On this version, we discuss Elon Musk-led electrical car firm Tesla’s plans for a long-awaited India entry. We additionally discuss Suzuki adjusting its technique in India, how Indian drugmakers are getting ready for deliberate tariff hikes by Donald Trump, and two different frauds that authorities unearthed in Mumbai and Hyderabad this week.
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On April 1, 2016, Elon Musk unveiled a prototype of his electrical car firm Tesla’s Mannequin 3 compact sedan at an occasion filled with pomp and present within the metropolis of Hawthorne exterior Los Angeles. The occasion created lots of buzz. The brand new automobile, its most inexpensive then, was thought-about important for Tesla to spice up EV gross sales and problem legacy carmakers like Ford, GM, and Toyota. By the tip of the primary day, Tesla had obtained orders for almost 180,000 Mannequin 3 automobiles. And Musk estimated that, at a median promoting worth of $42,000, these orders totalled almost $7.5 billion.
The revealing created pleasure far-off in India, too, after Musk tweeted that he had opened the reserving web page for patrons throughout a number of international locations. And a few Indians did get into the queue, writing $1,000-cheques to e-book their dream automobiles. Amongst these have been Paytm founder Vijay Shekhar Sharma and enterprise capitalist Mahesh Murthy.
Lots has modified prior to now 9 years. Tesla upended the auto business worldwide and emerged as the most important EV firm. Musk is now the richest particular person on the planet and the second strongest in America because the right-hand man of President Donald Trump. Sharma, too, turned a wealthy man and Paytm floated its IPO (after which everyone knows what occurred). However the Mannequin 3 or every other Tesla automobile by no means landed in India. That’s now set to vary.
For almost a decade now, Tesla has been seeking to enter India. It has explored organising showrooms and even a manufacturing facility in India a number of occasions. It additionally complained about India’s excessive tariffs on automobile imports and halted India entry plans in 2022. The thrill bought louder final 12 months simply earlier than the Lok Sabha elections when the federal government modified its EV coverage, which we wrote in our e-newsletter then, however Musk ditched a journey plan to India and as a substitute flew to China.
Modi and Musk, who first met in 2015, once more met just lately within the US after Trump was reelected as President. This assembly now seems to have set the ball rolling. Tesla hasn’t disclosed its plans and we don’t know what concessions it managed to wrangle out of the federal government, however we do know that it has marketed to rent individuals for 13 mid-level roles. It has additionally chosen places for 2 showrooms in New Delhi and Mumbai, and plans to promote imported EVs in India, delivery the automobiles from Germany, media reviews say.
For Tesla, the India entry is important because it faces a slowdown in world gross sales after surging in 2023 and 2024 due to the post-pandemic demand. Tesla’s world gross sales fell 1% in 2024, recording its first-ever drop. Gross sales are falling additional in 2025. Tesla gross sales slumped throughout Germany, France, the UK, and China in January. In the meantime, competitors from Chinese language firms equivalent to BYD is rising. Actually, BYD final 12 months virtually matched Tesla gross sales globally.
BYD additionally imports its automobiles to India, the place the EV market is a fraction of the full business and is dominated by Tata Motors, Mahindra & Mahindra, and a three way partnership of JSW and China’s MG Motor. Tata Motors and M&M shares have slipped as Tesla’s plans turned clearer. Each firms in addition to JSW-MG have accelerated their EV plans in recent times. So, whereas Tesla might quickly begin rolling right here, it gained’t discover the going really easy on India’s potholed roads.
Shifting Gears
Whereas Tesla is about to enter India, the carmaker that has been round for greater than 4 a long time is adjusting its plans.
Japanese carmaker Suzuki Motor, the mother or father of business chief Maruti Suzuki, has reduce its gross sales goal in India and stated it now plans to launch solely 4 EVs as a substitute of the six deliberate earlier.
Suzuki stated this week it goals to promote about 2.5 million automobiles yearly in India by March 2031. That is down from the 3-million goal set in October 2023. It additionally plans to ramp up its SUV line-up in view of fixing buyer tastes however has eliminated the 2031 deadline to double its manufacturing capability to 4 million models a 12 months.
In the meantime, it plans to develop its world gross sales by a 3rd to 4.2 million autos by 2030. But it surely famous that EV gross sales, significantly in Europe, are slowing and that it’s as a substitute engaged on different applied sciences equivalent to hybrids and biogas.
Suzuki has been shedding market share in India in recent times as gross sales of small automobiles—its forte—slumped whereas bigger, extra feature-rich automobiles and SUVs supplied by Tata Motors, M&M and the Hyundai-Kia group gained floor.
After all, Suzuki isn’t giving up on India. It intends to extend its market share, which fell from 51% earlier than the pandemic to 41% now, again to 50%, though it has shifted the deadline by 5 years to 2031.
India additionally stays Suzuki’s most necessary market and can get almost 60% of its deliberate funding globally. India may also be Suzuki’s hub for exports to the Center East and Africa.
Will the change in technique assist Suzuki claw again its misplaced market share and increase gross sales? Let’s hope it does!
The Bitter Tablet
Maruti and Tesla aren’t the one firms rewriting their playbooks. Numerous firms internationally, together with in India, are doing simply that ever since Donald Trump returned because the US president a month in the past. This week, it was the flip of pharmaceutical firms in India.
Trump stated this week he intends to impose import duties of 25% or greater on semiconductors and prescribed drugs, and lift the tariffs considerably thereafter. This has despatched pharmaceutical firms right into a tizzy.
The US is the most important marketplace for most Indian pharma firms. In 2023-24, Indian drugmakers exported merchandise price $8.7 billion to the US, in keeping with the Prescribed drugs Export Promotion Council of India (Pharmexcil). This was rather less one-third of whole pharma exports from India.
If the tariffs do come into place, they will damage a number of firms. India’s largest drugmaker Solar Pharma, as an illustration, will get a 3rd of its income from the US. For Dr Reddy’s Labs, the US and different North American markets account for nearly half of its annual income. Cipla, Biocon, Lupin, Glenmark Pharma and Zydus additionally get anyplace between 25-40% of their gross sales from that area.
Whereas the tariffs might power these firms to search for new development markets, the US itself might become an enormous loser. For, Indian drugmakers largely export low cost generic medicine to the US. These medicines assist US shoppers hold their very own healthcare prices low. The imposition of tariffs might immediate the businesses to move on the worth hikes to the shoppers.
Indian firms say the deliberate transfer will likely be dangerous for American shoppers themselves and that they hope bilateral talks may assist keep away from the tariffs. To date, nonetheless, Trump stays adamant.
In an interview to Fox Information this week, he stated that he informed Prime Minister Modi throughout their assembly in White Home that the US would impose reciprocal tariffs on each nation that levies a tax on American imports. India has already reduce some tariffs on American bikes and bourbon, and is more likely to provide a candy deal to Tesla as nicely. Will that be sufficient for Trump to stroll again on pharma tariffs? We must wait and watch.
Scams and Frauds
Final week, we wrote in regards to the inventory market scams that the Securities and Trade Board of India had unearth. This week, we discuss two incidents of fraud unrelated to the inventory market which have come to mild since then.
On Feb. 13, the Reserve Financial institution of India stopped Mumbai-based New India Co-operative Financial institution from granting new loans and suspended deposit withdrawals for six months. The next day, it outdated the financial institution’s board of administrators and appointed a former State Financial institution of India government because the administrator. The ban on withdrawals—the financial institution has whole deposits of Rs 2,436 crore—shocked prospects and created chaos.
The RBI cited “supervisory issues emanating from the current materials developments” and “sure materials issues emanating from poor governance requirements” within the financial institution for its resolution.
What does this gobbledygook really imply?
The regulator didn’t give any explanations for its choices. A number of media reviews, nonetheless, identified the issues that plunged the financial institution into disaster. The reviews say New India Co-op had been grappling with losses for the final two years. It posted a lack of Rs 22.8 crore for 2023-24 and Rs 30.75 crore loss the 12 months earlier than.
Later this week, the Mumbai police arrested Hitesh Mehta, basic supervisor and head of accounts on the financial institution, for allegedly siphoning off Rs 122 crore. Mehta was allegedly giving depositors’ cash to merchants as unsecured loans throughout the pandemic. He additionally allegedly gave Rs 70 crore to an actual property developer Dharmesh Paun, who has additionally been arrested.
In one other fraud, this time in Telangana, police arrested two individuals after a case was filed towards an organization known as Falcon Bill Discounting. The police say Falcon collected Rs 1,700 crore from virtually 7,000 buyers since 2021 and promised returns of as much as 22% by claiming to attach them with firms equivalent to Amazon and Britannia.
That by no means occurred, after all, as a result of it was a Ponzi scheme the place Falcon was paying cash to buyers by accumulating cash from different buyers. The police estimate that Falcon has returned solely about half the cash it collected. The police are actually trying to find Falcon’s founder Amardeep Kumar.
In each instances, investigations are nonetheless occurring, so we don’t have the total image but. What is evident, nonetheless, is that the variety of scams and frauds, whether or not within the inventory market or by faux apps or web sites, is on the rise. So, please be vigilant and don’t fall prey to scamsters.
Market Wrap
India’s inventory markets remained within the unfavourable zone this week as overseas portfolio buyers continued to promote and Trump’s tariff warnings weighed. The BSE Sensex ended down 0.8% whereas the Nifty 50 slipped virtually 0.6%.
All IT shares closed with losses this week, led by TCS and Infosys. Drugmakers Solar Pharma and Dr Reddy’s Labs slipped greater than 3% every. HUL, Britannia, Tata Client and Trent ended decrease as issues about weakening client demand persist. Bharti Airtel, ITC and ICICI Financial institution have been the opposite main losers.
The most important loser this week was M&M, which fell virtually 9% this week. Tata Motors and Maruti Suzuki additionally misplaced floor.
PSU shares, which had fallen final week, bounced again. NTPC led the Nifty gainers with over 8% soar. Coal India, Bharat Electronics, ONGC and Energy Grid rose, too. Different main gainers have been Shriram Finance, Eicher, Hindalco and Tata Metal.
Different Headlines
- US Securities and Trade Fee seeks India’s assist in Adani fraud probe
- Gold costs hit new report above Rs 89,000 per 10 gm
- India’s merchandise exports fall to $36.43 billion in January from $38.01 billion in December
- India’s merchandise imports fall to $59.42 billion in January from $59.95 billion in December
- India and Qatar set purpose to double bilateral commerce by 2030 to $28 billion
- Hexaware Applied sciences ends with 7.7% acquire on inventory market debut
- Bharti Enterprises sells 0.84% stake in Bharti Airtel for about $1 billion
- ONGC seeks three way partnership companions to construct very giant ethane carriers
- Uber follows Rapido, replaces commissions with subscription price for India autorickshaw rides
- SEBI plans SIM card-binding steps to safe buyers’ buying and selling accounts, forestall unauthorised transactions
- Tata Consultancy Companies faces accusations of dishonest the H-1B visa system
- PhonePe readies for IPO, posts consolidated revenue of Rs 197 crore earlier than ESOP prices for FY24
- Govt extends Chief Financial Adviser V. Anantha Nageswaran’s time period for 2 years till March 2027
- Suzuki cuts India gross sales goal to 2.5 million by 2031 from 3 million; to launch 4 EVs as a substitute of six earlier
- Vedanta shareholders, collectors approve splitting firm into 5 separate entities
That’s all for this week. Till subsequent week, completely happy investing!
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