CLIMATE POLITICS AND INDIA'S ROLE

 

In the 18th century Industrial revolution was started in the western part of the world. The 21st century is a very crucial phase for climate challenges. The global objective is to limit the temperature increase to 1.5 deg C above the pre-Industrial level. Every year, the United Nations Framework Convention on Climate Change (UNFCCC) holds a summit to update the plan to reduce carbon emissions.

Whatever the climate challenges that the world is facing now is mainly because of the developed nations' irrational use of natural resources. They achieved high economic growth in the last hundred years by using all the resources at the cost of other developing and underdeveloped countries. For example, Europe is a hub of the meat industry and the fashion industry, responsible for roughly 20% and 10% of total CO2 emissions.

India is being pressured to reduce its carbon footprints because it is the 3rd largest country globally in terms of CO2 emission, following China and the USA. But in terms of per capita CO2 emission India is not even in the top 50 countries. Recently on Glasgow 26th, the Conference of Parties was held. In the summit, India, the USA, China have proposed to set a target of Net Zero CO2 emission by 2070, 2060, 2050, respectively. India has put this target considering the needs of the country in coming years mainly to alleviate the poverty. Internationally, India is facing pressure from the developed countries, especially by the USA, for coal usage negotiation because India had changed its stance from 'Phase out' to 'Phase down' deal as well as demanded $1 trillion for renewable energy infrastructure set up as a condition to achieve net-zero CO2 emission by 2070. Underdeveloped countries like African countries have also put some conditions like financial aids, technology for infrastructure, and compensation for climate calamities. With the lack of willingness of rich countries to reduce carbon emission and to help needful countries with different resources, this target looks very distant. Despite India and China having a tense relationship with each other on many issues, both of these countries worked together and acted as an ally in this particular challenge because they share a common interest. The bottleneck is that the rich countries deliberately do not want to recognize the wrong done by them for many decades. These developed nations demand all of the countries to take the same target regardless of different economic stages. There are many underdeveloped islands whose existence is on the brink and most likely which will not be there after a few decades. There are many climate activists who are not recognizing the root cause and criticize India's limited efforts to reduce carbon emission. For example, when Indian Prime Minister Narendra Modi had remarked on carbon emission exemption to some extent for developing nations.

All these global leaders are making fools to the common people worldwide. They are setting targets with reference to the year, which is not relevant at all. What matters is the available carbon space as per the data provided by the UN that the approximately we have available carbon space to be around 550Gt at staying 1.5 deg temperature. By 2030 USA and China alone will emit 187 Gt CO2, which is 34% of the available budget. So the discussion should be on the amount allocated for every country as per its population, economic growth condition, and its reliance on nonrenewable energy resources and not on at which year a country will achieve net-zero carbon emission. With this logic, the developed nations have to reduce their CO2 emission drastically on an immediate basis. It shows that they are not willing to take concrete actions to fight against climate change, and that is why no one is negotiating in this direction. It is inevitable that within two decades, we will cross the limit of 1.5 deg temperature. In this capitalist and highly competitive world, there is a lack of trust and cooperation between countries that will lead to climate disaster in the coming years.

India has to reduce its reliance on fossil fuel resources and has to invest the maximum in renewable energy resources. Even though India has stopped emitting carbon still, we cannot alter the situation in a positive outcome. So accepting the circumstances, we have to brace ourselves for different problems. India has a very big coastline, and climate calamities are going to be inevitable, so we need to be prepared as earliest as possible for all the future challenges.

About The Writer

   Jay Dudhela

   Pursuing PGDM at IMT Hyderabad

 A detailed observer with an interest in social and business affairs explains India's stance on climate change.

WHY DO NEW RETAIL INVESTORS LOSE MONEY IN THE STOCK MARKET?

The stock market is quite possibly the best avenue to earn additional income – provided that one approaches it with the proper knowledge and the right decisions. There are thousands of companies and multiple ways of investing to choose from, and when the economy does well, everyone wants in, leading to an influx of new investors and traders.

What's more, India's depositories saw investor accounts double from 2.12 crore in March 2020 to 4.64 crore in September 2021. In September, investor wealth rose by Rs. four lakh crores in two days, following a rise in the BSE Sensex. While this might sound like good news, it isn't. This rise leads to an alarming consequence of investors losing most of their capital in their initial investments.

Suppose you are one of those two crore people who read the news about the rise in stock market indices in 2021 and decided to invest as well. How do you ensure that you don't lose money as soon as the surge is gone? When it comes to earning from the stock market, the strategy makes all the difference.

Let's discuss some basics to keep in mind when new investors strategize for the stock market.

Setting the right goals:

It's ambitious to step into the market to benefit from its growth and overconfident to think it will happen for everyone.

The stock market offers alternatives with varying degrees of risk. To earn stably and profitably, it is essential that we first identify why we want to invest, over the how.

Once you decide the goals you are investing for, you will find it much easier to make decisions in the market.

Another thing to remember here is this - a proper investing goal can be building a corpus or a retirement fund. Even saving up for a vacation is an excellent investing goal. However, one cannot expect to earn very well if their goal is to benefit from the short-lived rises in the market.

Here is where seasoned investors strategize and win over the new ones - they know exactly where to look for their profits.

A better way to earn from the short-term growth in the market would be to focus your energy on trading over investing. However, trading requires skills and immense knowledge, due to which new investors completely ignore it and jump straight to "becoming an investor."

Get the proper knowledge:

Another trait that separates good investors from bad ones is that their basis of investing doesn't come from the news.

New investors decide to jump into the market when indices rise, but they don't recall this - each index consists of companies. Each company's value majorly depends on its performance.

To earn from the market, seasoned investors strategize to invest only in those companies which provide a long-term positive outlook. Here is where fundamental analysis steps in.

As the name goes, fundamental analysis involves checking the company's fundamentals - is the company earning profits? Will the company be able to expand and gain more in the future? If you check these factors before making any investment, you're more likely to earn more profits than any new investor.

Keeping emotions in check:

There is a very common jargon in the stock market for this - market sentiment. The attitude of investors towards a stock can drive any price to a new low or high. It can also seep into individual investors' minds, instilling fear in them when the market fluctuates.

What separates the good investors from the bad ones is this - their strategies always account for their emotions.

Fear, greed, and impatience are the three greatest destroyers of wealth in the stock market. The strategizing investor keeps their emotions in constant check and prevents impulsive decisions, lest any indecision destroys their wealth.

You mustn't be distracted by news flashes, rumors, or fears if you are a new investor. Once you have invested, stick to the facts and your position until you sense a genuine opportunity to sell and earn profits.

Transitioning from stocks to derivatives:

An investor without a strategy is like a loose cannon - with no direction and goals, you are bound to incur losses, which is the truest for those who transition from stocks to derivatives too soon.

Derivatives are the riskiest and the costliest investments; however, with the rise of easy-to-use trading platforms, many investors end up "trying out" derivatives and losing big. A derivative is a whole new ballgame - from the capital needed for any investment to the strategies required for execution, participating in derivatives trading needs immense knowledge and expertise.

As an investor with a strategy, you should not venture out to the riskiest alternatives until you have the money and the expertise to back yourself up.

Investing is the best possible venture to earn money, but only with the right strategy; as long as we have the proper knowledge, the right goals, and reasonable control of our emotions, any of us can earn and get the best of the stock market for us.

About The Writer

Simaran Sinha

Pursuing PGDM at IMT Hyderabad

An avid reader with an interest in business research, personal finance, and investing writes about the mistakes the retail investors are making in the stock market.

 
 

THE DEBT TRAP DIPLOMACY AND STRING OF PEARL

“The rich rule over the poor, and the borrower is a slave to the lender”

China is now the largest lender of credit globally, surpassing traditional lenders like the world bank, IMF and OECD!!! The Chinese Government’s claim to the rest of the world rose from $500 billion to $5 trillion in the last 20 years, accounting for 5% of the global GDP. The target countries are primarily developing countries lulled by Chinese promises of infrastructure assistance, only to have their debt grow out of control later.

The debt trap diplomacy-Chinese version: The theory of debt-trap diplomacy is that the creditor country extends excessive credit to a debtor country to extract economic or political concessions from the debtor country after the debtor country becomes unable to meet its debt repayment obligations. The Chinese version comes with clauses of confidentiality, where the credit terms are kept secret from other lenders, such as the IMF, etc. The Chinese also stress keeping the credit terms secret from the citizens in both the borrowing and the lending country, who otherwise have a legitimate right to know. A report claims that close to 42 countries in the world whose public debt exposure to China is above 10% of the nation’s GDP. These countries include Pakistan(CPEC), Sri Lanka(Hambanthota Harbour), Maldives, etc.,

The belt and Road initiative/THE TRAP: The debt trap diplomacy of China primarily revolves around the concept of its flagship infrastructure project-Belt and Road initiative (earlier called One belt One road). The Belt and Road Initiative(BRI), a Centre-piece of Xi-Jinping’s foreign policy, is an ambitious economic and commercial project that focuses on increasing connectivity and cooperation among various countries spread across the continents of Asia Africa, and Europe. Initially, it was envisioned as an ambitious project to restore the ancient silk route that dated from the 2nd century B.C. until the 14th century A.D, which stretched from Asia to the Mediterranean, traversing China, India, Persia, Arabia, Greece, and Italy. This route connected a multitude of trade posts, markets, and maritime ports, and it traded not just silk and fabrics but also essential commodities like gunpowder and paper (which eventually led to the invention of the printing press), all of which had a significant impact on the western world.

The BRI links China with other countries in lieu of ancient sea and silk routes of China with a series of latest infrastructure projects including bridges, railways, ports, energy power plants by investing trillions of dollars, resulting in win-win cooperation of participating countries along with China. But in reality, the practice is different. Now, suppose you are familiar with the mutual funds' investment advertisements. In that case, there’s a pronunciation “read investment-related documents carefully,” The Belt and Road initiative comes in place of that famous saying where the debt-trap diplomacy was terms & conditions in discreetly small letters, as the Chinese would say, “economic cooperation with Chinese Characteristics.”

For instance, in Srilanka, where the Chinese built Hambantota Port was leased to the Chinese for 99 years due to non repayment of loans to the Chinese Govt., which it had begin to Sri Lanka for construction of BRI constructions in its land. Another Glaring example of debt-trap coercion can be attributed to Pakistan, where China has planned to invest almost 60$billion for the CPEC. CPEC passes through Pakistan-Occupied Kashmir (Gilgit-Baltistan), an Indian territory illicitly occupied by Pakistan, which many have intimated as the white elephant of the century given the debt ratio to GDP of Pakistan booming out of control.

String of pearls: The BRI involves mainly all the neighbours of India such as Pakistan, Bangladesh, Sri Lanka, Myanmar, Nepal, and the Maldives, i.e., sans Pakistan, every country which has close relations with New Delhi and falls within the area of strategic significance for India which relates to the hypothesis ‘The string of Pearls.’ A string of Pearls is a strategic encirclement strategy by the Chinese to encircle India by building military infrastructure along the key points in the Indian Ocean to pressure New Delhi and check its military supremacy in the Indian ocean. The militarization of BRI cannot be ruled out since the Chinese have already begun constructing a naval facility at Gwadar Port, which Pakistan has leased to them until 2059. (The gateway to CPEC). The presence of Chinese submarines in Karachi (2014) and Colombo (2015) also indicates that militarization is imminent.

Concerns for India: The Chinese geopolitical strategy-string of pearls via debt-trap diplomacy and militarization of the Belt and Road initiative(BRI) program indicates that such a system will encircle India and threaten its power projection, trade, and territorial integrity. Significantly, the China-Pakistan Economic Corridor (CPEC), which passes through Pakistan-Occupied Kashmir (Gilgit-Baltistan), an Indian territory illicitly occupied by Pakistan, undermines India’s strategic interests and territorial integrity.

The Chinese pre-emptive moves and militarization of the BRI demonstrate that by attempting to outmanoeuvre India in the Indian Ocean, China is driving India closer to the United States and its allies. Nevertheless, few experts believe that India should not boycott the BRI and that it can be advantageous if it is economical and trade-oriented per se, with no geopolitical underpinnings that favour Chinese interests.

About The Writer

B J K Rajkumar

Pursuing PGDM at IMT, Hyderabad

A constantly evolving person writes about Sino-Indian geopolitics.

THE STRATEGY OF CARING BEAUTY: THE NYKAA STORY

 

Beauty lies in the eye of the beholder, in the same way for the Indian financial arena year 2021 rests for Initial Public Offerings (IPO). You must be wondering how these two quotes complement each other? The answer is Nykaa's IPO.

The global beauty industry has never lost its allure. Along with its steady growth, the industry has amassed a slew of devoted customers over the years. However, with the emerging technological trend and internet boom, people cannot physically visit cosmetic stores. Why should physical stores be the only option when online cosmetics stores allow customers to order products at any time and from any location?

Nykaa is one of these e-commerce platforms for beauty and wellness items, and it has quickly become the first choice for all cosmetic lovers in India. Anyone who has even the slightest interest in using beauty and wellness products has heard of Nykaa at some point in their lives. This is an e-commerce site that specializes in Beauty and cosmetic products. Since its inception in 2012, this platform has played a critical role in dispelling the myth that e-commerce and beauty retail do not perform well in India.

Nykaa's success is the epitome of the Indian startup's innovative ideas and long-term sustainability vision. A beauty and personal care product brand founded by IIM Ahmedabad graduate and former investment banker Falguni Nayar started its journey as an online store. In nine years, the brand has ventured from an online store to an omnichannel model and from Beauty and personal care products to a seller of fashion products. With more than 350 brands and 3000 products, Nykaa.com is the most significant player in the nation in its segment. Apart from its online presence, the brand has around 80 physical retail stores in 40 cities.

At the time of its IPO company has valued at $1.2 billion, and with its 4000-crore funding raising activity, the brand tried to expand its verticals by fortifying the financials. The investors will take Nykaa's shares and how it will perform in the index that time will tell us. Still, the story of the hour is how in the era of e-commerce giants Amazon and Flipkart, Nykaa came up as a dark horse and established itself as a household name in Indian Beauty and personal care products. Let us decode the strategies that make Nykaa a giant killer.

A Brand for Solution

Nykaa.Com is the one-stop online terminus for you to sit back, relax, and shop at your leisure, with free beauty advice and assistance over the phone, advice from beauty experts, the latest beauty trends, product reviews, tutorials, and celebrity looks on the Beauty Book Blog, and a fun Virtual Makeover tool. This is the uniqueness Nykaa brought in the arena; they are not there to only sell products; they care for their consumers. The brand published a magazine that provides all sorts of information about a product and its usage. It usages influencers and beauty experts to connect with its consumers directly, offer them customised solutions for their problems, and help them understand products according to their needs. This process provides them with enormous customer loyalty and brand reputation.

"Unlike Kareena Kapoor, who is promoting kajal, or Aishwarya Rai, who is promoting shampoo, these are 23–25-year-old girls of Nykaa who dress and speak as if they are customers, rather than speaking from a pedestal."

Model of Competitive Advantage

E-Commerce businesses usually function on two types of business models, the Marketplace model, and the Inventory model.

In the Marketplace Model, Customers will be able to interact with a limited number of vendors through e-commerce platforms such as Flipkart, Snapdeal, and Amazon. For example - when a person purchases a good from Flipkart, he is acquiring them from a Flipkart-registered vendor. Flipkart does not sell the goods directly. Flipkart is merely an online platform where a buyer and a vendor meet.

The inventory model of e-commerce refers to an e-commerce activity in which the e-commerce firm owns the inventory of goods and services and sells them directly to customers. This is the model that set aside Nykaa from the crowd, and the model helps them hold the secure item and allows them to avoid counterfeit items on their platform. The brand has three warehouses in Bangalore, Mumbai, and New Delhi. The model also helps brands cut costs and receive economy of scale as they can order in bulk with various BPC product manufacturers and sell them over their platform. With the model, the brand able to build up trust among the consumers due to authentic products and on time and quick delivery.

Nykaa's management also played smart by choosing the inventory model. They received the benefit of government regulation which says, "In the eCommerce industry, 100% FDI in the marketplace model of e-commerce is allowed under the automatic route. Whereas in the inventory model, no FDI is permitted, with their awareness, the brand developed a competitive advantage over foreign players and foreign investment operated brands such as Amazon and Flipkart

Adaptable and Learner

Nykaa is a virtual store that sells everything from low-cost items to high-end brands. Nykaa has only lately begun cooperating with and presenting non-Indian brands such as HUDA Beauty, Kiko Milano, Wet and Wild, and others, which is a significant accomplishment in and of itself. This has turned Nykaa into a haven for cosmetic junkies who can now get their hands on goods previously unavailable in India. Nykaa also fostered the careers of several YouTube beauty gurus, showcasing their talent and pushing their chosen career path to the best extent possible. Nykaa's community network, which is an interactive platform of product users and experts, has around 1 million subscribers and Nykaa's YouTube channel has approximately 1 billion subscribers, which showcase the brand's mastery in content marketing, every week around 40000 users join their network community without any marketing push.

Nykaa Luxe and Nykaa On Trend are two offline store formats of Nykaa's offline store. The Luxe format includes Indian and worldwide luxury beauty brands and Nykaa Beauty, the company's line of cosmetics. Products are preferred by category based on their reputation in the latter format. The brand explores 92% of the BPC market consumer segment who are not in the online space.

Nykaa's fashion e-commerce store has expanded its worldwide delivery to 13 countries as part of the multi-brand company's distribution network expansion. International customers can now shop the retailer's comprehensive multi-brand collection of Indian fashion brands and its private labels. Nykaa's distribution network includes Zariin, The Jodi Life, The Pink Elephant, Global Desi, and FKSN.

Conclusion

The brand has grown remarkably in the last three years; income has doubled. Nykaa has returned to profitability in FY20-21. This year, they made a profit of 60 crores, which is unusual for a business in its early days. Apart from its financial recklessness Nykaa has established itself as one of the most successful businesses. Thanks to its calm and steady approach, it is positioned to become one of the top beauty and wellness companies in the industry. For all its consumers, it is the epitome of trust, wellness, and care. In the word of its founder, Nykaa's as a brand wants to become a demand-led retailer, not a push retailer and the BPC market leader is aptly dedicated to her vision. 

About The Writer

Piyush Ranjan Jha

Pursuing PGDM at IMT, Hyderabad

A constant learner expresses his opinion on Nykaa.