Now Uttar Pradesh strikes a blow to China.

Companies sharing border with India (read China), will no longer participate in the tender bids for contracts of any government project in UP. The state government has asked all departments to stop it.

Who can slap a super power?

China may have notions of being a Super Power but it is being slapped by India and now it’s slapped by most populous State of India. Is this how a super power is treated? China and Pakistan stand in same pariha club.

About Uttar Pradesh.

With population of 220 million and some of the largest projects like metro trains in 5 cities, Ganga Expressway, Ayodhya City Development, Airports at Zevar and Ayodhya, Defence Industrial Estate in Bundelkhand, it is the most happening place in terms of projects and investment running into more than 100 billions.

The state government of Uttar Pradesh has issued an order in this regard. In this, all departments have been asked to take necessary action with regard to prohibiting the involvement of bidders or companies of such countries in government procurement. A letter has been sent to all departments in this regard. This includes PPP projects, state run projects, public sector undertakings and corporations and local bodies projects and government procurement.

Actually, the countries with geographical borders with India are China, Myanmar, Bangladesh, Nepal, Pakistan, Bhutan, Sri Lanka and Nepal etc. Although no country has been named in the order, but considering the current situation and tension on the border, it is believed that this time the Chinese companies will be affected more. 58 Chinese app has already been banned by the Union government.

The central government has issued an order to the UP government to implement the system. Now the state government will create a competent authority. Under this authority companies of the respective countries will have to register here. First, these companies will have to seek political consent from the Ministry of Defense and the Ministry of External Affairs and security related permission from the Ministry of Home Affairs. After this the registration process will start in U.P..

Authority will p the details of how many companies’ applications came, how many were rejected and how many applications were approved. The state government will send the entire report to the cabinet secretary of the central government every third month. Such steps have been taken by the central government to protect national security and the country.

Globalization in Aviation after Pandemic is over.

Open Skies agreements eliminate government interference in the commercial decisions of air carriers about routes, capacity, and pricing, freeing carriers to provide more affordable, convenient, and efficient air service for consumers.

Open Sky Agreements are bilateral agreements that the two countries negotiate to provide rights for airlines to offer international passenger and cargo services. It expands international passenger and cargo flights. USA and European Union has such agreement which permits unlimited flights subject to operational feasibility between 2 countries.

Policy of India:

India has Air Service Agreements (ASA) with 109 countries including UAE covering aspects relating to the number of flights, seats, landing points and code-share. But does not allow unlimited number of flights between two countries.

The National Civil Aviation Policy (2016) of India:

The policy of 2016 allows the government of India to enter into an ‘open sky’ air services agreement on a reciprocal basis withSouth Asian Association for Regional Cooperation (SAARC) nations as well as countries beyond a 5,000 kilometre radius from New Delhi.

In plain English this means that countries within 5,000 kilometer of distance need to enter into a bilateral agreement and mutually determine the number of flights that their airlines can operate between the two countries.

India has many such open sky agreements with countries like Greece, Jamaica, Guyana, Finland, USA, Japan, etc.

That was pre Pandemic world of globalization. With air traffic coming to a hault on 24 March 2020 we are in a new world. India has started entering into agreements with many countries like Germany and UK which have been called air bubbles but these are simply bilateral agreements fixing the number of flights which each country will operate into territory of each other.

This means all previous agreements are as good as dead letter or will those agreements revive automatically in future?

Something tells me that this pandemic gives another opportunity to clean up the mess created by previous Government in it ten years corrupt regime when everything was for sale including lives of people and territories. Yes Manmohan Singh, We know it now.

Therefore the Government may use the clean slate to work and create an actual bilateral agreements not dictated by ‘donations.’

Another Economic Slap on China with luv from India

Luv to China from India:

On First April or Day 8 of Lockdown, a scheme called Production Linked Incentive Scheme was launched for Large Scale Electronics Manufacturing which extends an incentive of 4% to 6% on incremental sales (over base year) of goods under target segments that are manufactured in India to eligible companies, for a period of five years subsequent to the base year (FY2019-20). The scheme was open for filing applications till 31.07.2020. Incentives are applicable under the scheme from 01.08.2020.

This will spell a loss of INR 11,50,000 crore approximately to China.

Global who of who of Mobile Industry Arrive:

A total of 22 companies have filed their application under the PLI Scheme.

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Pandemic or not, rich get richer all the times?

Mukesh Ambani works from home:

Reliance Industries has become the first Indian company to enter the ranks of top 50 most valuable companies in the world, as its share price crossed the Rs 2,050 mark last week, giving the oil-to-telecom major a market cap of over Rs 13.06 lakh crore ($174.34 billion).

Thus Reliance Industries is the first Indian company to cross the Rs 13 lakh crore mark in market cap. It is now more valuable than Chevron and Unilever, whose market cap stood at $169.97 billion and $135.18 billion respectively.

Globally Reliance is at 48th position in the list of 50 most valuable companies, which is headed by Saudi Aramco, at $1.7 trillion. Incidentally, Saudi Aramco is currently in talks with RIL for a stake purchase in the latter’s oil business.

If one adds the market cap of RIL’s partly paid shares, the Mukesh Ambani-controlled company’s total market cap rises to Rs 13.56 lakh crore. The company’s market cap has more than doubled since the last week of March, when its share price hit a yearly low of Rs 867.

The upward revision in valuation of Reliance has also propelled Ambani to the 6th rank on the Bloomberg Billionaires Index, with a net worth of $75.6 billion (Rs 5.66 lakh crore).

This weekend the Reliance share last traded at Rs. 2067 down from the daily high of 2129.

What a work from home for Mukesh Ambani it’s CEO!!

But position is not very different for other billionaires. See:

China: An Economic Power or a black hole in the making?

Economic bubble called China!

China wants War with India (Part 10)

The total debt of China is 303% of it’s GDP as per Reuters which quoted International Institute of Finance. Thus in 2019 the total debt of China stood at 40 trillion USD which is equivalent to 15% of global debt. Imagine out of 192 countries, just one country owes over 1/6th of the global debt.

As per South China Morning Post this debt has risen to 317% in May 2020. Remember that this news paper is, like all media inside China, prints only what is suitable to Government. Now do a quick math and calculate what shall be servicing cost of this debt? It means the annual liability to pay interest even if no debt is repaid in a particular year. As per this link the rate of interest fixed by Reserve Bank of China is 2.72%

Please note that the countries, especially those whose currency is not pegged to dollar have to pay interest much higher than that is fixed by reserve Bank. Even USA whose Reserve Bank called Federal Reserve is presently at 0.25% yet it is forced to borrow money at six times that rate. Now Assuming that China has to service its debt at 4.5% per year, how much is yearly pay out?

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