⚡️2022 Rewind

Welcome to the 331 subscribers who joined IndiaBuzz’s inaugural issue!⚡

As the year draws to a close, here’s a quick recap of the good, the bad, and the “I’m-not-sure” business stories that hit the headlines in 2022.

🤩 The Good

5G made its debut in October after several delays. Reliance Jio and Bharti Airtel are leading the rollout race, with the former having pledged ~$25B to launch the network across India by December 2023. Adani Data Network also made a foray into 5G, but will be focusing on enterprise use instead of the consumer space.

The RBI launched a pilot of the Central Bank Digital Currency. The digital rupee, or e-rupee (e₹-R), is a blockchain-based token representing legal tender. Users can transact with each other or with merchants through a digital wallet offered by banks and stored on mobile devices. The pilot started with Mumbai, New Delhi, Bengaluru, and Bhubaneswar, with plans to expand later.

Apple doubled down on manufacturing iPhones in India. China’s mishandling of this year’s Covid-19 outbreak significantly impacted iPhone 14 supply chains. This prompted Apple to seek alternatives, with India emerging as a prime contender. Research suggests that 18% to 20% of all iPhones will be made in India by 2025, up from 3% in 2021.

Air India flew home to the Tatas. While Talace, a subsidiary of Tata, won the ₹18,000-crore Air India bid in October 2021, shares and control were transferred to Talace in January 2022. Later, Tata announced that it was merging Vistara with Air India, creating India’s second-largest domestic carrier (behind IndiGo). The merger is expected to close by March 2024.

Open Network for Digital Commerce (ONDC) joined the e-commerce party. ONDC is a non-profit set up by the Ministry of Commerce & Industry that allows buyers and sellers to transact regardless of the platform they’re on. Users can order on an app like Paytm and the order can be fulfilled by sellers on other platforms. The government is holding trials in 85+ cities, with plans of a nationwide launch in 2023.

Akasa Air took to the skies. India’s newest budget airline commenced operations with its first flight from Mumbai to Ahmedabad on August 7. The carrier had placed a ~$9B order for 72 Boeing jets in late 2021. In the first month of operations, Akasa gained a 0.9% market share, with IndiGo leading at 57.7%, Vistara at 9.6%, Air India at 9.2%, Go First at 7.9%, SpiceJet at 7.3%, and Air Asia at 5.9%.

👿 The Bad

Indian startups were hit hard by a funding crunch. ~25,000 employees were laid off and 23 new unicorns were minted versus 44 in 2021. Startups raised $24.7B in funding between January and November, a 35% drop compared to the same period in 2021.

The Competition Commission of India fined Google ₹1,337.76 crore. And ₹936.44 crore soon thereafter. The first was for abusing its dominant position through Android; the second for doing the same on the Play Store by forcing developers to use its own in-app payment system. Google has appealed against the Android order.

Xiaomi got caught for allegedly violating foreign exchange regulations, resulting in seizure of assets worth ₹5,551 crore. The Enforcement Directorate claimed that Xiaomi was remitting the amount to three foreign entities “in the guise of royalty” without availing any services from the recipients. The case is pending before the Karnataka High Court.

Edtech did a post-pandemic U-turn. The once invincible edtech fortress came crumbling down in 2022. Globally, funding dropped to $2.43B from $4.7B in 2021, leading to 7,000+ layoffs at Indian edtech companies. Byju’s, Unacademy, upGrad, and Vedantu opened offline centres, highlighting a trend of edtech companies gradually dropping the “tech.” The silver lining was PhysicsWallah, which raised a $100M Series A at a $1.1B valuation in July.

Big-name tech IPOs slid to new lows. Paytm shares are down ~60% year-to-date, Zomato ~57%, Nykaa ~54%, Policybazaar ~52%, and Delhivery ~38%. Together, these much-hyped IPOs have lost $18B+ in value over the past 16 months.

Crypto faced its toughest year yet. The global crypto winter was felt acutely in India for several reasons. The Finance Bill, 2022, imposed a 30% tax on income from “virtual digital assets” and an additional 1% TDS for transactions exceeding ₹10,000. Trading volume at Indian exchanges dropped 34% to 50%. Coinbase halted service in India citing “informal pressure” from the RBI. And Binance parted ways with WazirX after announcing that it had never acquired the Indian exchange.

🤔 The “I’m-not-sure”

A new draft Digital Personal Data Protection Bill was released, the fourth in as many years. Data protection has been a contentious issue ever since the Supreme Court recognized privacy as a fundamental right. The current draft Bill relaxes requirements for cross-border personal data transfer and also exempts government bodies from some onerous requirements. The Bill is expected to be introduced in the Parliament during the 2023 Budget session.

Adani Group gained control of NDTV. AMG Media Network, an Adani Group subsidiary, became the majority shareholder of NDTV with a 64.71% stake, after NDTV’s founders Radhika and Prannoy Roy sold most of their shares (they’ve retained 5%). Gautam Adani claimed that the network will have editorial independence, amid concerns of the takeover being a blow to free media.

👋🏼 What’s Next

Starting tomorrow, you’ll receive a similar email (almost) every day, capturing the most important Indian business news stories. If you found this useful, please consider asking friends, colleagues, and annoying know-it-all relatives to join here.

Wishing you a wonderful New Year! 🥳