
venture.
 These big companies can afford to shift to an Indian app platform and
still be dominant in their sectors because they have enough brand
recall but for smaller and newer apps, Play Store gives more
audience and that to literally international and this can be one reason
because of which smaller companies can be reluctant towards the
idea of Indian base app store.
 And even if India made app comes pre-installed in Android
smartphone its not easy to compete with Google. Google has
developed actively over the years and had make sure that its
 platforms are more convenient and seamless for both developers and
users to use.
 This is not first time that someone has tried to give competition to
Google. Amazon’s app store has consistently trailed behind Google
and Blackberry had spent billion to lure the developers to its app
platform and hence convincing millions of people to change their
preference over night is not an easy task.
 And on this matter Google has completely denied the allegations of
exploitation and it argues that their billing system is not new they are
just being enforced now more strictly. It also claims that less than 3%
of developers with apps on Play Store sold digital goods and 97% of
developers with app on Play Store are already using the Google
Play’s billing.
 Though Google have delayed the imposition of 30% commission on
Indian start ups until April 2022 there is still unsatisfaction among the
Indian IT start ups.
 There is no doubt that Google is tech giant and it is on the edge to
become the monopoly in this sector. And hence actions taken up by
the Indian IT firms are mainly to stop Google from becoming
monopoly and controlling its business activities in the nation and also
protecting their business from the exploration.
10.Hero MotoCorp to sell, service Harley-Davidson bikes in
India

Article date 31 October 2020

Source Of Article Times Of India

Link

https://timesofindia.indiatimes.com/business/india-business/hero-motocorp-to-sell-
service-harley-davidson-bikes-in-india/articleshow/78892540.cms

 Hero MotoCorp is the largest two wheeler manufacturer in India, on

the road of a new journey as US cult bike manufacturer Harley-
Davidson joined hands to sell and service India 's luxury bikes.

 MotoCorp said that through a network of brand-exclusive Harley-

Davidson dealers and Hero 's existing dealership network in India ,
the company will market and service Harley-Davidson motorcycles
and sell components ,parts, general merchandise riding equipment
and apparel.

 Hero MotoCorp will produce and market a range of luxury

motorcycles under the Harley-Davidson brand name as part of a
licencing agreement.

 This partnership will mutually benefit both companies and riders in

India, as it brings together the iconic Harley-Davidson brand with
Hero MotoCorp 's solid distribution network and customer support.

 Last month, owing to a commercial deal with MotoCorp, Harley-

Davidson announced the closure of its only factory in India.
 Both companies have announced a distribution agreement and these
companies are the main manufacturers of motorcycles and scooters
in terms of unit volumes.

Analysis

 The reason behind the alliance between Harley-Davidson and Hero

MotoCorp is more important to Harley Davidson because its Indian
customer failed and the company closed its Indian service in
September 2020.

 Established in 1903, the company has been struggling to crack the

high volume , low-margin Indian market.

 It has consistently sold less than 3,000 of its famous bikes every year
since its opening in 2011.

 Between April and June, the company faced a loss of $96 million,
resulting in a loss of more than a decade.

 Therefore, the company shut down its production in the country and
also drastically reduced its sales operations.

 The reason behind the failure of Harley-Davidson in India is the

increasing high taxes and low-cost competitors such as Hero and
Honda of Japan.

 Harley-Davidson 's main rival is Enfield, who prices their bikes at

about $2,714, while Harley-Davidson sells their bikes at $6,105.
 Harley-Davidson charged $75 million in restructuring costs, which
made nearly 70 workers redundant and shut down its Bawal, northern
India, manufacturing facility.

 India is the largest automotive market, with about 17 million

motorcycles and scooters re-sold each year in India.

 Harley-Davidson is not the only business facing the problem on the

market, Toyota is stopping its expected expansion due to the high tax
regime of the country, General Motors left in 2017 after failing to
increase its market share in India, and Ford also said that India's
automotive industry is putting most of its assets into a joint venture
with Mahindra & Mahindra from India.

 Despite its loss, the company chose not to fully leave the Indian
market, thus changing its business model and establishing a
partnership with Hero MotoCorp.

 Hero MotoCorp and Harley-Davidson have formed a distributor

agreement. A distributor agreement is a contract that stipulates the
obligations of all parties between channel partners, and this is one
way to get into the international market.

 The contract is normally between a producer or vendor and a

distributor, but may include two distributors or a distributor and some
other channel entity in some instances.

 The basic elements of the distribution agreement include the length of

the contract, the terms and conditions of delivery and the sales area
protected by the agreement.
 The producer or seller must also decide whether exclusive or non-
exclusive would be the distribution arrangement.

 The stated distributor would be the sole distributor with the right to
sell the product within a single geographical area or within multiple
regions, by exclusive agreement.

 However, if non-exclusive, other distributors can be supplied by the

manufacturer or seller, often competing in the same market.

 Additionally, when deciding what kind of agreements to enter into, the

retailer or distributor must settle on a distribution strategy.

 A selective strategy involves a small number of distribution outlets to

cover the target markets of the channel partner. An intense strategy
seeks to position the commodity by broad distribution in front of as
many potential customers as possible.

 Usually, the latter is more important to consumer-oriented goods than

those intended for industrial markets.

 The considerations to be considered by both companies when

drafting a distribution contract are the terms and conditions of the
selling term under which the contract is successful marketing rights,
trademark licencing, the agreement's geographical area, results,
reporting, circumstances in which the contract may be terminated.

 A licencing agreement is a written agreement between two parties in

which the owner of the property authorises the use of the property by
another party under a particular set of parameters.
 Usually, a licencing agreement or licence agreement requires a
licensor and a licensee.

 Licensor is anyone who gives the licensee the right to use the IP,
brand owners, patent owners, trade secret owners, etc. may be
licensors, etc.

 Whereas a licensee is any company, association, or individual that

has been given legal permission to engage in an operation by another
body. Permission, or authorization, can be issued on an overt or
implicit basis.

 A licensee has therefore obtained legal permission from another party

to conduct some kind of business over which some power,
possession, or authority is held by the other party.

 For this authorization, known as a licencing fee, the licensee may pay
outright or may make payments dependent on the performance of the
business agreement, known as licencing revenue.

 In the case of Hero MotoCorp and Harley-Davidson, Hero MotoCorp

was approved by Harley-Davidson to produce and sell a range of
premium motorcycles under the brand name Harley-Davidson.

 So, Harley-Davidson is a licensor and licensee of Hero MotoCorp.

Name Licensing is the licencing arrangement for these two firms.

 In brand licencing, the licensee is allowed to use the trademarks and

logos of the licensor on its own branded goods, such as sports
clothing.
 Hero MotoCorp will be using this opportunity to add a few luxury bikes
to its portfolio because of this relationship.
 Hero MotoCorp does not have more than 200 cc capacity bikes, and
Karizma, powered by a 223 cc power plant, was the highest capacity
bicycle it has ever made. The Harley-Davidson partnership would
allow the Indian two-wheeler brand to break into the mid-capacity
market , enabling Hero MotoCorp to create a foothold in the premium
motorcycle segment through a collaboration with Harley-Davidson.
The partnership with Hero MotoCorp, on the other hand, would allow
Harley Davidson in India to manufacture reasonably inexpensive and
low-capacity motorcycles.