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- Arvind's Newsletter
1.Why 30% localisation an uphill task for Apple under PLI scheme in India, opines Business Standard
India has hit a domestic value addition (DVA) of an average 20 per cent in mobile phones under the production-linked incentive (PLI) scheme,
the government announced for the first time on Tuesday. Its aim, based on commitments made, is to hit 35-40% by the financial year ending March 31, 2026 (FY26), which is the last year of the PLI scheme, or double this number.
A striking feature of the figure is that Apple, which began operations in India only 22 months ago, accounted for 50 per cent of India’s $11-billion smartphone exports. Under the PLI scheme, its vendors need to reach 29-30% DVA – up from the current 15%, though it varies from model to model — and that might not be easy to achieve, say experts.
Apple’s vendors have localised chargers, batteries, printed circuit board assembly (or PCBAs), enclosures, and coils, to name a few. According to BofA Research estimates (which are endorsed by vendors), around 70 per cent of an iPhone’s cost comes from the memory, processor, display and camera module, and these have to be imported, so localising even further may take longer than the PLI deadline.
2.Peak Oil ?
Rising demand for crude oil is set to slow to a trickle within five years and peak before the end of the decade, as electric-vehicle uptake surges and developed nations rapidly transition to cleaner sources of energy, according to The International Energy Agency (IEA),a prominent energy forecaster, reported the Wall Street Journal.
IEA, a group funded by some of the world’s largest oil consumers, expects demand for transport fuels derived from oil such as gasoline will be the first to peak before starting a steady decline—hastened by a sharp uptake in EVs and a long-lasting shift to remote working spurred on by the Covid-19 pandemic.
Rapidly growing Asian economies will continue to prop up the global appetite for oil in the coming years, and demand for jet fuel, naphtha and other oil products with industrial uses will continue to tick higher, the IEA said. But even in China, which has long been the powerhouse of global oil demand, the appetite for crude will slow markedly before the end of the decade.
India will surpass China as the main driver of oil growth as soon as 2027, the IEA said.
“The shift to a clean-energy economy is picking up pace, with a peak in global oil demand in sight before the end of this decade," said Fatih Birol, the IEA’s executive director.
Other agencies have different outlooks for long-term oil demand, as per OilPrice.com. Earlier in the year, energy expert Energy Intelligence Group predicted that not only will oil demand grow in 2023 but it will continue doing so till the end of the decade
No less than 10 organisations, including OPEC, Exxon Mobil (NYSE: XOM), and the Energy Information Administration (EIA), have predicted that global oil demand will continue growing through 2050 and not shrink as most analysts have forecast. The most bullish among these is the U.S.-based EIA which has projected global oil demand to increase by 34% to hit 126 million barrels per day in 2050. Lets see who is right.
3.Readers of this newsletter must know we have been tracking developments relating to the wonder obesity drug semaglutide. There have been two recent articles which refer to the “side effects” or the “price to be paid “ for taking the drug.
In interviews with Wired, scientists who pioneered research into glucagon-like peptide 1 (GLP-1), the hormone mimicked by semaglutide —
sold as Ozempic, Wegovy, and Rybelsus — reflected on the explosive attention on the drug this year. It's a must-read overall, but particularly interesting was the perspective of Jens Juul Holst, a Danish biomedical researcher who worked on the initial delivery method of GLP-1 imitators, who told the magazine that the drug's effects can be more profound than potential patients might realise.
"What happens is that you lose your appetite and also the pleasure of eating, and so I think there’s a price to be paid when you do that,"said Holst, who teaches at the University of Copenhagen. "If you like food, then that pleasure of eating, and so I think there’s a price to be paid when you do that," said Holst, who teaches at the University of Copenhagen. "If you like food, then that pleasure is gone. The craving for food for some people is taken away when they take GLP-1 drugs." For some people, he pointed out, that's going to be a very big deal — potentially cutting out one of the greatest pleasures in life.
The article in the New York Times, reports the New Obesity Drugs Come With a Side Effect of Shaming. Wegovy and other drugs expose a social tension between a quest to medicate illness and a stigmatizing belief that obese people lack sufficient willpower to lose weight.
4.In 2023, up to 6,500 high-net-worth individuals (HNIs) are expected to leave India. This number is 13% less than that of 2022 when 7,500 HNIs left the country, according to the Henley Private Wealth Migration report released yesterday (June 13). Neighbouring China is expected to witness an exodus of at least 13,500 HNIs in 2023. The report, which tracks wealth and investment migration trends worldwide, identified an individual with an investible wealth of $1 million as an HNI.
It blamed India’s tax laws, coupled with convoluted and complex rules on
outbound remittances that are “open to misinterpretation and abuse,” for causing the exodus.
Australia remains the preferred destination among HNIs globally. However, India’s wealthy mostly choose Dubai and Singapore.
Who runs the world? Political scientist Ian Bremmer in his latest TedTalk argues it's not as simple as it used to be. With some eye-opening questions about the nature of leadership, he asks us to consider the impact of the evolving global order and our choices as participants in the future of democracy.
He noted that how big tech companies behave will determine whether the global digital order splits apart into rival camps between the West and China, or becomes one in which businesses compete with— or even dominate — countries. Read the transcript below or listen to TedTalk.
