TMSEp223: US recession, 5G auction, IT earnings, China-plus-one strategy
Is India Inc seeing the impact of a looming US recession? Is the 5G auction a turning point for India? What do Q1 IT earnings tell us about the sector's health? What is the China-plus-one
Team TMS New Delhi
 "TMSEp223: US recession, 5G auction, IT earnings, China-plus-one strategy")
Clouds of recession gathering over the US skies are increasingly casting a dark shadow over its domestic consumption and imports. And the effect is also being felt about 12,000km away in India, where the export industry is bracing for harsh weather. Some exporters are already seeing a dip in new orders while the margins of the IT sector are declining. So, should the Indian exporters worry?
Meanwhile, unperturbed by these headwinds and riding high on tariff hikes, Reliance Jio logged a 24% jump in its net profit in Q1. And now, the country’s largest telecom services provider and three other operators are set to lock horns in the auction for 5G spectrum. So, will this be an aggressive battle or a muted affair? Will this be a turning point for India? Business Standard’s Nivedita Mookerji does a status check.
A status quo for India’s IT industry would have been great news. But it’s not. The June quarter results of top-tier IT companies were disappointing as the profitability margins came lower than estimated. The underperformance was led by the usual culprits of persistent attrition and high wage costs. With a US recession looming on the horizon, are there reasons to worry about the sector's health?
On Monday, Bloomberg reported that Chinese authorities had forced some of the biggest companies, including iPhone maker Foxconn to operate within a “closed loop” restricted system for seven days to battle a Covid outbreak in Shenzhen. Such unpredictable regulatory crackdowns have forced a rethink about China across the world. Such actions have wreaked havoc on the global supply chains, due to which the ‘China-plus-one’ strategy gained traction. Large companies in the West are increasingly exploring alternatives to China. This episode of the podcast talks more about this plan and why India is struggling to register its name in the list of favourite investment destinations.
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First Published: Jul 26 2022 | 8:00 AM IST
