February 2024

Healthy snack brands are seeing explosive growth, propelled by a surge in health-conscious consumers, further amplified by social media influencers. However, scaling these businesses beyond the niche markets while staying profitable presents a major hurdle. Peak XV Partners-backed The Whole Truth clocked 125% growth in operating revenue to Rs 36 crore in FY23, while Matrix Partners India-backed Open Secret nearly tripled its revenue to Rs 37 crore. Larger players in the segment such as ITC-backed Yoga Bar clocked 31% revenue growth to Rs 88 crore, while Tata Consumer Soulfull’s revenue grew 88% to Rs 64 crore in FY23. Marico-owned True Elements posted a 24% growth to Rs 57 crore, regulatory filings sourced from Registrar of Companies and Tofler showed. However, these brands, which sell products such as chocolate and protein bars, millets and dry fruits-based snacks, granola bars, oats, and breakfast cereal, also widened their losses during the year. “When we invested in The Whole Truth in 2019, it was just an idea, and the company was pre-revenue. We believe that awareness about what people are consuming is increasing, and that awareness levels will start influencing what people consume,” Manu Chandra, founder and managing partner at Sauce VC, a New Delhi-based early stage consumer-focussed venture capital firm, told ET. “The way it has panned out now is beyond what we had anticipated”. Chandra said consumers are becoming significantly more aware of what they are consuming, and this is a function of increasingly available information through social media. “Earlier, your source of information would be a trainer or nutritionist but now there are influencers like Andrew Huberman, Cyriac Abby Philips (The Liver Doc), Revant Himatsingka (FoodPharmer) who are household names, and they are the ones who are perpetuating awareness and it’s becoming more mainstream,” he said. Feb 08,2024 Source: Economic Times

The Delhi High Court has ordered suspension of the operations of a website “preying on the public’s religious beliefs” and deceiving them by allegedly promoting itself as the official platform for delivery of ‘prasad’ from the Pran Pratishtha ceremony at the Shri Ram Temple in Ayodhya. Justice Sanjeev Narula, while dealing with a lawsuit against the website by Khadi and Village Industries Commission (KVIC), observed that the defendant platform was functioning under the name of “Khadi Organic” which was deceptively similar to the plaintiff, a statutory body established for the promotion and development of textiles and the proprietor of “Khadi” trademarks, and directed taking down of all deceptive social media posts. “It appears that Defendants No. 1 and 2 (the individual and company behind the platform) are attempting to monopolise the consecration event by preying on the public’s religious beliefs and devotion and deceiving them into transferring money to Defendants No. 1 and 2, using the Plaintiff’s goodwill,” the court observed in an interim order passed earlier this month. “The links to the videos posted by disgruntled consumers annexed with the plaint further indicate that Defendants No. 1 and 2 have falsely obtained money from the members of the public without providing a confirmation receipt or proof of dispatch… (The authority concerned) shall suspend the operation of the domain name/ website “www.khadiorganic.com” registered by them,” the court added. The KVIC told the court that the defendant platform was offering various products such as garments, collectibles, food items, home temples, goods required to conduct religious ceremonies such as Gangajal and even seeking financial contributions to facilitate their free prasad initiative. The court was also told that as per the information hosted on the homepage of the website, members of the public desirous of obtaining the “Ram Mandirprasad” for free could place their orders by filling a form provided there and paying a charge of Rs 51 in case of Indian customers and USD 11 for foreign customers. The plaintiff argued that the defendants have no right to misappropriate its registered “Khadi” mark and render a false impression that it was affiliated with the Shri Ram Janmabhoomi Teerth Kshetra Trust, which is organising the consecration ceremony. The court opined there was a prima facie case in favour of the plaintiff, and if the ex-parte interim injunction is not granted, it would suffer an irreparable loss. The court restrained the defendants from using the “Khadi Organic” mark and issued summons on the lawsuit. Jan 22,2024 Source: Economic Times

Betul (Goa), Prime Minister Narendra Modi on Tuesday courted top oil and gas executives, showcasing opportunities the world’s fastest growing economy offers and the reforms that his government has made particularly in exploration and production. Modi met about 20 top executives of firms ranging from ExxonMobil and BP to QatarEnergy and French giant TotalEnergies, discussing energy scenarios as well as investment opportunities, sources in know of the development said. He referred to the recently launched exploration licensing round to seek global giants to invest in finding and producing oil and gas in the country. The sources said he spoke on reforms in the oil and gas sector, including a shift from purely revenue-based bidding for oil and gas areas to a exploration-focussed bidding. India is the world’s third largest energy consumer and imports 85 per cent of its needs. The government wants to increase the domestic production to cut imports. Indian CEOs attending the meeting included Vedanta Chairman Anil Agarwal as well as executives from Reliance Industries Ltd. Refusing to divulge details of the meeting, Agarwal talking to PTI said literally everybody from the oil and gas industry were there. Each CEO made a small submission and the prime minister wrapped up the discussions. “In my submission, I stated that India is the best place to invest globally. Reforms undertaken in recent years have made it attractive and global majors should come and invest in exploration and production in India,” he said. Vedanta, he said, is looking to up its investment by USD 4 billion to double oil and oil equivalent gas production to 300,000 barrels per day in 3 years. “India is the only country which has the resources as well as the demand. So whatever we produce here can be consumed here,” he said. With lower taxes and mining lease for the entire economic life of the fields, investments can flow in, he said. “We have to produce more for a self-reliant India and we have everything in place — a favourable policy climate, right regulatory environment and a supportive government,” he said. Modi has been using the IEW as well as its previous avatar the CERAWeek India to hold brainstorming meetings with global oil and gas experts and CEOs. He has held more than half a dozen such meetings. The meetings and other such feedback mechanisms had led to the government doing course corrections on some of its policies, particularly the exploration licensing policy and natural gas pricing rules. The government had, going against the industry advise, brought in a revenue sharing model for allotting oil and gas acreage. Under the 2016 policy, bidders offering the highest share of oil and gas to the government were allotted the blocks but the regime failed to attract big names to the exploration scene as companies preferred risks to be covered. Two years later, the government reversed it and went back to allocating blocks to companies that offered the largest exploration programme with a guarantee of first recovering all such cost from oil and gas found. Similarly, the 2014 policy of pricing natural gas at rates prevalent in gas exporting countries failed to enthuse any new investments, prompting it to bring in a new rate for fields in difficult areas such as deep sea. Feb 06,2024 Source: Economic Times

The Archaeological Survey of India (ASI) has provided information regarding the historical records of the Krishna Janmabhoomi temple complex in Mathura, in response to an RTI query. The ASI disclosed an excerpt from a Nov 1920 gazette, which stated that a temple of Keshavdev once stood on portions of the Katra mound. “Portions of Katra mound which are not in the possession of nazul tenants on which formerly stood a temple of Keshavdev which was dismantled and the site utilised for the mosque of Aurangzeb…” ASI stated. The RTI was filed by Ajay Pratap Singh, a resident of Mainpuri, Uttar Pradesh. Although the RTI reply did not explicitly mention the term ‘Krishna Janmabhoomi,’ it confirmed the demolition of the Keshavdev temple by the Mughal emperor, a TOI report said. The confirmation has provided encouragement to those involved in the legal battle for the removal of the Shahi Idgah mosque from the site. Advocate Mahendra Pratap Singh, president of Shri Krishna Janmabhoomi Mukti Nyas and one of the petitioners against the mosque, plans to present this significant piece of evidence to the Allahabad High Court and the Supreme Court. Singh stated that the ASI’s reply, along with the historical evidence, supports their claim that Aurangzeb issued a decree in 1670 CE to demolish the Keshavdev temple. He believes that this strengthens their demand for a survey of the Shahi Idgah mosque and excludes it from the purview of the Place of Worship Act, 1991. Recently, the Supreme Court extended the interim stay on the Allahabad High Court’s order for a court-monitored survey of the Shahi Idgah mosque complex in Mathura. The stay order will remain in effect until the first half of April. The Allahabad High Court has scheduled February 22 for the hearing of a petition concerning the viability of a lawsuit aiming to dismantle the Shahi Idgah mosque in Mathura. The suit contends that the mosque occupies 13.37 acres of land belonging to the Katra Keshav Deo temple. The court set this date as the Hindu party failed to submit its response to the challenge on the lawsuit’s viability. Feb 06,2024 Source: Economic Times

Consumer protection regulator CCPA on Tuesday said it is ready with draft guidelines specifying “dos and don’ts” to prevent coaching institutes from making “false claims” in advertisements regarding success rates of candidates. The draft guidelines will be approved and issued soon, Central Consumer Protection Authority (CCPA) Chief Commissioner and Consumer Affairs Secretary Rohit Kumar Singh told PTI. Singh, who headed the committee that prepared the draft guidelines, said several meetings were held for drafting the guidelines and the recent one was on January 8. Asserting that protection of consumer’s interest is a paramount concern for CCPA, Singh highlighted the need for clarity, specifically in addressing certain aspects related to advertisements with respect to coaching centres. “The committee observed that there is an urgent need to issue the guidelines and the draft as discussed in the (January 8) meeting should be issued at the earliest,” the CCPA said in a statement. According to the CCPA, the proposed guidelines will be applicable to all the coaching institutes, whether online or physical, and will cover all forms of advertisement regardless of form, format or medium. The draft guidelines prescribe conditions when an advertisement by a coaching institute will be construed to be a misleading advertisement under the Consumer Protection Act 2019 which inter-alia include concealing information related to the course opted by the successful candidates (whether free or paid) and duration of course, among others. As per the proposed guidelines, coaching institutes should not make false claims regarding success rates or number of selections and any other practices that may lead to consumer misunderstanding or subvert consumer autonomy and choice. Before coming up with advertisements, coaching institutes are required to follow “dos and don’ts”. For instance, coaching institute should mention requisite information along with the photo of a successful candidate. Details such as rank, type and duration of course and whether free or paid course need to be mentioned along with the photo of a successful candidate, according to the statement. Further, coaching institutes should not make claims such as ‘100 per cent selection’ or ‘100 per cent job guaranteed’ or ‘guaranteed preliminary or mains’. The font of disclaimer/disclosure/important information in the advertisement should be the same as that used in the claim/advertisement. The placement of such information should be at a prominent and visible place in the advertisement. The CCPA also clarified that the penalty for misleading advertisement by coaching sector will be governed as per Consumer Protection Act, 2019 and the guidelines are just in the nature of clarification to the stakeholders. Further, the CCPA said it had taken sou moto action against misleading advertisements by coaching institutes. In this regard, CCPA has issued notices to 31 coaching institutes for misleading advertisements and imposed fines on nine of them. The CCPA has observed that some of the coaching institutes mislead consumers by deliberately concealing important information with respect to course opted by successful candidates, duration of the course so attended and the fees paid by the candidates. Jan 09,2024 Source: Economic Times

The Life Insurance Corporation of India (LIC) was ordered by the National Consumer Disputes Redressal Commission (NCDRC) to pay Rs 1,60,812 after an 8-year-long battle with a ‘Jeevan Arogya’ insurance policy holder. LIC Jeevan Arogya is a health insurance policy that covers certain specified health risks and provides support in times of medical emergencies. The primary reason for such an extended battle between the insurance behemoth and the policyholder was because LIC officials considered the surgery the policyholder was making a claim for was a non-major one and hence paid a smaller amount. They contended that despite the policyholder incurring Rs 2,16,827 for her father’s hernia operation, she was eligible for only Rs 17,100 insurance claim. While LIC did not outrightly reject the Jeevan Arogya insurance claim, but the amount (Rs 17,100) offered to the policyholder for reimbursement of hospitalisation expenses of her father was too low since the policyholder already spent Rs 2,16,827 on various hospital bills. Disappointed with the lower claim amount, the policyholder decided to fight against LIC. The complainant after completion of treatment of her father in Chennai returned to Agartala, Tripura and submitted her claim of Rs 2,16,827 along with medical prescriptions, bills and vouchers and other proofs with a forwarding letter addressed to the Chief Manager, LIC, Agartala Branch on August 8, 2016. After receiving the documents and the forwarding letter, the manager (HI) of LIC’s Silchar divisional office asked the complainant for some information. The complainant replied to the queries on September 14, 2016. After receiving the replies, the Chief Manager of Agartala branch of LIC visited the house of the complainant on January 12, 2017. On March 27, 2017 the complainant received a letter from the manager (HI) of LIC’s Silchar Divisional Office. The letter informed her (the complainant) that that claim raised by her was reduced to Rs 17,100 as of ‘Other Surgical Benefit’ under the policy. According to the complainant, she fulfilled the terms and conditions of the policy, but in spite of that, LIC had reduced her claim on the ground that ‘ventral hernia’ surgery was not a major surgery. LIC reduced the surgery claim amount because laproscopic ‘ventral hernia’ surgery was not covered in the list of ‘Major Surgical Benefit (MSB)’. Further, LIC said that the insured ought to disclose the fact that her father was suffering from hypertension for ten years and coronary artery disease for the last six years which was within knowledge at the time of filling the proposal form. Feb 02,2024 Source: Economic Times

The Reserve Bank of India (RBI) alerted the Directorate of Enforcement (ED) a few months ago about possible money laundering and know-your-customer (KYC) violations at Paytm, and the fintech services provider may lose its payments bank licence, given infringements flagged by the banking regulator over the past few years, people familiar with the matter told ET. Additionally, the home ministry had alerted the Prime Minister’s Office about security concerns related to fund flows into and out of the entity with links to China, they said. “Concerns have been flagged to ED… There was gross violation of anti-money laundering provisions and KYC norms,” said one of the persons aware of the details. “Several crores were being transferred in between multiple accounts without any KYC; lakhs of prepaid cards were issued sans any KYC, transferring large funds.” RBI had also uncovered data breaches, with information flowing between the payments bank and One 97 Communications. In an order issued on January 31, RBI asked Paytm Payments Bank to stop all basic payment services through various platforms and technology railroads, including the Unified Payments Interface (UPI), Immediate Payment Service (IMPS), Aadhaar-Enabled Payment System (AEPS) as well as bill payment transactions, with effect from February 29. The person said flouting of norms is very serious and the entity’s banking licence could be cancelled. Unlike in the case of cooperatives, RBI cannot directly supersede a payments bank, as that would require the government’s nod. Appointing an administrator would also not solve the problem, people in the know said. “Senior Paytm officials held a meeting with the regulator in January, in which they were told what to do. The action earlier this week was taken as a warning to the company to mend its ways. If things don’t change, then harsher action could be an option,” said another person, who did not wish to be identified. RBI could not have delayed the action as it could have serious implications, the first person said. Paytm did not reply to a late evening email seeking comment. RBI also found KYC checks for hundreds of thousands of customers were missing, and some of the accounts were either owned by individuals with past issues with enforcement agencies or had abnormal balances, amounting to crores of rupees in some cases. The central bank has flagged multiple instances of a single permanent account number being used to open more than 1,000 accounts. Feb 03,2024 Source: Economic Times

India’s consumer industry is witnessing a massive transformation and is set to become the world’s third largest by 2027, only behind the US and China. The industry is currently undergoing a revolutionary change driven by several key factors such as growing young population and a burgeoning middle class, predominantly concentrated in urban hubs, who are the key stimulants of consumer demand and growing expenditure. The preferences of a tech-savvy and aspirational demographic are compelling companies to adapt, innovate and align their offerings to suit evolving demands. The expanding middle class, with higher disposable incomes, is contributing to increased spending on a wide array of goods and services that offer convenience, memorable experience, and quality. This has spurred the growth of tech-integrated retail formats and a rising demand for experiential services. Additionally, a growing awareness of health and sustainability concerns is driving a demand for healthier products, sustainable practices, and ethical sourcing. This confluence of demographic shifts, rising middle class, urbanization, digital transformation, experience economy, and health-consciousness is moulding India’s consumer industry into a dynamic and adaptive landscape. Companies that successfully navigate these trends are poised to thrive. From an investment standpoint, it is essential for the government to a) revamp FDI policies making them more attractive; b) eliminate regulatory obstacles that hinder foreign investment. FDI relaxations across products and for countries that propose to manufacture in India, would invigorate the sector, making it even more appealing to foreign investors and thereby generate more investments in the entire value chain. Furthermore, governments can be encouraged to raise awareness among small businesses and artisans, fostering public-private collaborations that take up focused research efforts. For domestic manufacturing companies, while the government has successfully implemented various PLI schemes, there is the constant need to add new sectors under the PLI purview. Focus could be on sectors having limited domestic infrastructure and excessive import dependence. Also, the businesses would appreciate an extension of the sunset date (31 March, 2024) to avail concessional rate of taxation @ 15% for new domestic manufacturing companies. Such a measure would boost domestic manufacturing and positively impact the economy. Providing relief from the inverted duty structure could further accelerate growth in the manufacturing environment. This is of utmost importance specifically for the electric vehicle (EV) industry, which has gained relevance in almost all other sectors such as automobile, transport, logistics, etc. Further, while slashing of tax rates on EVs has been a welcome step, revamping the current taxation mechanism is imminent. OEMs end up paying more tax on inputs in comparison to the output side, blocking not only initial stage costs of the OEMs, but also rigorously increasing refund compliance burden on them. Revising the tax rates on the input side can serve as an immediate relief for the stakeholders. In terms of individual taxation, measures to modify the current perquisite rules to include Kilowatts (kW) value vehicles (i.e. EVs) in addition to cubic capacity (Cc) vehicles (i.e. petrol/diesel cars), would further encourage consumers to shift to EV. Similarly in the context of easing compliance, from a transfer pricing regulation standpoint, existing safe harbors applicable to core and non-core auto component manufacturers can be expanded to cover core and non-core components for vehicles / technologies of the future such as EV, hydrogen as well. In addition, the APA program needs attention from the perspective of timing and amount of pendency. Jan 22,2024 Source: Economic Times