As Walmart picked up a 77% controlling stake in India’s biggest online retailer, Flipkart, for $16 billion, the world’s largest e-commerce deal and one of the biggest cross-border acquisitions in India consummated today. The deal, a product of 20 months of negotiations, certainly calls for compliments to the people and organisations who, directly or indirectly, made it happen.

However, there is a ‘flip’ side to this. The history of big-ticket acquisitions, particularly in the Indian context, is fraught with disquiet. Several such deals, unfortunately, have ended up in defaults on delivery of perceived value, leaving investors and shareholders disgruntled. Of course, the cross-border aspect of such deals further complicates issues, since extraneous factors that may affect the merged entity are relatively unknown, especially to the buyer. This, in turn, can potentially thwart the post-merger integration process, so essential to M&A deals nowadays.

Such integration issues need to be systematically handled up to the level of sub-issues, deconstructed to an infinitesimal, granular-level. Every detail, however minute, must be addressed with the aid of a well-laid-out methodology, including in respect of operational process, technology, people, management, balancing divergent interests and stakeholders, liaison with regulators, re-defining evaluation and governance frameworks, among others. Often, deals fail on account of ‘human’ issues – behavioural, cultural, ego-related, a resistance to change, closed-mindedness, inertia of past practices, or even buyers’ disposition to either impose or bend over backwards, both approaches being detrimental in the long-run. In the first 100 days post-closing, typically, a ‘Delivering Deal Value’ (DDV) team is introduced into the acclimatization environment, which, along with an appropriate Post-Merger Integration (PMI) team (affiliated to a consulting firm) may conduct change-management workshops, and town hall meetings geared towards open communication and quick announcements.

Nevertheless, such methods may be inadequate to achieve desired results, and accordingly, have their fair share of critics and sceptics, often hailing from the internal management. In addition, post-merger costs can exceed the initial budget, sometimes substantially so (going up as high as 10% of the deal value). Finally, deals may not be successful for other reasons, including on account of unsustainability or mismatch with projected outcome.

The Walmart deal has various inherent complexities embedded in it – such as disparate operating frameworks, an unexplored new market, technological issues, etc., apart from the obvious pressure of handling the impatience and expectations of investors/shareholders. Still, being a young organization staffed with energetic minds, Flipkart likely won’t have legacy issues to deal with, and may be uniquely well-equipped to respond to dynamics and quick changes. One hopes this will be a fresh start to a bright new future.



44 (forty-four)African countries recently came together to sign an historic trade agreement to establish a liberalized market for goods and services across Africa. Thus, the African Continental Free Trade Area (the “AfCFTA”) became the world’s largest free trade area since the advent of the WTO.Estimates suggest that, subject to unanimous ratification by the 55 (fifty-five)-member African Union (AU),a population of 1.2 billion with a combined GDPin excess of $2 trillion may be integrated pursuant to the deal. However, Nigeria’s opposition to the pact, threatening to remove the region’s largest economy from the scope of the agreement, may adversely affect its prospects and future benefits.

The AfCFTA is expected to remove tariffs and import quotas, thus setting up a single continental market. Other than tariffs, though,a significant obstacle to regional trade remainsthe lack of a harmonized regime of standards and licenses. The AfCFTA will accordingly aim to lower these hurdles, although it remains to be seen whether such an outcome can be achieved with this pact alone.

Trade wars and trade agreements tend to progress simultaneously, as evidenced in Africa (mentioned above) on the one hand, and the US-EU-China standoff on the other. The rise of alternative trade deals and involvement of new regions in the mainstream global economy have created multiple trading hubs. What is evident, therefore,is both large and small corporations with foreign expansion plans must formulate a clear independent policy based on cross-disciplinary, multifactorial analyses. Such analysis cannot be restricted to merely looking at the product, or gauging entry strategies, delivery, or the vagaries of a new market alone. The entities that wish to grow internationally, setting up global value chains and inter-regional footprints for optimization as well as expansions, will increasingly need to look at evolving trade pacts, including dynamics that change every day with new arrangements and shifting alliances/hostilities. In addition, companies must develop a clear understanding of the economic and political factors that inevitably influence the movement of goods and capital in any regional hub.

Intueri Consulting LLP is currently working on a detailed analysis of the African trade agreement, as well as the present India-Africa trade situation. Our comprehensive report will be published here soon.



President Donald Trump is to impose steep tariffs on steel and aluminum. He said steel products face a 25% tariff, with 10% on aluminium goods. The value of shares in American steel manufacturers jumped significantly after the announcement.
The U.S. aluminum industry has shrunk drastically over the last 25 years, down from 23 operational smelters to five with only one of those smelters making  the high-grade stuff that the U.S. defense industry needs .

Effects On India:

  • The U.S. is the world’s largest importer of steel, significantly ahead of Germany and South Korea.
  • In 2016, the US met nearly two-thirds of its aluminium consumption from imports, and about a fourth of steel.
  • The Indian government said that India’s share of US steel imports is only 2.4%. That is true. And it is only 2% in aluminium.
  • United States of America’s imports represent 7.3% of world imports for this iron & steel, its ranking in world imports is 2.

Experts say India can be affected in two ways:

  • India may be a relatively small participant in the global export market but its exports have risen sharply in absolute terms. In April-January 2018, for instance, steel exports rose by 40.2% and India was a net exporter of steel. In aluminium, production rose between FY14 and FY17 from 1.4 million tonnes to 2.8 million tonnes, according to a Care Ratings report, but consumption rose from 1.6 million tonnes to only 1.9 million tonnes. That led to a sharp jump in exports of 57% in FY17.
  • If the US increases its output, the world is left with more metal than it anticipated. The countries exporting to the US are likely to look at other markets to sell their surplus, even at lower prices. This can lead to anti-dumping as we

Analysis From The Data:

  • India’s export in Aluminium& articles have grown by 15% between 2012-2016 in United States &India’s export in iron & steel has declined by 11% between 2012-2016.
  • Share of United States in India’s export of Aluminium is 10% &Share Of United States In India’s export in Iron & Steel is 4%.
  • So we can say Aluminium Industry Of India will be more affected by Trump’s decision of implementing tariff.

Iron & Steel Industry in India

  • In FY17 (1), crude steel production in India was 72.35 MT, with the total crude steel production growing at a CAGR of 4.90 per cent over the last 5 years & reached 89.79 MT in FY16.
  • During April-January 2017, crude steel production in India grew by 7 per cent YoY & stood at 39.98 MT.
  • As of March 2017, the capacity utilization of steel producers is set to increase with strong export demand and signs of revival in domestic sales. Companies like JSW & Essar Steel have experienced a sharp increase in steel manufacturing in the last 2 months
  • Steel manufacturing output of India is expected to increase from 88.4 million tonnes (MT) in 2017 to 128.6 MT by 2021, accelerating the country’s share of global steel production from 5.4% in 2017 to 7.7% by 2021.

Market Size:

India’s crude steel output grew 5.87 per cent year-on-year to 101.227 million tonnes (MT) in CY 2017. Crude steel production during April-December 2017 grew by 4.6 per cent year-on-year to 75.498 MT.

India’s finished steel exports rose 102.1 per cent to 8.24 MT, while imports fell by 36.6 per cent to 7.42 MT in 2016-17. Finished steel exports rose 52.9 per cent in April-December 2017 to 7.606 MT, while imports increased 10.9 per cent to 6.096 MT during the same period.
Total consumption of finished steel grew by 5.2 per cent year-on-year at 64.867 MT during April-December 2017.


The observations set forth here are influenced by the Economic Survey 2017-18 (“ES 17-18”), some of the points captured directly from there and then assessed with respect to Intueri experience, research and solutioning for corporates.

World economy or global growth as of today is buoyant and accelerating. Indian growth in first half of 2017-18 was somewhat not synchronous to global buoyancy and decoupled from that, a situation which from second half took a turn and started becoming positive but it will be essential to foster an environment that sustains this coupling as long as the world growth is on a positive trajectory. The macroeconomic factors of India as of now indicate stability but further stability need to come from more tightening of the coupling with world trends. Acceleration of global growth should therefore encourage us to boost export and India should work out policies, reforms and create environment that encourages growth. The biggest source of upside potential will be exports as quoted by ES 17-18.

In one of the sections of the ES 17-18 it is mentioned that the State(s) which have been more effective in exports have prospered more than ones which have been solely or largely focused on within-State consumption or just inter-State trade.  This is a point which should be picked up by West Bengal(“WB”) and encourage and foster an environment of  cross border growth particularly for MSME or Agri products of WB.There need to be concerted effortsamong Governments at the Centre and the State, industrialists as well as policy makers to see how the present factors such as (i) ASEAN/Far East economic conditions, (ii) growth propensity and appetite of those countries, (iii) macro situation of international trade flow and political economics compelling countries to move more into ASEAN /SAARC /Far East countries, (iv) increased activities by all countries to boost multi/bi lateral trade or investment linkages with countries there, can be leveraged by an active and practical Act East policy helping East and/or North East States’ growth to take a long stride into export market because of their geographical, cultural, ethnical proximityto these countries  and therefore consequently make Indian economy take advantage of the world trends.

World Bank in its Global Value Chain Development Report (“GVCReport 2017”) suggested that GDP is not the sole indicator to reflect real, all encompassing nature of a country’s growth but there are other measures such as Gross Value Added (“GVA”) that need to be captured and countries playing more decisive and prominent role in Global Value Chain will show more sustainable and fundamental growth even if they are not the end producer or innovator of a product. The views of ES17-18 and GVC Report 2017 synergistically stress on the point of coupling the growth of a country more to World economy and resultantly play a very meaningful role in the Global Value Chain by enhancing export potential both through improved productivity and reduction of Non Tariff Barriers (lesser cost of doing business). In light of that emerging view on upside potential through exports and/or playing an effective role in Global Value Chain and geo political situation driving ASEAN/Far East, Eastern States viz.WB will throw up increased opportunities to industry and the Government should acknowledge that and therefore endorse it through supporting eco system .

This Budget 2018-19 did not touch upon the macro factors of the country, as of now, impending threats or uptake potential from emerging opportunities  – how to couple country’s growth more to world trend, how to protect economy against more persistently increasing oil prices (IMF predicts  12 percent higher in 2018-19),  how to protect the economy from the eventualities of a  potential asset correction (stock price correction) which may lead to sudden erosion of the  foreign capital from India, thus subjecting the macro stability, which  presently India is enjoying,  to a vey stressed condition. Hence, we suggest that there has to be a more foreign expansion or trade oriented economic and international relations based policy which can protect the country from the potential two or three adverse factors mentioned above and also in the ES 17-18.

There is a possibility that consumption may suffer due to increased interest rate as an outcome of tighter monetary policy which will be needed to combat the fiscal stress arising from higher oil prices and in such a case an economy depending solely and strongly on domestic consumption may have vulnerability. Budgetary and Industrial Policy(ies) should therefore try to mitigate or hedge against that vulnerability by bringing a strong export oriented growth policy and we feel we should encourage peninsular and border states of the country having direct linkages to the Eastern world to grow in exports and in turn secure the national cover against the risk of a probable eventuality of a decline in domestic consumption.