India May 20: Vikram Singh Mehta, Chairman Brookings India, in conversation with Roddy Gow and Stewart Langdon about India in light of COVID19

India May 20: Vikram Singh Mehta, Chairman Brookings India, in conversation with Roddy Gow and Stewart Langdon about India in light of COVID19

Vikram Singh Mehta, Chairman Brookings India and Senior Fellow of the Brookings Institution, former CEO of Shell India with extensive experience of various petroleum majors in Europe and India speaks with Institute Chairman, Roddy Gow and Institute Board Member Stewart Langdon about political and economic issues facing India in light of COVID19 here: https://youtu.be/M2smivgeXU0

Lalcap Ltd: India Report – May 20

In the context of our interview with Chairman Brookings India it is apposit for us to present to you the latest Lalcap Ltd, India Report. The Institute is grateful to Lalcap Ltd and its Chairman, Deepak N. Lalwani OBE for allowing us to publish this report.

The India Report does not offer investment advice, and does not comment on individual shares or portfolios. Rather, its aim is to tell the unfolding India economic story at a macroeconomic level in an unbiased, measured, succinct and lucid way. The full report is provided here: http://www.asiascot.com/wp-content/uploads/2020/05/2020_05_14-India-Report-1.pdf. However, a summary of key points is provided below:

  • As countries start to relax lockdowns to revive their devastated economies the World Health Organization (WHO) soberly warned that the coronavirus “may never go away”;
  • The risk looms of a second, and even worse, wave of infections. The difficult decision for governments globally is stark: to save lives or save economies and livelihoods? Having first focused on saving lives, albeit at a cost, governments now strive to cautiously save livelihoods by relaxing lockdowns and cautiously opening their economy;
  • India has more than 78,000 Covid-19 cases among its 1.3 billion population and is set to surpass China, the origin of the outbreak, this week. The death toll is nearly 2,600. Infection cases have been surging despite the lockdown and this causes worry;
  • As a result Modi is probably going to announce strict stay-at-home orders with a new set of rules (Lockdown 4.0) beyond May 17, when the current lockdown ends; 
  • In a national address on Tuesday PM Modi announced further very generous fiscal and monetary measures to support millions out of work, and businesses battered by Covid-19 in the world’s biggest lockdown;
  • India is to provide 20 trillion rupees ($266 billion) in a package equivalent to nearly 10% of India’s gross domestic product. The “Aatmanirbhar Bharat” (”Self-reliant India” in Hindi)  stimulus programme is to focus on making India self-reliant;
  • “The package will also focus on land, labour, liquidity and laws. It will cater to various sections including cottage industry, medium and small enterprises, labourers, middle class and industries, and will focus on the well-being of migrant workers too among others” said Modi;
  • Modi said the reforms of the land and labour markets were intended to make India more competitive and a big player in global supply chains, some of which could shift away from China after the pandemic. This could give a boost to his “Make in India” programme started in 2014, which has yet to be a resounding success;
  • Yesterday Finance Minister Nirmala Sitharaman said that out of the $266 billion the government will offer nearly $60 billion of loan guarantees for small businesses, shadow banks and power companies. Also 900 billion rupees ($11.95 billion) is to be made available for power distribution companies via state-run power finance companies;
  • India is among the largest manufacturers of generic drugs and vaccines in the world and could play a major role in the fight against the coronavirus. It has about six major and many smaller vaccine manufacturers. Currently half a dozen Indian firms, among about a hundred firms globally, are developing vaccines against Covid-19;
  • The world’s largest vaccine maker by number of doses produced and sold globally (more than 1.5 billion doses) is the privately-owned Serum Institute of India based in Pune, India.  The company estimates that about 65% of the children in the world receive at least one vaccine manufactured by it;
  • The University of Oxford, backed by the UK government, is a leader in the global race to develop a positive response to the novel coronavirus.  If all goes well all trials of the potential Oxford vaccine are expected to finish around September/October;
  • The UK government is confidently taking a bet that the outcome above will be successful and is backing the manufacture already of the Oxford vaccine, despite final results yet to be known. The Serum Institute of India plans this year to produce up to 60 million doses of Oxford’s potential vaccine.  If the vaccine is successfully authorised by the UK health regulator then Serum plans to produce up to 400 million doses next year;
  • Serum has also partnered with the U.S. biotech firm Codagenix and Austria’s Themis on two other COVID-19 vaccine candidates and plans to announce a fourth alliance this month. Serum’s board last month agreed to invest Rs 6 billion (about $80 million) to set up a dedicated unit solely to produce coronavirus vaccines;
  • Gilead Science Inc of U.S.A. was granted emergency use authorisation of its antiviral drug Remdesivir (an intravenous infusion) by the U.S. Food and Drug Administration (USFDA) for COVID-19. Gilead said it was negotiating long-term licenses with several generic pharmaceutical companies, including in India and Pakistan, to produce Remdesivir for developing countries and that it would provide technology to aid the production; 
  • India’s Jubilant Life Sciences said on Tuesday it had signed a non-exclusive licensing agreement for selling Gilead Sciences Inc’s experimental COVID-19 treatment Remdesivir in 127 countries, including India. Jubilant also gets the rights to manufacture the drug and scale up production in nearly all low-income and middle-income countries, as well as some high-income nations;
  • To “track, trace and test” India is aggressively pushing a state-backed contact tracing app on mobile smartphones to fight the spread of COVID-19. Aarogya Setu (“Health Bridge” in Hindi) has already been downloaded by about 100 million users since its launch in early April. Another 100 million are to be downloaded soon on Reliance’s cheap internet-enabled JioPhone;
  • However another 300 million Indians use basic feature phones which cannot access the Aarogya Setu app. For them, India has launched a toll-free number that connects their devices to the Aarogya Setu platform, allowing them to self-assess for COVID-19 via an interactive voice response system;
  • The Indian app uses Bluetooth, GPS location and also has a health QR code system with a feature that rates a person’s likely health status with green, orange or red colours, signifying whether the individual is safe, at high risk or a carrier of the virus.

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