Arvind's Newsletter

1.Dell, HP among 32 firms that have applied for Hardware PLI

The Indian government has received a positive response from global companies, including Lenovo, HP, Dell, and Acer, for its Production Linked Incentive (PLI) Scheme for hardware. The government has received applications from 32 companies for the scheme, which aims to promote the manufacturing of laptops, PCs, tablets, and other devices in India. However, Apple has not applied in the scheme.

Electronics, IT and telecom minister Ashwini Vaishnaw said on Wednesday that the response to the scheme was better than anticipated and the government is expecting to get investments worth ₹2,430 crore, which will generate direct employment for 75,000 people while generating incremental production worth ₹3.35 trillion.

2.U.S. Announces First Drugs Picked for Medicare Price Negotiations

The US has the highest drug prices in the world. So on Tuesday, the federal government took a first historic step to rein them in. Medicines made by massive pharmaceutical companies such as Bristol-Myers Squibb, Johnson & Johnson and Eli Lilly became the first targets of the White House’s campaign to leverage a new tool against the industry: the negotiating power of Medicare, the healthcare safety net for roughly 65 million senior citizens.

For years, the government has been barred from bargaining over drug prices as the industry’s profits soared. But now, President Joe Biden’s sprawling Inflation Reduction Act has mandated that drug companies come to the table (though Big Pharma is of course suing to block the law). Litigation notwithstanding, the first group of drugs named by the administration includes Eliquis, the blockbuster blood thinner by Bristol-Myers and Pfizer and the costliest on Medicare’s list, accounting for $16 billion of spending in just one year. Other medications under scrutiny range from treatments for diabetes to leukemia.

The US expects the law will result in prices being slashed by half, with the first cuts taking effect in 2026—if it withstands court challenge, that is.

3.De-coupling (from China) isn’t phoney, writes Economist Noah Smith in this piece. He piece is a contra response to recent articles in The Economist which declares that “Joe Biden’s China strategy is not working” and informs “How America is failing to break up with China”. It is a long but worthwhile read. Some excerpts:

“Decoupling is not an instantaneous process. China spent two decades becoming the workshop of the world; the rest of the developing world isn’t going to mirror that accomplishment in one or two years.

But there are reasons to think the process is just getting started. Although the Economist articles present decoupling as being driven by Biden’s policies, the truth is that the U.S. government has barely begun to push. Export controls are narrowly focused on the chip industry, and the Inflation Reduction Act isn’t really about decoupling at all. Other than that, all Biden has done so far is a set of investment restrictions that was very weak and narrowly targeted at a couple of high-tech industries, some minuscule investments in onshoring of critical minerals, and some minor deals with allies to share the benefits of green energy tax credits. He kept Trump’s old tariffs on China in place, but didn’t strengthen them.

That means that so far, most of the decoupling that’s being done is being driven by the prudent decisions of private companies and investors — natural market forces, rather than the visible hand of government policy. There’s no reason to expect those forces to reverse themselves — even setting aside the threat of war, every nation has seen some manufacturing activity leave for cheaper countries once costs rise. And meanwhile, the engine of U.S. government policy — and European government policy, etc. — is just revving up. Once policymakers figure out which policies actually speed decoupling without injuring the economy, you can expect them to double down on those.

This is only the very beginning of the decoupling story.”

4.Air pollution reduces global life expectancy more than smoking or alcohol, a new study suggested. 

University of Chicago researchers found that pollution costs the average citizen 2.3 years of the their life, compared to 2.2 years for smoking — although that figure would be much higher just among smokers. Bangladesh is worst hit: Its average citizen would gain 6.8 years if pollution were reduced to safe levels. China, on the other hand, has made “remarkable progress.”

The rich West has also transformed its air. Most European cities have stringent pollution laws, meaning their citizens only face a roughly six-month penalty to life expectancy. London even expanded its “ultra-low emission zone” just this week to include its suburbs, in the face of political controversy.

5.Regular readers of this newsletter are probably aware that I am a fan of Tyler Cowen’s podcast, Conversations with Tyler and his blog, Marginal Revolution.

The latest guest on his podcast is with Chess great, Vishy Anand, whom in interviewed in his recent visit to Chennai. This is a must listen to (podcast), watch (Video on YouTube) or read the transcript here.

Here is brief summary: Tyler and Vishy sat down in Chennai to discuss his breakthrough 1991 tournament win in Reggio Emilia, his technique for defeating Kasparov in rapid play, how he approached playing the volatile but brilliant Vassily Ivanchuk at his peak, a detailed breakdown of his brilliant 2013 game against Levon Aronian, dealing with distraction during a match, how he got out of a multi-year slump, Monty Python vs. Fawlty Towers, the most underrated Queen song, how far to take chess opening preparation, which style of chess will dominate in the next ten years, how AlphaZero changes what we know about the game, the key to staying a top ten player at age 53, why he thinks he’s a worse loser than Kasparov, qualities he looks for in talented young Indian chess players, picks for the best places to eat in Chennai, and more. One hour long.