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Elon Musk’s long courtship of Indian officialdom may have finally paid off. Prime Minister Narendra Modi wanted him to open one of his Tesla “gigafactories” in the country, as part of its efforts to expand its long-moribund manufacturing sector; Musk, meanwhile, wanted India to address tariffs on electric vehicle imports that rendered foreign-made Teslas uncompetitive.On March 15, the government announced a new scheme to promote investment in EVs. Any company willing to invest $500 million in a new manufacturing facility that begins production in three years (and with at least a quarter of its components added locally, to begin with) will also be allowed to import 8,000 high-end vehicles a year at a lower tariff of 15%. It’s generally assumed that this quid pro quo will be enough to get Musk — and, hopefully, one or two other companies, like Vietnam’s Vinfast Auto Ltd. — to bite. Certainly, the EV producers that currently dominate the Indian market are already bracing for competition.On the one hand, this looks like business as usual. Officials have made a habit of using the supposed potential of the domestic market as an inducement for foreign investors. The stick of high tariffs together with the carrot of possible consumer demand growth should be enough to lure in people like Musk, they think.That said, there’s a deeper story to be told here. Size matters: The Indian government is a big believer in the transformative potential of a single large investor. Officials expended enormous amounts of energy wooing Apple Inc. They were ultimately successful, and now think an entire mobile phone manufacturing ecosystem will grow up around Foxconn Technology Co.’s factories in south India. For the past few years, they’ve been working to convince Taiwan Semiconductor Manufacturing Co. to do the same. It’s an anchor investor strategy: Get a whale like Musk in, and the minnows will follow. If Apple and Tesla are both putting hundreds of millions into backing the India story, it is something of a statement about the country’s business environment, right? This isn’t the first time governments have tried this, of course. China famously waived its domestic ownership requirements to get Tesla to open a gigafactory in Shanghai. That seems to have paid off: Tesla says that over 95% of the parts that factory uses come from local suppliers. And Musk’s claim that he couldn’t invest big in a country that didn’t allow him to get enough cars on the ground first did have a certain logic. Importing vehicles to begin with allows you to start creating a charging infrastructure, for example. That in turn grows the domestic market enough to justify the investment you make in local production.There’s a lot more that India could do to help this trend along. For example, EV makers who take up this offer should be encouraged to invest in interoperable charging. Land is scarce, and finding space for multiple different kinds of EV charging stations would otherwise be a nightmare.Tesla does have an advantage when it comes to making deals like this: Its business model stresses vertical integration. That’s why its factories are giga-sized, after all. It’s easier for them to make promises about localization since they have greater control over their supply chains than their competitors do.How will local companies deal with new entrants into India’s EV market? The optimistic take here is that companies like Tata Motors Ltd., if they’re worried about competition from the Teslas of the world now that tariffs have come down, should argue more strenuously for lower trade barriers all round. That’s the only thing that would keep them competitive, given their more expansive supply chains. The automobile sector needs to become the loudest voice in favor of trade deals like the ones the country is currently negotiating with the UK and the European Union. Manufacturing will only take off when the business climate really improves — when tariffs are low and stable, and regulators are as welcoming to smaller companies as they are to whales.India’s big bet on big companies may pay off. This is clearly where its industrial policy is going now: relying on trusted foreign partners to transform entire sectors. But, you ask, can you trust Tesla with a task of this magnitude? Or, in particular, Elon Musk, given his history of missed deadlines and impulsive business decisions? The government may have bet on Tesla, but it’s not taking any chances, either. Any company choosing to take India’s deal will also have to put up a bank guarantee in case it fails to follow through on its promises of investment and local sourcing. Trust, but verify bank details first.

New Delhi: India is preparing to replace the minimum wage with living wage by 2025 and has sought technical assistance from the International Labour Organization (ILO) to create a framework for estimating and operationalising these, ET has learnt.Living wages – a minimum income necessary for a worker to meet their basic needs, factoring in key social expenditure by an individual such as housing, food, healthcare, education and clothing – were endorsed by the ILO earlier this month. These would be higher than basic minimum wages. “We could go beyond minimum wages in a year,” a senior government official told ET.The ILO had agreed on the reform at its 350th governing body meeting in Geneva that concluded on March 14. There are over 500 million workers in India and 90% of them are in the unorganised sector where many draw a daily minimum wage of `176 or more, depending on the state where they work. However, this national wage floor — not revised since 2017 — is not binding on states and hence a few states pay even less than that. 108755679The Code on Wages, passed in 2019 but yet to be implemented, proposes a wage floor which will be binding on all states once the Code is implemented.India is a founding member of ILO and a permanent member of its governing body since 1922.New Delhi is striving towards achieving the sustainable development goals (SDGs) by 2030 and there is a view that replacing minimum wages with living wages could fast-track India’s efforts to pull millions of its people out of poverty while ensuring their wellbeing, officials said.“We have sought help from ILO for capacity building, systemic collection of data and evidence of the positive economic outcomes resulting from the implementation of living wages,” the official quoted above said. Labour secretary Sumita Dawra, in her intervention on the issue at the ILO, had proposed that the UN body must take into account health, education and standard of living as key indicators to arrive at a definition of living wages for developing countries as these measures are used to assess the national multidimensional poverty in India.“National Multidimensional Poverty Index in India measures simultaneous deprivations across the three equally weighted dimensions of health, education and standard of living that are represented by 12 sustainable development goals-aligned indicators,” she said in her intervention. “Living wage definition must incorporate these dimensions,” she said, pointing out that the standard of living component must include the components of economic, social and demographic factors.

Six asset reconstruction companies, including Aditya Birla and Kotak Mahindra-backed ARCs, have accumulated 55% of KSK Mahanadi Power's ₹29,330-crore debt from lenders in separate transactions, shows disclosure made by the stressed thermal power company's resolution professional. The ARCs brought over ₹16,168 crore in loans in the hope that there would be demand for thermal power companies, giving them a huge upside, while lenders have exited due to over a four-year delay in its debt resolution.In the latest deal, Prudent ARC acquired ₹156 crore of debt from Punjab & Sind Bank (PSB) at an unchallenged Swiss auction in an all-cash deal of ₹125 crore, said people with knowledge of the matter. This equated to an 80% recovery for the lender.In February, PSB was planning to sell the same debt for ₹95 crore, equating to 57% recovery. It did not proceed with the auction and decided to fix the reserve price in context to the rising cash accumulated by KSK Mahanadi Power, people cited above said.The company has around ₹8,500 crore in cash, which it earned in the last four years from power generation. It has three 600 MW operating units at Chhattisgarh and three other 600 MW units are under construction.Prudent ARC already has ₹914 crore admitted claims in KSK Mahanadi Power following acquisition of debt from banks and other ARCs, shows data disclosed on the company's website. Senior officials at Prudent ARC declined to comment.Among ARCs, Aditya Birla ARC has largest share of 33.38% in claims from KSK Mahanadi Power, followed by ASREC (India) Ltd which has 11.98% debt share and Prudent Arc with 3.82% debt following the latest deal, show disclosures by PwC-backed resolution professional Sumit Binani. Among others, Kotak Mahindra Bank Phoenix ARC has 2.92% while Rare ARC and Asset Reconstruction Company of India (Arcil) have 2.10% and 0.98%, respectively.The ARCs acquired loans from some of the largest lenders including the State Bank of India, Bank of Baroda, Punjab National, Axis Bank, and Life Insurance Corporation - who often have a significant say in the debt resolution of companies undergoing debt resolution. The 55% debt held by the ARCs also implies that these six ARCs will have voting rights to that extent and will also have a veto over any proposal that is put for vote. As per the Insolvency and Bankruptcy Code (IBC), to pass any resolution, at least 66% of lenders must vote in favour. Conversely, if less than 34% oppose the resolution, the proposal is rejected.KSK Mahanadi Power has two ancillary companies-KSK Mahanadi Water, which operates a water pipeline to the power plant, and Raigarh Champa Rail, which carries raw material to the plant-that are undergoing insolvency proceedings separately.The resolution of the thermal power company has not proceeded after the National Company Law Tribunal (NCLT) stayed the sale process in June 2022 following a plea from a lender to consolidate the resolution of KSK Mahanadi Power and two of its ancillary companies.