Home   »   Daily Financial News Analysis – 15th...

Daily Financial News Analysis – 15th Nov’19 | Free PDF Download

 

  • Global supply chains occupies a key role.
  • Apart from innovation and design, success of various products could be traced in the design of successful supply chain strategy of the multinational corporations.
  1. Apple purchases components from various suppliers spread all over the world.
  2. Then gets these shipped to the assembling plant in China.
  3. The finished product then is shipped to Apple’s stores and online channels all over the world.

  • Samsung exited its smartphone assembly operations in China by closing its last assembly unit in Guangdong.
  • Apple’s smartphone market share in China has emerged highly competitive due to the strong presence of the local players.
  • Globally, Apple is wrestling with the future of iPhone’s capability to keep pace with the high expectations of product innovation in smartphone category.

  • Apple has asked its key manufacturing partners like Foxconn, Pegatron, and Wistron to evaluate the available options.
  • Apple has relocated some of its manufacturing bases to India as a source of regaining competitive advantage in the form of lower wages in the assembly of iPhones.
    1. Apple iPhone XR: Chennai
    2. Wistron had started iPhone assembly: Bengaluru
  • Push factors of China
    1. wages increasing
    2. threats of trade war
  • Pull factors of countries like Vietnam or India
    1. improved their attractiveness as business destinations
    2. India: 130 in 2017 to 63rd rank
    3. While the proportion of formally skilled workers is much lower, in comparison with China.
  • India’s burgeoning services sector and significant number of high-skilled graduates related to information technology could give comfort to the multinational corporations, like Apple, to relocate their base.
  • The recent cut in corporate tax rates could also act as an incentive.
  1. AT Kearney Foreign Direct Investment Confidence index
    1. India has slipped from 8th position to 16th position from 2017 to 2019
    2. China too has glided from the third position to 7th position during this period.
  2. What gets relocated to India today may well get relocated to Vietnam tomorrow.
    1. maintain our comparative advantage
  • It would be an uphill task for technology firms to replicate the incumbent capabilities and advantages of an ecosystem offered by China.
  • Foxconn had a monumental advantage of process differentiation in China in the form of volume flexibility of ramp-up and ramp-down, tooling and engineering capabilities at lower cost, stable component supplier base.
  • The real dividend for Make-in-India would be when the value creation in the supply chain is enhanced.
  • It is well-understood that in sustainable business models, process innovations often trump over product innovations.
  • With so much of competition in the product innovation in smartphone category, the real differentiator is the process design of the supply chain.
  • Report of the UNCTAD on “Trade and trade diversion effects of United States tariffs on China”
  • Out of an estimated $35 billion loss in Chinese exports due to the trade war, about $21 billion (63%) were diverted to other countries.
    1. India gained about $755 million in additional exports
    2. Extent of gain was much more in case of countries like Mexico ($3.5 billion), or Vietnam ($2.6 billion).
  • Made in country x” has become a misnomer as ‘x’ would involve large number of countries, and different locations could have a share in the final value added.
  • The news of iPhones being made in India is indeed a welcome development particularly at a time when amidst the current slowdown we are in look out for some silver lining.

New Development Bank

  • NDB: launched in 2014
  • By China, India, Russia, Brazil and South Africa.
  • NDB has a subscribed capital of $50 billion, of which $10 billion is paid capital.
  • Diplomats for Brazil and one other BRICS nation said expansion of the bank is on the agenda at the annual summit November.
  • Bank’s membership is open to all members of the United Nations
  • Its mandate is to mobilize funds for sustainable development projects in BRICS and other emerging economies and developing countries.
  • Bank’s total project approvals stood at $12.5 billion for 45 projects.
  • In 2019 alone it approved 14 loans worth $4.4 billion

IndiaSwitzerland

  • India and Switzerland on Wednesday called on tax authorities to further enhance their collaboration in curbing the black money menace.
  • The first transmission of financial account information on automatic basis between the two countries took place in September 2019 for enhanced cooperation in the fight against tax evasion.
  • Both countries expressed their commitment to global tax transparency for tackling offshore tax evasion.
  • Both nations also agreed on continuous dialogue at the level of competent authorities of the two countries to further enhance the cooperation under the India-Switzerland tax treaties.

Q1 Name the President of New Development Bank.

  1. Christine Lagarde
  2. K.V. Kamath
  3. Gita Gopinath
  4. Elvira Nabiullina

Q2 Name the state that has topped the first Innovation Index by NITI Aayog.

  1. Kerala
  2. Tamil Nadu
  3. Maharashtra
  4. Karnataka

 

 

 

Download Free PDF

 

Sharing is caring!

Download your free content now!

Congratulations!

Download Upcoming Government Exam Calendar 2021

Download your free content now!

We have already received your details!

Please click download to receive Adda247's premium content on your email ID

Incorrect details? Fill the form again here

Download Upcoming Government Exam Calendar 2021

Thank You, Your details have been submitted we will get back to you.

Leave a comment

Your email address will not be published.