Arvind's Newsletter

Advance warning for my readers that there will be no newsletter from June 5 onwards for couple of weeks as I am travelling overseas.

1.Rare earth supply pinch puts India's EV makers on a six-week clock: Business Standard

China’s new export restrictions on rare earth metals (REM), which took effect on April 4, are already causing delays in supply to Indian automotive manufacturers and are expected to disrupt production — especially of electric vehicles (EVs) — as original equipment manufacturers (OEMs) in the country have inventories sufficient for only six to eight weeks, say industry experts.

 However, sources reveal that the request by a joint delegation comprising representatives from the Society of Indian Automobile Manufacturers (Siam) and the Automotive Component Manufacturers Association of India (Acma) to meet senior Chinese government officials to raise concerns over the situation is yet to be cleared by the authorities on both sides. The regulations have created procedural bottlenecks, in addition to shipment delays, threatening to hit production and result in price increases in the coming weeks.

2.How Uber came from the brink to dislodge Ola: Economic Times

(Well it was waiting to happen not just because of what Uber did , but because Bhavish Aggarwal was to busy trying to address Ola’s electric two wheeler woes)

“When the world was limping back from the Covid devastation, few businesses were sure about their future. And Uber India was no exception. When it sold its food-delivery business to Zomato and shrunk its size, speculation was rife whether Uber will exit India ride-hailing business too.

Cut to 2025. Uber has emerged as the biggest cab-hailing platform in India, with a clear lead over Ola. Bhavish Aggarwal-led domestic rival dominated Uber for much of the past decade despite the latter’s global heft. But that has changed. According to industry estimates, Uber holds 50% of the taxi car category, the most important mobility segment accounting for the biggest share of gross booking value. The other half of the market is divided between Ola, Rapido and smaller players including Namma Yatri.

Uber is seen as the most active cab-hailing platform launching a dozen new services in the past one year alone. It has outdone Ola in terms of app downloads, monthly active users, and daily trip numbers.

Uber took a view that rather than expanding its geographic footprint, it must deepen its presence in the existing cities. The number of cities that it has entered remained around 125 for the past couple of years. Uber decided to push growth at both ends of the spectrum — popular and premium — through multiple offerings in the existing places.

3.IndiGo takes bigger leap, hedges Turkish Airlines partnership; signs MoU with Delta, Air France-KLM and Virgin Atlantic: Mint

IndiGo, India’s largest carrier by fleet and domestic market share, signed a Memorandum of Understanding (MoU) with Delta Air Lines, Virgin Atlantic, and Air France-KLM to build a partnership to connect traffic to Europe and North America. This comes amid the flak it recently received for its ties with Turkish Airlines and the subsequent approval by the Directorate General of Civil Aviation (DGCA) for extension of damp lease of Turkish Airlines planes for only three months. 

Airline partnerships take months to materialise and years to build and it is unlikely that the recent flak led IndiGo to move in this direction. In fact, the airline has been a partner to Air France, KLM and Virgin Atlantic for the last few years and has been feeding their network out of India from multiple cities in the country.

IndiGo has been in partnership with Air France-KLM and Virgin Atlantic since 2022, allowing Air France, KLM and Virgin Atlantic passengers to access more than 30 points in India. With announcements to fly to Manchester and Amsterdam, along with plans to fly to London and Copenhagen in due course of time, the airline will offer 30 points within Europe on KLM via Amsterdam, to the United States and Canada from Amsterdam with Delta and KLM and flights to the United States from Manchester on Virgin Atlantic.

This opens up new opportunities for passengers from India to fly to Europe and North America via European hubs and possibly mimics the Jet Airways partnership with KLM, when it had a scissor hub at Amsterdam. Delta Air Lines plans to resume services to India with non-stop flights between Atlanta and Delhi in future. This will pave the way for IndiGo to offer passengers more options.

4.Indian tech fund sees domestic opportunity akin to 1990s Silicon Valley: Financial Times

The investment opportunity in India’s technology sector is akin to Silicon Valley in the 1990s or China in the 2000s, according to the founders of an Indian tech-focused hedge fund set to launch next year, as foreign capital shows signs of returning to the market.

India-based Panvira aims to raise $200mn in foreign capital to invest from January 2026 in the burgeoning tech sector of the world’s most populous country. The fund will focus on public rather than private markets to capitalise on a surge of initial public offerings amid sky-high valuations.

“If you want to participate in the value creation of a tech company between $2bn and $10 bn in the US, you would have to go through [private equity], while in India that would be done through a public tech investor,” said Panvira co-founder Vaibhav Singh, who previously led Asian equities coverage at US hedge fund Coatue.

Panvira’s plans highlight renewed interest among global asset managers in India after an economic downturn hit corporate earnings and sparked an exodus of foreign investors last year.

5.A nationalist boxer-turned-historian backed by US President Donald Trump narrowly won Poland’s presidential election coming from behind: AP News

Karol Nowrocki’s victory is a blow to Poland’s centrist, pro-Brussels Prime Minister Donald Tusk, who has sought to loosen abortion restrictions, pass a civil-partnership law, and reverse legislation that the European Union said politicised the judiciary — efforts the new head of state could veto or slow.

The campaign focussed on security and migration, issues closely tied to Poland’s relationship with Ukraine. But while both presidential candidates pledged to maintain support for Kyiv, Nawrocki was more critical of Ukrainian President Volodymyr Zelenskyy and took a harder line against Ukrainian refugees in Poland, accusing them of taking advantage of Polish generosity.

6.Negotiators from Ukraine and Russia will meet today in Istanbul for a second round of peace talks, even as both sides hammer each other on the battlefield

Moscow said it shot down 162 Ukrainian drones overnight, hours after Kyiv carried out an audacious attack in which it claimed to have destroyed 41 Russian planes using drones smuggled across the border.

Kyiv, meanwhile, accused Moscow of firing nearly 500 drones and missiles, with one strike killing 12 Ukrainian soldiers at a training ground. The upsurge in fighting underscores the challenges of reaching any deal, despite persistent US pressure on both sides to agree a truce: “For now,” Kyiv’s former foreign minister wrote in Foreign Affairs, “a ceasefire in Ukraine looks impossible.”

7.Landmark Cancer Study on casual relationship between exercise and cancer outcomes: AP News

An aerobic exercise regimen can lower death rates from colon cancer and reduce recurrence rates by roughly one-third, a new study has found. The study is the first to show a causal relationship between cancer outcomes and exercise.

Researchers tracked 889 colon cancer patients from 2009 to 2024 who had received chemotherapy. Roughly half were assigned readings on a healthy lifestyle, while the other half were assigned a personal coach. The coach met with patients every few weeks for three years, helping them establish and maintain an exercise regimen including walking, biking, kayaking, skiing, swimming, or running. They aimed for the equivalent of at least three 45- to 60-minute walks each week.  

Eight years on, the intervention group saw a 28% reduction in cancer recurrence and 37% fewer deaths. The study is the first randomised controlled trial (RCT) of its kind and strengthens the case for an exercise intervention as the standard of care.

8.How to break China’s stranglehold on critical minerals: Financial Times

One potential fix is using AI to cut extraction costs.

“Greenland knew what it was doing when it warned that if US and European miners would not help it exploit its minerals, it would turn to China. Geopolitical and trade tensions have spotlit China’s dominance of critical elements. Markets alone will not reverse this.

Minerals such as copper, lithium, cobalt and rare earths, which are essential for grids and batteries but also phones and missiles, are overwhelmingly mined and refined in China, which benefits from supportive policy, scale and efficient production. The country refines about 70 per cent of all but one of the 20 minerals analysed by the International Energy Agency.

Mining the stuff elsewhere is expensive. Capital costs for projects in countries that are not already global leaders are typically 50 per cent higher, the IEA reckons. Lithium refining, for example, costs $60 per kg in the top three countries versus $103 in the rest of the world. Investors must also contend with rising energy costs and royalties, regulation and price volatility.

There are three potential fixes. The first is for governments to step in. Subsidies are no longer a no-go area. Both the US and EU have mobilised tens of billions of dollars for chips, for example. Australia has ponied up loans for a rare earths refinery to be developed by Iluka Resources, supplementing initial funding when construction costs over-ran.

The second potential fix is to find new, cheaper ways of extracting minerals. Direct lithium extraction from geothermal brines — using membranes to filter out the desired element, for example — can be more cost-effective than traditional methods. Recycling boosts supply, when paucity of feedstock or the release of toxic gases can be managed.

Artificial intelligence may also help. The IEA reckons that using it for geological exploration could cut drilling costs by as much as 60 per cent and — best-case scenario — increase discovery success rates fourfold.

And last: find alternatives. Cobalt-rich batteries are still duking it out with lithium iron phosphate batteries, which are winning in China. But manganese-rich versions, such as those under way at Europe’s Umicore chemicals, are gaining traction.

9.In a world first, Brazilians will soon be able to sell their digital data: Rest of World

Brazil is testing a digital wallet program that allows users to monetize their data.

A federal bill, when passed, would turn data into commercial assets for citizens — the first such proposal in the world.

The pilot, a partnership between the public and private sectors, is ahead of similar initiatives in some U.S. states.

The pilot involves a small group of Brazilians who will use data wallets for payroll loans. When users apply for a new loan, the data in the contract will be collected in the data wallets, which companies will be able to bid on. Users will have the option to opt out. It works much like third-party cookies, but instead of simply accepting or declining, people can choose to make money. 

The “dWallet” allows users to deposit the data generated by their daily activities into a “data savings account.” After a user accepts a company’s offer on their data, payment is cashed in the data wallet, and can be immediately moved to a bank account.

10.India Opens Flagship EV Policy To Global Carmakers But Tesla Not Coming: NDTV Profit

The central government has notified final guidelines of its flagship EV policy to attract global carmakers to make in India for the world, but Tesla Inc. isn't likely to be one of them. “Mercedes-Benz, Volkswagen-Skoda and Hyundai Motor Co. have already shown interest,”

Heavy Industries Minister HD Kumaraswamy said during a press conference on Monday. “Tesla, we are not actually expecting (interest) from them… They are not interested in manufacturing in India,” the minister said. “As from what we know, Tesla plans to open showrooms in India to sell cars.”

Announced on 15 March 2024, the ‘Scheme to Promote Manufacturing of Electric Cars in India’ offers to slash import duty to 15% on electric cars priced at least $35,000 if their maker invests at least $500 million to set up a local plant within three years.Up to 8,000 cars can be imported annually at this reduced rate for five years.