Delhi HC stays Future on Reliance deal

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Court hands Amazon a win, asks why Biyani, other FRL promoters should not be sent to prison

In a major victory for U.S.-based e-commence giant Amazon, the Delhi High Court on Thursday ruled that Future Retail Limited (FRL) and its promoters including Kishore Biyani “deliberately and wilfully” violated the order of an emergency arbitrator (EA) restraining FRL from going ahead with its assets sale deal with Reliance Retail.

Noting that the intention of FRL and its promoters “do not appear to be honest”, the high court directed attachment of the assets of Future Coupons Private Limited (FCPL), FRL, Mr. Biyani and 10 other promoters.

Justice J.R. Midha also directed Mr. Biyani and the other promoters to be present before the court on the next date of hearing on April 28. It additionally issued show-cause notices to all the promoters “to show cause why they be not detained in civil prison for a term not exceeding three months” for violation of the emergency arbitrator’s order.

The high court also imposed a cost of ₹20 lakh on Future Group which will be deposited in the Prime Minister’s Relief Fund for providing COVID-19 vaccines to senior citizens of Below Poverty Line (BPL) category.

It directed Future Group not to take any further action in violation of the interim order passed by the emergency arbitrator at the Singapore International Arbitration Centre (SIAC) on October 25, 2020. The high court’s order came on a plea of Amazon, which has 49% stake in FCPL, seeking enforcement of the EA award.

Amazon had contended that it had invested ₹1,43l crore in FCPL with the clear understanding that FRL would be the sole vehicle for its retail business and its retail assets would not be alienated without its consent and never to a Restricted Person, including the Mukesh Dhirubhai Ambani (MDA) Group.

Amazon stated that FRL had taken various steps to transfer the retail assets to the restricted person, MDA Group, in violation of the EA order and that the firm was continuing with it.

‘Breached agreements’

“The respondents (Future Group) have breached the agreements. However, there is no remorse. The intention of the respondents does not appear to be honest,” the high court remarked.

FCPL, which holds 9.82% in FRL, has objected to the enforcement of the EA award on various ground including that the EA is not an Arbitrator or Arbitral Tribunal. The high court rejected this saying, “The interim order dated 25th October, 2020 is legal, valid and enforceable as an order of the Court”.

FRL had also argued that Reliance was acquiring the retail and wholesale business as also the logistics and warehousing business from the Future Group as going concerns on a slump sale basis for a lumpsum aggregate consideration of ₹24,713 crore. The high court, however, rejected FRL’s argument that if this scheme fell through, it was inevitable that FRL would go into liquidation.

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World going through unprecedented chip shortage, China trade body says

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China is the world’s largest buyer of semiconductors, but domestic production is marginal. Sales in China grew 17.8% in 2020 from a year earlier to 891 billion yuan ($137 billion), according to CSIA.

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The world is going through an unprecedented chip shortage, Zhou Zixue, a senior official with the China Semiconductor Industry Association, said on Wednesday, after semiconductor sales grew 18% last year.

“If you are an experienced player, you will remember that in 1999 there was a similar crisis in this industry, but it was way smaller,” Zhou, chairman of Semiconductor Manufacturing International Corp (SMIC), said in remarks at SEMICON China.

“We have to deepen our cooperation, we have to give more attention to innovation. Only by doing that our industry can control the challenges facing us.”

Also Read | U.S. Senate mulls $30 bln in funding to boost chipmaking sector, source says

China is the world’s largest buyer of semiconductors, but domestic production is marginal. Sales in China grew 17.8% in 2020 from a year earlier to 891 billion yuan ($137 billion), according to CSIA.

China’s need to cut dependence on overseas chip companies became evident last year when U.S. sanctions on Shenzhen-based hardware maker Huawei Technologies Co Ltd prevented it from sourcing components, crippling a once-booming smartphone business.

Not long after that, the spread of COVID-19 disrupted supply chains and eventually caused a chip shortage. Once concentrated in the automotive industry, the crunch has now spread to a wide range of electronics and reached the uppermost parts of the chip supply chain. ($1=6.5 yuan)

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Draft e-commerce policy moots conformity assessment procedures for online platforms

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These procedures are related to testing, verification and certification of goods and services, among others

Conformity assessment procedures will be put in place to verify that goods and services sold on e-commerce platforms meet required standards and technical regulations, according to the draft e-commerce policy.

The policy, which is under discussion, also stated that actions and things which cannot be done by the online platform entities “can also not be done” by any of its associates and related parties.

Government may, from time to time, notify parties which fall in the definition of associates and related parties, it said.

“Conformity assessment procedures will be put in place in order to verify that goods and services sold, on e-commerce platforms, meet required standards and technical regulations, as prescribed by sector specific regulations/rules,” the draft said.

These procedures are related to testing, verification and certification of goods and services, among others.

It also said that a long-run endeavour will be to convert GeM (Government e-marketplace) into a marketplace where “ordinary consumers” could procure, increasing the efficiency in the Indian economy.

Currently, only the government departments and agencies are allowed to procure goods and services from the GeM portal.

According to the draft policy, an e-commerce operator operating in marketplace or hybrid mode will have to manage its relationship with sellers on its platform in an agnostic manner and without being partial to any of its sellers.

It has talked about areas like definition of e-commerce, code of conduct, creation of conducive environment, enhancing exports, monitoring, meeting regulatory challenges of the sector, handling of data, free and informed choice of consumers, fair competition, anti-counterfeit and anti-piracy.

Last week an inter-ministerial meeting chaired by officials of Department for Promotion of Industry and Internal trade (DPIIT) had discussed this draft.

The draft has defined e-commerce as the business activities of sale, marketing, distribution of goods or provision of services through the Internet or other information networks and it would be equally applicable to entities with foreign and domestic investments.

“An e-commerce operator shall mean any entity that is engaged in the operational activities of selling goods or providing service through the internet and other information network, including e-commerce platform operators, operators on platform and e-commerce operators selling goods or providing service via their self-built website or other web service,” it added.

Further it has stated that the government will work towards streamlining of regulatory processes to ease the burden of compliance for activities related to e-commerce.

The government would endeavour to bring offline sellers online and provide support for aiding computerization, digital payment enablement and on-boarding of those sellers that currently do not have such facilities.

“Back-end channel integration and hyper-local models are important ways in which growth of the sector can be inclusive and will be encouraged, so as to integrate advantages of the offline retail trade with those of online sale,” it said.

To promote exports through the e-commerce medium, the draft has stated that steps will be taken to provide online lending, credit rating, finance, and transportation support to SMEs through private and public sector banks.

The digital integration of multiple interfaces such as Central Board of Indirect Taxes and Customs (CBIC), Department of Posts (DoP), Directorate General of Foreign Trade (DGFT) and Goods and Service Tax Network (GSTN) for facilitating e-commerce exports shall be undertaken, it added.

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Tata’s plan to take majority stake inBigBasket

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(Adds details)

, March 12 (Reuters) – Indian conglomerate TataSons plans to buy a majority stake in Alibaba-backedonline grocery seller BigBasket, a filing with thecountry’s antitrust body showed on Friday.

The deal, if approved, would put Tata – a more than150-year-old group with interests in everything from luxury carsto software – in direct competition with Amazon,Walmart’s Flipkart and an upstart grocery service fromReliance Industries, backed by billionaire MukeshAmbani.

In the filing with the Competition Commission of India, TataDigital Ltd, a wholly owned unit of Tata Sons, proposed to buy64.3% of an entity that runs business-to-business sales forBigBasket.

Media agencies have reported that the group aims to takecontrol of more than 60% of BigBasket, buying out Chinesee-commerce giant Alibaba’s stake.

The proposal comes as e-commerce sales, especially of foodand groceries, have exploded in India as the COVID-19 pandemicspurred a shift to online shopping.

BigBasket’s rivals are expected to spend heavily on thee-grocery business.

Flipkart has announced plans to expand to more Indiancities, while Reliance’s digital unit – which is likely tosupport its grocery service – has raised more than $20 billionfrom investors including Facebook and Alphabet’sGoogle.(Reporting by Sachin Ravikumar in Bengaluru; Editing by MajuSamuel and Sriraj Kalluvila)

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PLI: Centre’s nod for 33 API applications

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The government has approved 33 applications with a committed investment of ₹5,082.65 crore under the production linked incentive scheme for active pharmaceutical ingredients, an official release said on Thursday.

Setting up of these plants will make the country self-reliant to a large extent in respect of these bulk drugs, it noted.

The Department of Pharmaceuticals had unveiled a PLI scheme for the promotion of domestic manufacturing in four different target segments with a total outlay of ₹6,940 crore for the period 2020-21 to 2029-30.

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India GDP: Double digit GDP growth expected in FY22: Report | India Business News – Times of India

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NEW DELHI: As economic activities gather pace and investor sentiments revive, GDP growth is likely to enter a double-digit growth trajectory and may grow at more than 11 per cent in the next financial year, showed a report by PHD Chamber of Commerce and Industry.
A sharp recovery in GDP growth in Q3 FY 2020-21 at 0.4 per cent as compared with a contraction of 7.3 per cent in Q2 and 24.4 per cent in Q1 2020-21 (as per revised NSO estimates) is a result of impactful reforms undertaken by the government since March 2020, said Sanjay Aggarwal, president, PHD Chamber of Commerce and Industry.
“As a result of recovering investor sentiment, the economy has potential to accelerate at 11 per cent growth trajectory in the next financial year 2021-22 as envisioned by the FY 2020-21 Economic survey of the Government of India,” he said.
Aggarwal noted that the series of broad-based policy measures undertaken by the government during the last 11 months have enhanced the economic activity at significantly higher level
PHDCI Economy GPS Index was 103 in February 2020, with an improvement of 19 points in February 2021 over February 2020.
The trend in PHDCCI Economy GPS Index shows that the Indian economy is moving forward in the direction of improved momentum as compared to that of its level in February 2020, according to the President of the industry body.
The PHDCCI Economy GPS Index during the period April-February of FY 2020-21 stands at 92.4 as compared with April-February FY 2019-2020 at 99.5. The growing trend of PHDCCI Economy GPS Index indicates a stronger outlook of the Indian economy in the FY 2021-22, he said.

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Buy only from ‘trusted sources’: Govt. to telcos

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Telecom service providers will be able to procure equipment only from ‘trusted sources’ as defined by the government.

This follows the Department of Telecom on Wednesday amending licence conditions for equipment procurement.

The move, seen as a step towards excluding Chinese telecom equipment makers such as Huawei and ZTE, comes into effect from June 15, and would require service providers to take permission from the National Cyber Security Coordinator (NCSC) for upgradation of existing networks utilising equipment not designated as trusted products.

“The government through the Designated Authority [the NCSC] will have the right to impose conditions for procurement of telecommunication equipment on grounds of defence of India, or matters directly or indirectly related thereto, for national security,” as per the government notification.

It added that with effect from June 15, the licensee will only connect ‘trusted products’ in its network and also seek permission from the designated authority for upgradation of existing network utilising equipment not designated as ‘trusted products.’

These directions, it said, would not affect ongoing annual maintenance contracts (AMCs) or updates to existing equipment already inducted in the network as on the date of effect.

The NCSC will notify the categories of equipment for which the security requirements related to ‘trusted sources’ are applicable and may also notify a list of designated sources from whom no procurement can be done. The procedure for inclusion in the list of trusted sources will be issued by the NCSC.

Reacting to the decision, Tony Verghese, partner, J. Sagar Associates, said that the amendment was an expected move in light of the 5G auctions. “The curbs imposed by Press Note 3 on FDI, is prompting policy changes in various sectors. The recent incidents allegedly by Chinese hackers, has definitely hastened the process with the government inclined towards a new national strategy to strengthen the country’s security.”

“Telecom equipment plays a vital role in telecom connectivity and data transfer, which has a direct impact on the national security of India. Therefore, such a policy decision, which definitely impacts significant market players, clearly conveys the Government’s stand on national security,” he added.

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SC backs camera makers Nikon, Samsung

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The Supreme Court on Tuesday handed multinationals Nikon, Canon, Sony and Samsung a major relief when it quashed an order of the Central Excise and Service Tax Appellate Tribunal (CESTAT) and upheld an exemption given to the companies from paying basic customs duty for import of their digital still image video cameras.

The exemption from paying duty charges was on the basis of a 2005 notification, which was amended in 2012.

The companies had moved the apex court against CESTAT’s 2107 order denying them the exemption, leading to confiscation of goods, demand of interest and imposition of penalty under various sections of the Customs Act of 1962.

DRI action

The CESTAT order was based on a Directorate of Revenue Intelligence (DRI) action to recover the duty from the companies for cameras imported by them to Delhi in 2012. An Additional Director General of DRI had issued notice under Section 28(4) of the Customs Act to the companies for recovery of duty.

The DRI action was taken despite the cameras having been cleared for import after a team led by a Deputy Commissioner of Customs at the Delhi airport found them eligible for duty exemption.

The DRI had argued that Customs authorities were “induced” by “willful misstatements and suppression of facts” about the cameras.

‘No authority’

A three-judge Bench led by Chief Justice of India Sharad A. Bobde, in a 21-page judgment said the DRI had no authority to initiate recovery against the companies.

The DRI’s Additional Director General was not even the “proper officer” to authorise recovery, it held.

Justice Bobde, who wrote the judgment, said the “proper officer” was the Deputy Commissioner of Customs or his successor as it was his office which had assessed the cameras initially and found them fit for exemption per the notification.

“Where one officer has exercised his powers of assessment, the power to order re-assessment must also be exercised by the same officer or his successor and not by another officer of another department though he is designated to be an officer of the same rank. In our view, this would result into an anarchical and unruly operation of a statute,” the bench said in its verdict.

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