Arvind's Newsletter

1.India Sept business growth at nine-month low as demand eases, PMI shows

India’s business activity hit a nine-month low in September, dropping to 59.3 from 60.7 in August, according to HSBC's flash India Composite Purchasing Managers' Index (PMI) by S&P Global. 

Slower growth was driven by softer demand and rising costs, though services sector jobs surged at their fastest pace in two years. Both manufacturing and services saw a similar slowdown, with firms reluctant to pass on higher costs to customers due to muted demand. Despite this, overall activity remained strong, extending the expansion streak past three years.

However,Moody’s upwardly revises India’s CY24 growth forecast to 7.1%, expects Asia-Pacific to grow faster than rest of world

2.Swiggy gets Sebi go-ahead for $1.25 bn proposed IPO launch

Food and grocery delivery platform Swiggy has received approval from the Securities and Exchange Board of India (Sebi) for its proposed $1.25 billion public issue, according to sources. The Bengaluru-based company had filed draft papers for the IPO with the market regulator through the confidential filing route in April this year.

3.JPMorgan says global firms keen to grow in India via M&A, IPOs

Global companies and financial sponsors are actively pursuing mergers, acquisitions, and IPOs in India to leverage the country's economic growth. Financial services, including insurance and banking, are attracting significant interest. India has seen a rise in dealmaking activity with nearly $9 billion raised via IPOs this year and $77 billion in deals involving Indian companies.

Incremental government capex in infrastructure seeks to encourage offshore investors, according to James Sullivan, head of APAC Equity Research, JPMorgan. Investments have to be targeted towards particular sectors, taking cues from government policies, he said. Sullivan estimated that offshore investors need to inject approximately $100 billion to achieve a neutral stance. So far this year, only $10 billion have flowed into the market, leaving considerable room for expansion and significant potential for growth.

4.Delhi’s IGI Airport will get India’s first air train by 2027: All you need to know

Delhi's Indira Gandhi International Airport plans to introduce India's first air train system. This system aims to provide smooth connectivity between the airport terminals, parking lots, and other facilities, reduce travel time across the airport, and ensure convenience for passengers.

This proposed air train, also known as Automated People Mover, will connect Terminals 1, 2, 3, Aerocity, and Cargo City at the Indira Gandhi International Airport. It will have four stations and cover a distance of around 7.7 km. The new project will replace the DTC bus used to travel across the airport.

Delhi International Airport Ltd (DIAL) has issued a tender to construct an air train across the terminals, according to a report by the Times of India. The total cost of the project is not specified; however, according to the news report, it is estimated to cost around ₹2,000 crore.The air train system is expected to become operational by the end of 2027.

5.ISRAEL WAR ESCALATES AFTER DEADLY BARRAGE IN LEBANON

Nearly 500 people, including 35 children and 58 women, were killed in southern and eastern Lebanon after Israel launched hundredS of airstrikes yesterday on the area's deadliest day of attacks since Israel's war with Hezbollah militants in 2006. At least 1,645 people were also wounded yesterday, according to Lebanon's health ministry. The casualty count does not distinguish between civilians and militants.

Israel said it struck roughly 1,300 Iran-backed Hezbollah targets in Lebanon, which shares borders with Israel to the south and Syria to the northeast. Civilians have also been ordered to evacuate from areas near the conflict. At least 60,000 people have been displaced from Israel's side of the border, while roughly 100,000 have been displaced from Lebanon. 

Hezbollah has responded with more rockets, at times firing deeper into Israel than usual. Expecting such counterattacks, Israeli officials have restricted gatherings in their country’s north. Schools and businesses in the area remained closed yesterday.

The cycle is familiar. Israel and Hezbollah each claim that its attacks are meant to get the other to back down from a war. Instead, the strikes lead to further escalation.

6.Israel’s Pager Attacks Have Changed the World

The world continues to be rattled by how Israel managed to trigger pagers carried by Hezbollah operatives to explode. There were high casualties. Bruce Schneier is a globally acknowledged security expert and he writes in The New York Times that the second order outcomes that now follow will be tough to contain.

“We can’t imagine Washington passing a law requiring iPhones to be made entirely in the United States. Labour costs are too high, and our country doesn’t have the domestic capacity to make these things. Our supply chains are deeply, inexorably international, and changing that would require bringing global economies back to the 1980s.

So what happens now? As for Hezbollah, its leaders and operatives will no longer be able to trust equipment connected to a network — very likely one of the primary goals of the attacks. And the world will have to wait to see if there are any long-term effects of this attack, or how the group will respond.

But now that the line has been crossed, other countries will almost certainly start to consider this sort of tactic as within bounds. It could be deployed against a military during a war, or against civilians in the run-up to a war. And developed countries like the United States will be especially vulnerable, simply because of the sheer number of vulnerable devices we have.”

With thanks to Founding Fuel to pointing this article out.

7.US to ban Chinese software in cars

The Biden administration plans to bar Chinese software and hardware from being used in internet-connected cars over national security concerns, essentially banning all China-made smart vehicles in the US. Washington is concerned about Chinese companies collecting data on US drivers and manipulating vehicles’ navigation systems, Reuters reported. The US’ ongoing efforts to crack down on the use of Chinese technology has “begun to drop a digital curtain” between the two superpowers, The New York Times wrote. Some China experts believe the US’ fear of Beijing ends up hurting American consumers, but one analyst told the Times that the proposed ban “reflects complexities of a world where a lot of connected devices can be weaponised.”

8.Is Harvard Business School too woke? The Economist

It has been an inhospitable winter in Boston. Following the resignation of Claudine Gay as president of Harvard University on January 2nd, her interim replacement said he could not recall “a period of comparable tension” at the institution. Ms Gay was ousted after a plagiarism scandal erupted over her academic work. But her position had been precarious for months; some donors were upset that she seemed to tolerate students’ antisemitic outbursts. For conservatives, Ms Gay, who was Harvard’s first black and second female president, was also a symbol of liberal elites’ fixation on diversity, equity and inclusion (DEI).

The ostensibly hard-headed sorts who attend Harvard’s management school, and that school’s ties to harder-headed corporate America, might be expected to insulate it from wider campus convulsions. Not quite. Businesses too are facing a DEI reckoning. As a consequence, Harvard Business School (HBS) is facing pressure on two fronts.

Students at HBS are the holders of the winning tickets in the lottery of American capitalism. On average, they arrive with five years of work experience, nearly half of them from prestigious consulting or financial firms. Two years of study for the 115-year-old institution’s MBA degree all but guarantee a comfortable professional perch. Some do much better still. The fortunes of HBS alumni have helped build the school’s reputation and, thanks to their generous donations, stock its coffers (combined with annual income from MBA tuition fees, executive education, a publishing business and online courses, in 2022 the school made $966m in revenue).

After the murder of George Floyd, a black man, by a police officer in May 2020 HBS underwent a self-examination typical of other American institutions at the time. “What we could agree on is that the experience of black students at the school, as they reported upon graduation, was not quite the same as white students’. There was a deficit,” says Robert Kaplan, a faculty member involved in the review. HBS’s approach to DEI has since resembled that of corporate America—and of the rest of Harvard. In 2021 it hired a chief diversity-and-inclusion officer and tried to increase the diversity of the student body and faculty.

Bringing DEI into the business-school classroom has been more controversial. Compared with the rest of the university, HBS faculty are probably less woke. The pressure for more DEI came mostly from students, recounts a professor. And if the aim of management education is even partly to simulate the challenges faced by grown-up executives, it is hard to imagine a curriculum ignoring such issues entirely. America’s demography is changing, and so are employees’ expectations about what their workplace ought to look like. The current backlash against DEI policies requires bosses to be far more thoughtful about how they approach them. It is requiring the same of business schools. That is easier said than done.

MBA students at HBS are taught using the “case method”. Classes ask students to put themselves in the shoes of bosses facing a specific problem. Since 2020 students have complained that those shoes do not fit. The result has been a significant increase in the ethnic and gender diversity of the case “protagonists”. But, as one faculty member notes, “the idea that you would be studying a chief financial officer doing a discounted-cashflow model, substitute a white man for a black woman, and then high-five all around is ridiculous.”

HBS made a course called “inclusion” compulsory for first-year MBA students in the academic year of 2021-22. A version of it, which focused heavily on race and gender, had previously been optional; “We heard from the students that you’re teaching the course to the people that don’t need it,” says a faculty member with knowledge of the course. But many students and staff felt the new course lacked rigour and, partly because it was taught to a single group of 1,000 people, discouraged discussion.

Echoing worries about free speech on other campuses, professors whisper that conservative and religious students feel less able to speak up more generally. The view is supported by the results of a student survey shown to faculty last year. Shortly after the attacks on Israel on October 7th and the invasion of Gaza, Bill Ackman’s comments about the war and Harvard’s campus politics caused some HBS students to lobby the school to disinvite the billionaire investor (and HBS graduate) from appearing on campus as a “protagonist” in a case about his hedge fund.

As in boardrooms, HBS’s thinking on DEI is in flux. The inclusion course was first redesigned, to less damning reviews, then shelved. In June 2023 Francesca Gino, one of its architects, was put on unpaid administrative leave after accusations of fraud in her work (she has filed a lawsuit against Harvard University alleging breach of contract and gender-based discrimination). In the end, Mr Ackman did visit. Like America Inc, HBS is learning to walk the DEI tightrope—the hard way.