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Good morning, and welcome to a new financial year! We have a big news week ahead of us, as Donald Trump’s tariffs kick in tomorrow. We will keep an eye on all the developments. (Any guesses on how many concessions will be proposed and withdrawn before the next India Business Briefing lands in your mailboxes on Friday? Email us.)
In today’s newsletter, an academy set up by five-times world champion Viswanathan Anand and venture fund WestBridge has been churning out some remarkable chess victories for India. But first, the government has announced a $2.7bn production-linked incentive scheme for the electronics sector in India.
Make (more) in India
India is doubling down on its production-linked incentive scheme by expanding it to the electronics sector, with the government pledging to spend $2.7bn to attract global and domestic investment. The aim is to boost manufacturing of components such as display screens, batteries, camera modules and printed circuit boards in India, and the incentives will be tied to the amount of capital the companies invest, turnover, and the jobs they create directly. The government expects nearly Rs600bn ($7bn) in investment and 91,000 jobs to be created over five years.
India now has more than 300 mobile phone manufacturing units, and it is the second largest mobile phone producer in the world, according to official data. So it is not surprising that the government wants to continue subsidising the industry by expanding the PLI scheme to cover electronic components. More specifically, Apple’s iPhone manufacturing facilities run by Foxconn and Tata Electronics are two of the bigger beneficiaries of the original scheme, scheduled to end by 2026.
Unfortunately, the PLI scheme has been less successful in other sectors. The government is allowing a $23bn programme aimed at incentivising domestic manufacturing investment across various sectors to lapse, according to various reports. Launched in 2020, the ambitious project was aimed at attracting companies looking to diversify their supply chains from China. The intention was to increase the share of manufacturing in the Indian economy from 15.4 per cent to 25 per cent by 2025. But it has instead decreased to 14.3 per cent. Some companies reportedly failed to get their projects off the ground, while others faced delays in getting subsidies.
Why did the PLI work for one industry, but not others? In my view, the mobile phone companies that invested were global leaders which had the financial and political clout to cut through India’s infamous red tape. This is not easily done by other, smaller establishments. The fact that private capital is not willing to invest in manufacturing despite the incentives speaks to the on-the-ground challenges in setting up and running a factory. Throwing cash at the problem through subsidies won’t be enough; the government needs to undertake a massive overhaul of the regulatory and administrative processes if it really wants to boost manufacturing.
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Check Mate
This should have been a question for India Business Briefing’s “Buzzer round” section. What connects Pranav Venkatesh, Gukesh Dommaraju, Rameshbabu Praggnanandhaa and Vaishali Rameshbabu, other than the fact that they are some of the best chess players in the world? The answer is that they all trained at WestBridge Anand Chess Academy.
Popularly known as Waca, the academy was set up by venture capital firm WestBridge and five-times world chess champion (and star of last week’s “My mantra”) Viswanathan Anand, with a mandate to pick chess players who have the potential to compete at elite levels and train them to get there. The players are handpicked by Anand, and the six-year-old academy’s success can be gauged by the performance of the names I listed earlier.
Gukesh, Vaishali and Praggnanandhaa are household names in India now, and this is no mean feat when in a country obsessed with another sport: cricket. Cricket’s immense success has made it a black hole, sucking in all the money and eyeballs. Sporting academies for premier athletes have now demonstrated themselves to be a workable model, especially in individual sports such as chess, shooting and badminton. But the numbers are still rather small.
India has expressed its intention to bid for the summer Olympic Games in 2036. If we do win, the first steps should be overhauling sport administration in the country, which is currently run by political appointments, and a larger share of funding given to sports that are not cricket. Bringing in public-private partnerships would be the best way to infuse funds and introduce a framework that rewards rigour and results.
Do you agree? Do you think it’s a good idea for India to host the 2036 Olympics? Hit reply or email us at indiabrief@ft.com
Go figure
In its latest attempt to keep beleaguered telecoms venture Vodafone Idea alive, India’s government has asked that the money it is owed for spectrum allocation be converted to equity. These are the details.
48.99%
Govt’s stake post deal
My mantra
“One thing which I try to do is be a stickler for time. If things can’t be done within the time allotted, then obviously we are not being productive. An important element of productivity is to be sharp, both with the time you allot for meetings and what you accomplish during it.”
Amitabh Chaudhry, chief executive, Axis Bank
Each week, we invite a successful business leader to tell us their mantra for work and life. Want to know what your boss is thinking? Nominate them by replying to indiabrief@ft.com
Quick question
Do you think HSBC was right in firing some of its investment bankers on bonus day and giving them no bonuses? Take part in our poll, here.
Buzzer round
On Friday we asked: What connects Claudia Sheinbaum, Volodymyr Zelenskyy, Emmanuel Macron and Keir Starmer other than the fact that they are leaders of their respective countries?
The answer is that they have all seen a rise in popularity in their home countries as they battle Trump’s threats.
We got several responses. But only Aniruddha Dutta got the right answer. (And was first too, but that’s almost a given these days! We love reading through all your answers, keep them coming. Competitive readers should consider setting an alarm for 7am on Fridays. Lol!)
Thank you for reading. India Business Briefing is edited by Tee Zhuo. Please send feedback, suggestions (and gossip) to indiabrief@ft.com.
