Arvind's Newsletter

1.India’s manufacturing sector is gaining global traction, says S&P Global

India’s manufacturing sector is emerging as an increasingly attractive destination for global investors, with the country making notable progress in enhancing its competitiveness and making its manufacturing sector more attractive to global investors, S&P Global said on Monday.

‘It also highlighted in its latest research report, titled India Forward: Transformative Perspectives’, that India is ramping up its push for alternative energy to build a cleaner, self-reliant transport future in which biofuels will play a central role. This push offers a triple win for the country through strengthening energy security, lowering greenhouse gas emissions, and enhancing rural incomes, the report said.

India is well-positioned to capitalise on shifting global trade dynamics and cooperation trends, with its economy set to become the world’s third-largest by FY31, S&P Global added.

2.MSMEs make up 80% of 70 bids for Government’s electronic component manufacturing scheme: Business Standard

The Indian government's Rs 22,805 crore Electronics Component Manufacturing Scheme has garnered significant interest, with 70 applications received within just 15 days of its launch.

Though big players like Tata Electronics, Dixon Technologies, and Foxconn have applied for the scheme, Union Minister Ashwini Vaishnaw said that 80% of the applications came from small and medium enterprises (SMEs).

This scheme aims to reduce India’s dependence on China and the country’s serious demand-supply gap in electronic components, which some studies project will reach a $248 billion deficit by 2030.

3.India's orthopaedic and cardiac implant sector to touch $4.5-5 bn by FY28: Economic Times

India's orthopaedic and cardiac implant sector is expected to reach USD 4.5-5 billion by 2027-28, mainly driven by strong domestic demand and gradually growing exports, a report said on Monday. Currently, the orthopaedic and cardiac implant sector, including exports, stood at USD 2.4-2.7 billion in FY24, according to a report by CareEdge Ratings.

The segment is dominated by the presence of foreign multinational companies, which largely import the implants and sell them in India as the implant business requires strong technological capabilities, a proven track record of safety and efficacy, a broad marketing and distribution network, and a robust post-sales support system.

However, India is gradually reducing its dependence on imports as sales of homegrown implant manufacturers have grown at a compound annual growth rate (CAGR) of 28 per cent (including a CAGR of 37 per cent for exports) during the four years ended FY24, outpacing the sales CAGR of 12 per cent for foreign multinational corporations (MNCs) during the same period.

4.Semicon 2.0: India eyes 5% slice of global semiconductor chip pie by 2030: Business Standard

The central government is aiming for a 5 per cent share of global semiconductor chip production by the end of 2030 as it readies for the next phase of the India Semiconductor Mission — Semicon 2.0. It has already committed disbursements from the $10 billion it earlier announced as incentives for prospective semiconductor fabrication (fab) players, as well as Outsourced Semiconductor Assembly and Test (OSAT) and Assembly, Testing, Marking, and Packaging (ATMP) companies. As many as five projects are already eligible under the scheme. 

A senior official in the Ministry of Electronics and Information Technology (Meity) said: “We have just begun and have a long road ahead. We are aiming to achieve a 5 per cent share of global chip production capacity. A lot has to be done.”

5.US borrowing costs climb after Moody’s downgrade; Bloomberg

The US lost its last perfect credit rating, with Moody’s downgrading US debt one notch, from an Aaa rating to Aa1. The decision—over the rising US deficit, increased interest payment ratios, and sluggish growth—ends the country’s perfect Moody’s credit rating, in place since 1917.

The Moody’s downgrade of the US is a powerful symbol of the ongoing deterioration of the nation’s finances, and the market reaction is a reminder that the bond vigilantes have US in their crosshair.

Bond investors are selling longer-dated bonds, pushing the yield on the 30-year above 5% to the highest since November 2023. The impact spilled over to other asset classes too, sending US equity-index futures lower and a gauge of the dollar sliding 0.5%, a reminder of the “Sell America” trade that exploded last month.

6.Nuclear revival in Europe: Berlin dropped its opposition to nuclear power, part of a rapprochement with Paris that also marked a potentially major change in European Union energy policy: Financial Times

France is strongly pro-nuclear, while Germany began phasing it out after the 2011 Fukushima incident. But new Chancellor Friedrich Merz has been critical of that decision, and is keen to build bridges with France. He agreed to remove all “biases” against nuclear EU legislation, leaving it on a par with renewable energy.

Europe in general has seen a nuclear revival: A dozen EU members signed a letter backing the technology, the Netherlands and Belgium reversed decisions to shut down reactors, and Denmark may lift a 40 year nuclear moratorium.

7.UK-EU post-Brexit reset: the key points: Financial Times

The European Union and UK reached a preliminary deal to reset their post-Brexit relations ahead of a summit of the two sides’ leaders in London.

Britain will ease access to its waters for EU fishing vessels, and Brussels plans to lower barriers for British firms to sell into the bloc, though hopes for simplified migration rules were apparently dashed.

The agreement — alongside the widely expected signing of a security and defense partnership — comes with Britain’s prime minister set to host top EU officials for their first such meeting since 2020, part of efforts to “emphasise a spirit of reconciliation,” the Financial Times said, following years of rancour sparked by Britain’s decision to withdraw from the EU.

8.China Gave Pakistan Satellite Help, India Defense Group Says: Bloomberg (gift article)

China provided Pakistan with air defense and satellite support during its clash with India this month, according to a research group under India’s Ministry of Defence, suggesting that Beijing was more directly involved in the conflict than previously disclosed.

China helped Pakistan reorganise its radar and air defense systems to more effectively detect India’s deployments of troops and weaponry, Ashok Kumar, director general at the New Delhi-based Centre For Joint Warfare Studies, said in an interview. 

China also helped Pakistan adjust its satellite coverage over India during the 15-day interval between an April 22 attack that killed 26 people, mostly tourists, and the start of hostilities between the two nations, he said.

9.The US Food and Drug Administration approved the first blood test to help diagnose Alzheimer’s disease, a move that could make it easier to detect the condition early in some people:STAT

The test, developed by a Japanese biotech company, looks for proteins in the blood that can indicate the presence of amyloid plaques in the brain — a key hallmark of Alzheimer’s. The blood test can’t definitively diagnose the disease, for which there is also no cure. Rather, experts said the test can help screen adults aged 55 and older who are at risk of Alzheimer’s, which could speed their path to diagnosis and treatment before the onset of symptoms, including severe memory loss.

10. Apple’s struggles with AI: Bloomberg

Back in 2018 it looked like Apple Inc.’s artificial intelligence efforts were finally getting on track. Early that year, Craig Federighi, Apple’s software chief, gathered his senior staff and announced a blockbuster hire: The company had just poached John Giannandrea from Google to be its head of AI. JG, as he’s known in the industry, had been running Google’s search and AI groups. Under his leadership, teams were deploying cutting-edge AI technology in Photos, Translate and Gmail—work that, along with the 2014 acquisition of the pioneering British company DeepMind, had given Google a reputation as a leader in AI.

To Apple’s leadership, the Giannandrea hire wasn’t just a coup at the expense of their fiercest rival. It was also, they hoped, the start of the company’s transformation into an AI powerhouse. Just before the death of co-founder Steve Jobs in 2011, Apple had unveiled its voice assistant, Siri. At first, Siri felt like something out of science fiction—once again, Apple had taken a futuristic computing concept and turned it into a mainstream product. But within a few years, Google, Amazon.com Inc. and other competitors had introduced voice assistants that felt far more advanced, while Apple’s struggled with basic comprehension and commands.

Seven years after Giannandrea arrived, the optimism he brought with him is gone. Apple’s AI has only fallen further behind. Since OpenAI’s ChatGPT software burst into public consciousness in 2022, every major tech company has accelerated its efforts to develop the large language models (LLMs) that power such programs, incorporate them into voice assistants and other tools, and hype them to consumers.

Apple, like its competitors, has rolled out new AI features, but they’ve mostly been notable for being delayed and underwhelming.

The prospect of truly AI-powered devices led Apple’s share price to rise sharply. The buzz grew in September, when the company announced that its newest phone, the iPhone 16, had been “built from the ground up” for Apple Intelligence. But when the device went on sale that month, it didn’t have the AI features—the first of them, including the writing tools and summaries, didn’t come out for another month and a half.

As for the Siri upgrade, Apple was targeting April 2025, according to people working on the technology. But when Federighi started running a beta of the iOS version, 18.4, on his own phone weeks before the operating system’s planned release, he was shocked to find that many of the features Apple had been touting—including pulling up a driver’s license number with a voice search—didn’t actually work, according to multiple executives with knowledge of the matter.

The new Siri won’t be out in time for next month’s WWDC, a year after the upgrade was first announced. Instead of getting an overhauled assistant—let alone a full-fledged ChatGPT competitor, as many rivals have released—users will have to be satisfied with promises of further Apple Intelligence deployment.

Being late to a potentially world-changing advance isn’t necessarily catastrophic for Apple. The company is often content to wait for competitors to pioneer new tech, with all the risks that entails, before releasing its own well-designed, highly accessible version to its billion-plus customers. It’s done this with MP3 players, smartphones, tablets, watches and earbuds.

What’s notable about artificial intelligence is that Apple has devoted considerable resources to the technology and has little to show for it.

Inside Apple, Giannandrea has absorbed much of the blame for the delays and false starts, according to several employees and people close to the company. They say he’s found it difficult to fit in with the members of Apple’s innermost circle, who’ve worked together for decades and run the company like a family business.

Others say Giannandrea isn’t hands-on enough and doesn’t drive his workers particularly hard. “Every other team at Apple, at least in engineering, is balls-to-the-wall, get it out, get it out on time, and JG’s team just doesn’t operate that way,” one executive says. “They just don’t execute.”

Failure, of course, is an orphan, and it’s simplistic to see the missteps as one person’s fault.

Apple’s long-standing commitment to user privacy also hindered it. The company’s base of 2.35 billion active devices gives it access to more data—web searches, personal interests, communications and more—than many of its competitors. But Apple is much stricter than Google, Meta and OpenAI about allowing its AI researchers access to customer data. Its commitment to privacy also extends to the personal data of noncustomers: Applebot, the web crawler that scrapes data for Siri, Spotlight and other Apple search features, allows websites to easily opt out of letting their data be used to improve Apple Intelligence.

All this has left Apple’s researchers more heavily reliant on datasets it licenses from third parties and on so-called synthetic data—artificial data created expressly to train AI.

It’s another example of how AI is proving to be a technology that doesn’t play to Apple’s strengths.

This spring, Giannandrea was stripped of all control over product development, including the programs for Siri engineering and future robotics devices. That came after Cook lost faith in his ability to execute the creation of new products, according to fellow executives. Siri is now headed by Mike Rockwell, who led the team that created the Vision Pro mixed-reality headset.Rockwell reports to Federighi, who’s taken on more responsibility for Apple’s AI software-related product road map.

Meanwhile, Apple, like other tech giants, is noting the ways user habits are changing. Google searches on Apple devices fell last month. “That has never happened in 22 years,” Cue said in his court testimony, citing AI as the reason. To that end, he said, the company is looking at deals with the likes of OpenAI and Anthropic as possible search replacements in the Safari web browser—an acknowledgment that users are increasingly using LLM-based assistants to find information. Google Gemini, the service Giannandrea wanted to add to Siri last year, is on track to be added in iOS 19 as a ChatGPT alternative, according to people with knowledge of the plan.

As for Apple’s homegrown chatbot efforts, some executives are now pushing, despite Giannandrea’s prior reluctance, to turn Siri into a true ChatGPT competitor. To that end, the company has started discussing the idea of giving the assistant the ability to tap into the open web to grab and synthesize data from multiple sources.

An Apple chatbot, integrated into Siri, would help hedge against the potential loss of the $20 billion a year that Alphabet pays for Google to be the default search engine in Safari—a deal US antitrust regulators have been targeting. Apple’s leadership is also optimistic about another of its delayed AI features, one that would allow Siri to integrate with iPhone apps, letting users more deeply control their devices with their voice. This would help the lucrative App Store—also a $20 billion annual business—continue to coexist with chatbots, which might otherwise supplant apps entirely.

The Apple sources say the company, despite its hopes for LLM Siri, is also preparing to separate the Apple Intelligence brand from Siri in its marketing. It’s a tacit admission that the voice assistant’s poor reputation isn’t helping the company’s AI messaging. Another change: Apple, for the most part, will stop announcing features more than a few months before their official launch.