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.India’s tourism boom: Sector to double to ₹42 trillion by 2035, driven mainly by domestic travel, says WTTC: Mint

Travel and tourism will contribute almost ₹42 trillion and about 64 million jobs to India’s economy by 2035, but the country will need to invest more heavily in infrastructure and destination marketing to stay competitive and maintain the growth momentum in the sector, the World Travel & Tourism Council (WTTC) said.

The sector has bounced back, with international visitor spending touching an all-time high of ₹3.1 trillion in 2024, beating pre-pandemic levels, according to new data from the WTTC. Domestic travellers pushed the total spending within the country to ₹15.5 trillion last year, up 22% from 2019, according to the council's latest Economic Impact Research.

The report shows a significant recovery in international travel following the pandemic, which had shifted focus largely to domestic tourism.

WTTC president and CEO Julia Simpson, who’s in India this week, told Mint that India has what it takes to become one of the world’s most exciting travel economies—but now’s the time to market it better.

2.HDB Financial Services gets Sebi approval for Rs 12,500 crore IPO: Business Standard

HDB Financial Services, the non-banking finance (NBFC) arm of HDFC Bank, has received approval from the Securities and Exchange Board of India (Sebi) to launch one of the largest initial public offerings (IPOs).

HDB’s IPO will be the largest NBFC IPO and the fifth-largest overall to hit the domestic markets.

The lender had filed a draft red herring prospectus with the markets regulator in October 2024 for its IPO, which involved an offer for sale of Rs 10,000 crore by HDFC Bank and a fresh issue of Rs 2,500 crore. 

HDFC Bank owns a 94.36 per cent stake in HDB Financial Services. After the IPO is completed, HDB Financial Services will continue to be a subsidiary of HDFC Bank.

3.Reliance Industries Limited Only Indian Firm in Top 30 Listed Global Tech Cos: Economic Times

Billionaire Mukesh Ambani's Reliance Industries is the only Indian firm to have made it to the listing of top 30 publicly traded global technology companies, as per a 340-page report, titled 'Trends - Artificial Intelligence', that delves into the rapid global adoption and transformative impact of AI technologies.

The report lists global technology companies by market capitalisation. Top eight slots on the list are occupied by US technology giants - Microsoft, Nvidia, Apple, Amazon, Alphabet, Meta Platforms, Tesla and Broadcom.

Taiwan's TSMC is ranked 9th, followed by China's Tencent. Reliance, with a market capitalisation of USD 216 billion, is ranked 23rd, according to the list.

4.India and Europe agree on nearly half of trade deal ‘chapters’: Financial Times

India and the EU have reached consensus on almost half of the topics to be covered by a trade deal they hope to seal this year and have agreed that the pact will not cover some “sensitive” farming products such as dairy, according to people with knowledge of the talks.

The people said negotiators had agreed eight out of roughly 20 deal “chapters”, each covering topics such as rules of origin or intellectual property rights, after the EU in February stepped up efforts to bolster economic ties with the world’s fifth-largest economy.

The progress will fuel hopes that a deal between New Delhi and Brussels can help offset some of the impact on both sides’ trade from the tariffs imposed or threatened by US President Donald Trump, while the exclusion of dairy products will come as a big relief to Indian farmers and milk processors.

5.'Operation Spiderweb’: How Ukraine destroyed over a third of Russian bombers: reporting from Yahoo News, Guardian and Financial Times

“Ukraine’s Security Service (SBU) reported that over a third of all Russian missile carriers have been hit in a coordinated drone attack aimed at different airfields in Russia located thousands of kilometres apart. More than 40 aircraft are known to have been hit, including the A-50, Tu-95, and Tu-22 M3, causing overall damage of more than €6 billion.”

After more than a year of planning, an attack called Operation Spiderweb deployed more than 100 drones from within Russian territory, delivering a level of damage most experts (and at least one non-expert) thought unthinkable. "Drones were smuggled into Russia and placed inside containers, which were later loaded on to trucks. With the trucks positioned near Russian bases, the roof panels of the containers were lifted off by a remotely activated mechanism, allowing the drones to fly out and begin their attack."  Ukraine has just rewrote the rules of War.

6.The OECD cut its forecast for global growth for this year and next, citing the impact of Washington’s trade war: Bloomberg

The slowdown will be concentrated in the US and its biggest trading partners Canada, China, and Mexico, and growth could fall short of even the latest projections : The rich-country grouping based its projections on tariffs remaining at their current level, though many economists expect them to rise.

The Paris-based organisation slashed its outlook for the second time this year, forecasting global growth to slow to 2.9% from 3.3% in 2024, suggesting the world is heading for its weakest growth since the global pandemic. 
“Weakened economic prospects will be felt around the world, with almost no exception,” the OECD chief economist said.

Other recent data paints a similar picture. A gauge of Chinese factory activity fell to its lowest level since Sept 2022, while manufacturing indexes in South Korea, Taiwan, Vietnam and US also declined.

7.Growing Nationalist sentiments in Europe with anti-immigration sentiments rising

 The election of the right-wing Karol Nawrocki has left Prime Minister Donald Tusk’s liberal domestic agenda largely in tatters — the new president can veto or delay legislation — and upended his plans to strengthen ties with the European Union. The country now faces years of gridlock, with its foreign policy likely to be caught between a pro-EU direction and an anti-alliance, isolationist turn.

Meanwhile,In the Netherlands, nationalist leader Geert Wilders pulled his party out of the country’s ruling coalition after ministers failed to agree on tougher asylum measures, leading to general election. Also, a German court ruled that Berlin’s effort to turn asylum seekers away at the border was unlawful, a blow to government efforts to fend off a challenge from the far right.

8.Artificial intelligence is driving more rapid technological and societal change than any previous tech revolution, a leading venture capitalist said. 

Mary Meeker, nicknamed the “Queen of the Internet,” said in her highly regarded presentation on technology trends that that the pace and scope of change driven by AI was “unprecedented”.

The adoption of AI far outpaces that of earlier technologies, with ChatGPT gaining 800 million users in 17 months and companies entering the market at never-before-seen rates.

However, financial returns brought by AI still lag previous shifts, as firms race to build infrastructure to support their models. “If adoption of AI feels different, it actually is, “said TechCrunch.

9.Musk Taps Investors for Billions Days After Washington Exit

Elon Musk is selling $5 billion in debt for his artificial intelligence startup, xAI Corp., the latest in a series of fundraising efforts across his business empire as the billionaire pivots away from politics and returns to running his various companies.

Morgan Stanley is shopping the debt for xAI with a double-digit interest rate, according to people familiar with early pricing discussions. The financing could help Musk continue to spend aggressively on AI infrastructure as he builds out a massive data center in Memphis.

Musk appears eager to refocus on his array of businesses after announcing last week that he would be stepping back from politics. He had spent months as a senior adviser and regular companion to President Donald Trump, for whom he campaigned in the 2024 election and was a top financial supporter.

Elon Musk’s artificial intelligence startup xAI is allowing employees to sell $300 million worth of shares to investors, in a deal that values the company at $113 billion. That’s the same price for the company Musk announced in March, when xAI bought his social media service X.

10.Neuralink competitor Paradromics completes first human implant

Neurotech startup Paradromics on Monday announced it has implanted its brain-computer interface in a human for the first time. 

The procedure took place May 14 at the University of Michigan with a patient who was already undergoing neurosurgery to treat epilepsy. The company’s technology was implanted and removed from the patient’s brain in about 20 minutes during that surgery.

Paradromics said the procedure demonstrated that its system can be safely implanted and record neural activity. It’s a major milestone for the nearly 10-year-old startup, as it marks the beginning of its next chapter as a clinical-stage company. 

Once regulators give it the green light, Paradromics plans to kick off a clinical trial later this year that will study the long-term safety and use of its technology in humans.

 Meanwhile, Musk’s promoted Neuralink raises $650M, investment round includes Founders Fund and Sequoia Capital.