Arvind's Newsletter

1.IndiGo to kick off business class on busiest routes in 2024

IndiGo announced on Thursday, May 23, that it will introduce business class seating in its flights this year to provide more options to flyers amid rising travel demands in India. The low-cost budget carrier is set to unveil a "tailor-made business product" in August 2024, coinciding with its 18th anniversary.

The announcement comes as IndiGo airline operator Interglobe Aviation reported that its net profit more than doubled to ₹1,894.8 crore in the quarter ended March 2024. India's largest airline recently decided to purchase 30 wide-body aircraft.

2.Rising overseas travel in overseas expenses by Indians, reported the Core

$31.7 bn is the total amount spent by Indians on overseas expenses under the Liberalised Remittance Scheme (LRS) in FY 2024, thereby witnessing a nearly 17% increase, compared to US $27.1 billion in FY23. There is a substantial rise in spending on overseas travel despite the imposition of tax collection at source (TCS) in October 2023. Travel expenses hit $17 billion in FY24 — over 24.5% higher than the $13.6 billion spent the previous year. Spending on education, however, decreased in absolute terms to US $3.4 billion in FY23 and remained steady at approximately US $3.5 billion in FY24. While it was US $5.2 billion in FY22, dropping its share of overall spending to 12%. 

3.Google to tie-up with Foxconn to set up plant in Tamil Nadu to manufacture Pixel phones

Google plans to invest billions of dollars in India’s Tamil Nadu state to set up smartphone production, picking the southern industrial province for its manufacturing push in the country.

The Alphabet Inc. unit plans to assemble Pixel phones in the state, setting up new production lines with Taiwanese contract manufacturing partner Foxconn Technology Group, people familiar with the matter said. Its Wing subsidiary will also assemble drones in Tamil Nadu, said the people, who asked not to be identified as the information is private.

Google is accelerating its plans to manufacture devices in India, following companies such as Apple Inc. in pivoting away from China to lessen geopolitical risks. The company’s decision benefits Tamil Nadu, which is seeking to get into advanced manufacturing and move away from the historical tag line “Detroit of India.”

4.Zudio, Tata's Retail Sensation, Is Now Bigger Than Westside

Fast fashion is back in vogue, thanks to Trent Ltd.'s affordable chic clothing chain, Zudio. It has not only taken the country's fashion industry by storm but has also catapulted itself from being an underdog to an unstoppable force within Tata's retail empire. While many doubted whether Zudio could be a trendsetter or just a passing fad, it has proven all critics wrong.

The eight-year-old brand has nearly doubled its revenue over the previous year to Rs 6,744 crore as of March, according to Kotak Institutional Equities estimates. While Trent discloses only combined financials for its fashion concepts, the brokerage projects Zudio's revenue to have surpassed that of Westside in the fiscal gone by, aided by aggressive store expansion, higher inventory turns, and an improvement in sales per square foot.

Simply put, Zudio sold 90 T-shirts and 20 pairs of denim jeans every minute in fiscal 2024. The brand also saw 19 fragrances and 17 lipsticks flying off the shelves every single minute, according to Trent's annual report.

Zudio —with few peers of similar scale—has achieved a compound annual growth rate of 89% in revenue between FY18 and FY23. During the same period, it outperformed Trent's own CAGR of 31% and consistently defied the general slowdown in discretionary consumption.

5.Despite the much touted relative safety — the odds of dying in an air crash is about one in 11 million — is air travel is getting riskier ? 

There's a reason that the Singapore Airlines flight that hit massive turbulence is making news. Passengers don't often die because of a turbulent flight (as one did in this case) or get seriously injured (several travelers are still in the ICU). And turbulence, while often stressful, doesn't often include a plane losing 6,000 feet of altitude. So, yes, Singapore Air's flight SQ321 was unusual in many unfortunate ways.

But extreme turbulence—which "can be invisible both to the eye and weather radar"—is becoming less and less unusual. "Recent research indicates that turbulence is rising and that this change is sparked by climate change, specifically elevated carbon dioxide emissions affecting air currents. Paul Williams, a professor of atmospheric science at the University of Reading in England, has studied turbulence for more than a decade. Dr. Williams's research has found that clear air turbulence, which occurs most frequently at high altitudes and in winter, could triple by the end of the century. He said that this type of turbulence, of all categories, is increasing around the world at all flight altitudes.

This newsletter strongly advises to fasten your seatbelts throughout your flight for your own safety and read the article from NYT below on what you need to know about turbulence

6.Like to bike? Your knees will thank you and you may live longer, too

A new study finds people who are in the habit of riding a bike are significantly less likely to have osteoarthritis and experience pain in their knees by age 65, compared to people who don't bike.

The study, which was funded in part by the National Institutes of Health, and published in the American College of Sports Medicine's flagship peer-reviewed journal, included about 2,600 men and women, with an average age of 64 years old. They were surveyed about their physical activity over their lifetime.

 As part of the study, researchers took X-ray images to evaluate signs of arthritis in their knee joints."Bicyclers were 21% less likely to have X-ray evidence and symptoms of osteoarthritis compared to those who did not have a history of bicycling."

7.Global firms are tapping India’s workers like never before

Lululemon, a Canadian maker of yoga outfits, does not have many things in common with Rolls-Royce, a British engine manufacturer. One thing they do share, along with scores of other foreign companies, is space in the sprawling Embassy Manyata Business Park in Bangalore. Hundreds of others, among them Maersk, a Danish shipping firm, Samsung, a South Korean electronics giant, and Wells Fargo, an American bank, have offices within a few miles. Many more of these white-collar outposts can be found in cities including Chennai, Pune and Hyderabad.

Back in the 1990s global firms such as General Electric, a once-mighty conglomerate, began to rely on Indian workers to perform tedious tasks such as filling in forms and patching software for mainframe computers. Over time much of that drudgery was absorbed by Indian outsourcers such as Infosys, tcs and Wipro. Now foreign firms have begun to think bigger about the types of white-collar jobs that can be done by India’s cheap but well-educated workers. Many have set up “global capability centres” (GCCS) to offshore tasks from data analysis to research and development (R&D), helping fuel a new wave of services-led growth for India.

It has long been easier to offshore white-collar work to India than the blue-collar variety. Spreadsheets and emails do not need to travel along the country’s congested roads or otherwise rely on its shoddy infrastructure. (GCCS generally have dependable internet connections, a luxury not always enjoyed in India.) Labour laws covering matters such as redundancies and—crucially for global firms—working hours are less restrictive for the country’s white-collar workers, too.

More recently, technologies such as cloud computing and video conferencing have made it less cumbersome to tap India’s vast pool of brainy workers. Having learned how to supervise employees remotely through the covid-19 pandemic, plenty of bosses will have now pondered whether some roles could be done from farther afield.

All that helps explain why the number of GCCS operating in India has ballooned from 700 in 2010 to 1,580 last year, according to NASSCOM, an industry body (see chart). A new centre now opens roughly every week, two-fifths of them in and around Bangalore. India’s GCCS generated a combined $46bn in revenues last year, estimates NASSCOM.

Even that may vastly understate their activity. Many multinational companies do not share the financial details of their GCCS, which means calculating their economic contribution involves a good deal of guesswork. Wizmatic, a consultancy based in Pune, thinks the revenues of Indian GCCS could be as high as $120bn, a sum equal to roughly 3.5% of the country’s GDP.

These outposts employ some 3.2m workers, reckons Wizmatic. Many Indian graduates jump at the opportunity to work at one. Students hired by the country’s outsourcing giants typically earn less than $10,000 a year. Moving to a GCC can triple that. Most foreign firms setting up these offices also plump for premium buildings with cafés and other amenities. Lululemon provides its Indian workers with a space, and time, for exercise, an uncommon perk in Indian workplaces.

The activities of gccs are increasingly varied. Lululemon’s workers in India pore over sales data and tell branches in Dubai to stock more bright yellows, pinks and greens, and ones in New York to stock more blacks and greys. Although design is done in Canada, the company’s GCC is involved in everything from setting prices to managing supply chains. Wells Fargo’s teams in Bangalore, Chennai and Hyderabad support the bank’s operations in areas ranging from lending to managing investment portfolios.

More than 85 foreign semiconductor companies, including Intel and Nvidia, now conduct design work in Bangalore. Tech giants such as Alphabet, Amazon and Microsoft also have R&D centres in the city, as do Boeing, an aircraft manufacturer, and Walmart, a retail giant. Mercedes-Benz, a German carmaker, employs nearly 6,000 workers at its R&D centre in Bangalore, its largest such operation outside Germany. Over the past four years its team in India has produced 32 patents.

In 2010 American multinationals spent $1.7bn on R&D activities in India, according to America’s Bureau of Economic Analysis. By 2021, the latest year available, that figure had surged to $5.5 bn. Growing geopolitical tension with the West means that China, India’s principal rival hub for low-cost R&D, has lost some of its appeal. On May 16th it was reported that Microsoft had asked hundreds of employees working on advanced technologies such as machine learning and cloud computing in the country to relocate.

All this has helped turbocharge India’s services exports, which hit $338bn last year, or nearly 10% of GDP, up from $53bn in 2005, reckons Goldman Sachs, a bank. The country now accounts for 4.6% of global services exports, up from roughly 2% in 2005. India’s goods exports, by contrast, account for just 1.8% of the global total, up from 1% in 2005.

India’s government has been busily trying to tilt that balance towards manufacturing, by modernising the country’s infrastructure and doling out subsidies to foreign firms that produce there. Plenty of other countries are vying to steal China’s title as the world’s factory. None, however, has as good a shot as India at becoming the world’s office.

8.The new (async) office

Despite resistance from top bosses, the typical nine to five is quickly becoming ancient history. At many tech companies, there are no set hours; workers clock in and out whenever it suits them. Which means managers can't randomly call meetings anymore, and employees are expected to leave memos, noting their activity and decisions in detail for others to view.

The demise of needless meetings could also sound the death knell for the rank of managers. Per an estimate, asynchronous companies have half as many managers, since collaborative documents leave little room for them to act as go-betweens.

Scoop, a hybrid technology company that monitors the work policies of almost 6,000 US-headquartered businesses as part of its “Flex Index”, says 32 per cent of those companies require no office time from their employees. These are predominantly working asynchronously, says Scoop chief executive Rob Sadow.

Several companies, such as Notion and Atlassian, have sprung up offering asynchronous tools, enabling colleagues to create internal reference materials, delegate tasks, monitor the progress of projects and collaborate on work at any time, wherever they are.

About 1,500 companies use Slite, a Paris-based document management platform that enables workers to create documents and quickly find information, says chief executive Christophe Pasquier. “For the vast majority of our users, it becomes an asynchronous work tool.”

In theory, asynchronous working patterns make it quicker for rank-and-file employees to collaborate without meetings or supervision: everyone works directly on projects in a shared workspace, that allows companies to have a thinner management layer.

“Essentially, managers are just transmissions of information . . . all of that is accessible by everyone in the organisation all at the same time,” explains Liam Martin, co-founder of employee monitoring company Time Doctor. He estimates that asynchronous companies tend to have about half as many managers. “A lot of the classic things that managers were doing are essentially redundant inside of async [organisations].”

However, to build a team spirit and create more organic connections, many asynchronous organisations schedule video “coffee chats”, or set aside time in calls to replicate the chit-chat of in-person meetings. Many also bring staff together for away days.