India Economic Update
Milind S. Kothari
Managing Partner
BDO India

The Indian economy, the fifth-largest economy in the world, delivered an over-the-top performance, in this fiscal year's second quarter (July-September), beating the estimated projection of 6.5% growth. Clocking a 7.6% GDP growth, the quarter’s economic momentum was led by the core sector (eight infrastructure industries), delivering over 12% growth rates in October - majorly fueled by the government’s capital expenditure.

The high performance of the second quarter has set the pace for a robust third quarter (October-December) despite the general supposition that consumption at home and abroad will be squeezed by global monetary tightening. Further, the policy orientation may change as government-led capex momentum slows down in the run-up to next year’s general elections to be held in May 2024. Regardless of these factors that may impede growth, the central bank, the Reserve Bank of India (RBI), remains hopeful that the GDP for this fiscal year will continue to grow at 6.5%.

As India forges ahead with one of the highest growth rates among major global economies, there is a fair amount of chatter about whether India will become a developed economy by 2047. The condition for this milestone achievement is a heady 8% growth rate. The World Bank, while recognising the underlying resilience in the Indian economy, believes that to achieve this growth rate, private investment is vital, and that will happen only if policies, reforms, and regulations that make it easier and more attractive for the private sector, are in place.

Even with a healthy economic momentum, the Finance Minister, Ms Nirmala Sitharaman has an unfinished agenda of reducing India’s debt burden. To take care of this, the Government has already resorted to prudent spending by resisting the temptation of fiscal profligacy, especially after the pandemic, to avoid burdening future generations with high levels of debt. Incidentally, it was the ‘pandemic spending’ and the resultant contraction in the Indian economy that exacerbated the combined debt-to-GDP ratio of the Centre and the states to 89.2% in the fiscal year 2020-21 from the preceding (2019-2020) year’s 75.1%. Currently, the ratio stands at a high level of 81.9% that is almost similar to China’s 83%. Thankfully, India’s debt profile doesn’t face the same heightened risks as that of China’s.

The G20 summit, under India’s Presidency, which concluded in November this year, spurred several cross-border economic initiatives. One of the key measures that was also the most noticeable was the setting up of the India-Middle East Europe Economic Corridor (IMEEC), which has the potential to transform global maritime trade. In the final session of the G20 meeting, a historical consensus was forged in favour of the IMEEC in the presence of 70 countries. The proposal is acknowledged to become a catalyst for prosperity like the Silk Route was a few centuries ago. The corridor entails a slew of developmental schemes, including building next-generation mega ports, international container transhipment ports, island development, inland waterways, and expansion of multimodal hubs. The IMEEC will help reduce the cost of business by making logistics more efficient, decrease the damage to the environment, and also have the potential to create much-needed jobs for Indians. Over the next 25 years, the spectrum of investment is slated to be a staggering USD 90bn to create a handling capacity of 10,000 million metric tonnes per annum at all Indian ports.

India’s infrastructure has since long gained the reputation of being entangled in a quagmire of clearances, leading to massive delays in implementation. Two years ago, to resolve issues, Prime Minister Narendra Modi launched the ‘PM Gati Shakti National Master Plan’ for multi-modal connectivity to ensure speedy clearances and remove bottlenecks. The present performance report card indicates a significant improvement in the ease of doing business. The steps taken have significantly reduced the finalisation time for infrastructure projects, from the previous three to four months to just one month at present. The projects evaluated include over 200 state projects for improving logistic infrastructure and 156 critical infrastructure gap projects for first and last-mile connectivity. The list also covers 45 railway projects, 47 road projects, eight projects of the housing and urban affairs ministry and one project of the new and renewable energy ministry, all aggregating to USD 14bn.

The India story is not restricted to riding on a huge domestic market alone. India is shoring up to being the preferred choice for a growing number of US & European multinationals, who are considering India as a potential investment destination and an alternative to China.

India grabbed attention for its economic progress, which was evident during the one year of its presidency of the G20 nations. It definitely seems to be on course to deliver the aspirations of its billions to becoming a developed economy before 2050.


M & A Tracker
Rajesh Thakkar
Partner and Leader

M&A Tax and Regulatory

Deal Advisory Services

M&A in India

Between 30 September 2023 and 29 November 2023, around 78 M&A deals were announced of which 31 M&A deals were closed. The aggregate value of deals announced is USD 2377.99mn, dominated by 58 domestic deals (USD 1,593.45mn) and 16 cross-border deals (USD 784.54mn).

In terms of sectors (considering only closed deals), the Information Technology sector saw deals worth USD 132.5mn, followed by the Materials sector with deals worth USD 42.17mn and the Industrials sector with deals worth USD 27.83mn.

Significant deals closed between 30 September 2023 and 29 November 2023

Target Company
Sonnick Partners LLC
Acquiring Company
Mphasis Limited
Deal Value (in mn USD)
Information Technology
  • Mphasis Limited entered into a definitive agreement to acquire Sonnick Partners LLC for USD 132.5mn (INR 11.03bn) in an all-cash deal.
  • Post the transaction, Sonnick Partners LLC will operate as a subsidiary of Mphasis Limited.
  • The acquisition would strengthen Mphasis Limited’s end-to-end salesforce enterprise cloud solutions.
Target Company
Mittal Corp Limited
Acquiring Company
Shyam Metalics and Energy Limited
Deal Value (in mn USD)
  • Shyam Metalics and Energy Limited (Shyam Metalics), via its subsidiary Shyam Sel and Power Limited, acquired Mittal Corp Limited for USD 42.17mn (INR 3.51bn).
  • The acquisition marks the company’s foray into the stainless-steel sector, expanding its operations and solidifying its position as a diversified steel and power conglomerate.
  • Post the transaction, Mittal Corp Limited would operate as a subsidiary of Shyam Metalics.
Target Company
Real Gem Buildtech Private Limited
Acquiring Company
Keystone Realtors Limited
Deal Value (in mn USD)
  • Kingmaker Developers Private Limited (Kingmaker Developers), which is a wholly-owned subsidiary of Keystone Realtors Limited, entered into a share purchase agreement to acquire 100% equity shares and all preference shares from the existing shareholders of Real Gem Buildtech Private Limited (Real Gem) which is a wholly-owned subsidiary of DB Realty Limited.
  • The acquisition is made for USD 27.83mn (INR 2.31bn).
  • Post the transaction, Real Gem would operate as a subsidiary of Kingmaker Developers.

Significant deals announced between 30 September 2023 and 29 November 2023, but not closed

Target Company
Fincare Small Finance Bank Limited
Acquiring Company
AU Small Finance Bank Limited
Deal Value (in mn USD)
  • AU Small Finance Bank Limited (AU Small Finance Bank) is acquiring Fincare Small Finance Bank Limited (Fincare Small Finance Bank) for USD 528.70mn (INR 44.11bn) in an all-stock deal.
  • As part of the transaction, shareholders of Fincare Small Finance Bank will receive 579 shares in AU Small Finance Bank for every 2,000 shares they hold in Fincare Small Finance Bank.
  • According to the terms, Fincare Business Services Limited, promoter of Fincare Small Finance Bank, shall infuse INR 7bn into Fincare Small Finance Bank prior to the completion of the merger.
  • The transaction is subject to the approval of the respective shareholders of the companies, the Reserve Bank of India, and the Competition Commission of India.
  • Post the transaction, existing shareholders of Fincare Small Finance Bank shall hold a 9.9% stake in AU Small Finance Bank.
Target Company
Kotak Mahindra General Insurance Company Limited
Acquiring Company
Zurich Insurance Company Limited
Deal Value (in mn USD)
  • Zurich Insurance Company Limited entered into definitive agreements to acquire a 51% stake in Kotak General Insurance Company Limited for USD 486.48mn (INR 40.51bn).
  • As a part of the transaction, Zurich Insurance Company Limited will acquire an additional stake of 19% within three years from its initial acquisition.
  • The transaction is subject to the customary conditions precedent, including regulatory approvals from the Reserve Bank of India, the Insurance Regulatory and Development Authority of India, and the Competition Commission of India.
  • Post the transaction, Kotak General Insurance Company Limited will operate as a subsidiary of Zurich Insurance Company Limited.
Target Company
Aquapharm Chemicals Private Limited
Acquiring Company
Phillips Carbon Black Limited
Deal Value (in mn USD)
  • Phillips Carbon Black Limited entered into a share purchase agreement to acquire Aquapharm Chemicals Private Limited for USD 456.12mn (INR 38bn) in an all-cash deal.
  • The transaction will be financed through a mix of internal accruals and external funds raised by the company and/ or its affiliates/ associates.
  • The transaction is expected to be completed within 2-3 months subject to satisfactory completion of the condition’s precedent including shareholders, lenders, Competition Commission of India, and other necessary third-party approvals.
  • Post the transaction, Aquapharm Chemicals Private Limited will operate as a subsidiary of Phillips Carbon Black Limited.
Feature Story
Dipankar Ghosh

Partner and Leader Sustainability & ESG

Business Advisory Services

Enabling Sustainable Supply Chains Crucial for Meeting Net-Zero Goals

The rapid industrialisation in the past century overlooked the consequences of resource depletion, environmental damage, and social erosion. The world today has no option but to adopt innovative sustainability strategies for mitigation and adaptation, that at the minimum arrest degradation, if not reverse it to some extent.

This means making products and services more responsible, while also looking into the sustainability aspects of the processes both within the direct operational boundary as much as the supply chain. For many business sectors, often, the supply chain is responsible for a substantial share of environmental and social impacts.

With most business supply chains extending across geographies and often beyond national boundaries, their vulnerabilities are attributable to global as well as regional economic and environmental fragilities, climate change and social inequalities. Supply chain sustainability is a prominent enabler contributing towards the economic leverage of organisations by ensuring supply chain resilience against disruptions and cost fluctuations.

The conventional approach to effective supply chain management includes a focus on cost, competitiveness, quality, speed, and optimisation of inventory. A sustainable supply chain overlays a pair of environmental and societal lenses on this approach, thereby addressing sustainability issues like resource depletion, climate change, air and water pollution, deforestation, human rights violations, child labour, unethical workforce practices and corruption.

The life cycle approach for product sustainability spans from the stage of sourcing raw materials, including the energy and carbon footprint, water usage etc., to the final product ready for consumption or further reprocessing. Beyond this, the forward value chain of a product also necessitates consideration of environmental attributes of utilisation and disposal. For instance, in the case of machinery, white goods, or automobiles, it is essential to consider the energy consumption, emissions, and environmental consequences of disposal at end-of-life for a comprehensive life cycle analysis. Thus emerges the all-encompassing concept of ‘value chain sustainability’ that advocates a lighter environmental footprint across the life cycle, additionally incorporating the elements of ‘circularity’, including aspects of reusing, recycling, and upcycling of products or components.

Several cross-border initiatives for applying trade barriers based on environmental criteria, especially emission-based criteria, have been in controversy in recent times. Despite the debates around these barriers, they encourage action towards global decarbonisation and the betterment of the environment.

In the past decades, while the global and decentralised supply chain brought in economic growth in certain regions, and facilitated financial efficiency in multiple ways, inevitable energy intensity involved in the transportation of goods, and cross-border barriers are encouraging businesses to explore local sourcing, wherever practical, enabling better management of sourcing risk.

In recent times, the global decarbonisation imperative has prompted many organisations to map GHG emissions and commit to net-zero pathways. Typically, Scope 3 emissions (i.e., indirect) contribute the highest for most industry sectors in their overall emission inventory, which substantially originates from the value chain. Sustainability in the value chain thereby becomes a critical factor for organisations seriously transitioning towards a net-zero goal.

Governments globally are mandating greater supply chain sustainability; corporate actions towards the same multiply the opportunities for nations to progress towards the UN Sustainable Development Goals, which are looming large in the not-too-distant horizon of 2030. In the Indian context, the mandate from the Securities and Exchanges Board of India (SEBI) for the top listed entities, requires disclosures on value chain sustainability progressively from FY 2024-25, and independent assurance from subsequent financial years, which requires immediate preparatory steps, as information may not be easy to capture or compile without a well-defined framework.

The creation of a sustainable supply chain framework is challenging, especially for organisations where several tiers of suppliers are involved from diverse geographies. A structured approach typically involves the identification of sustainability indicators based on a materiality approach, prioritisation of suppliers, applying the sustainability filter to arrive at a progressive engagement strategy, deep engagement with critical suppliers that helps in defining the components of an effective framework, and then, well-thought-out implementation in a stepped-up manner.

Often, the initial focus lies on the first tier of suppliers, gradually extending to subsequent tiers, encouraging the previous tier to take active participation and responsibility. It is important to base the entire framework on a solid ground of ethics and transparency. The entire process requires reliance on the right metrics, robust and real-time data, information and analytics. The importance of a professional design of the overall framework and tools can never be over-emphasised, particularly considering the additional regulatory mandate of reporting.

The difficult choice for businesses will be the comparison between the short-term apparent benefits of inaction versus the long-term risk management and mitigation of unforeseen disruptions that cripple production and profitability. My conversation with business leaders on all occasions brings up the topic of resource and raw material security and cost, and how these components multiply the risk of being uncompetitive in the marketplace. In no uncertain terms, today’s CEO’s agenda therefore includes sustainability of the value chain, which incentivises comprehensive ESG outcomes and reduces vulnerability.

Guest Column
Smitha Shetty
Regional Director, APAC

Supply Chain Due Diligence: Challenges and Steps for Achieving Compliance

In the age of globalisation, supply chains are often complex, consisting of a wide range of suppliers speaking different languages, with different stakeholder concerns and a myriad of regulations and standards. Be it financial, cyber, health and safety, or ESG, supply chain risks have the potential to stop businesses in their tracks, impact profitability, undermine consumer confidence, damage brands, and deter investment.

Now, for the biggest Indian companies, with the introduction of Core Business Responsibility and Sustainability Reporting (BRSR Core), there are compliance risks too.

BRSR Core applies to India’s biggest public companies, but many other countries/ unions like the European Union, Canada and Australia have implemented similar legislations impacting Indian exporters. Embarking on a journey to improve supply chain management now, will help protect the current and future business interests.

The supply chain due diligence challenge

Even the largest, most sophisticated organisations do not find supply chain due diligence easy. In these days of streamlined organisational structures, most businesses do not have sufficient in-house procurement and sustainability resources to collect and check the data required to report with confidence.

Supply chain data may be held in unhelpful formats like spreadsheets or PDFs, in different languages, in inconsistent formats and may have many data gaps. In certain instances, it is managed locally by different procurement teams making it difficult to get a global view or the information may be out of date or from unverified sources. Suppliers may be reluctant to be transparent, meaning a lack of supplier support programme, without which important data gaps cannot be filled.

This makes it difficult to identify and manage risks or report in a way that withstands regulatory scrutiny. A lack of reliable supply chain data often holds companies back from achieving highly beneficial supply chain resilience and efficiency improvements.

Getting started with supply chain due diligence

There are several steps that companies should be taking now to be prepared for both BRSR Core submission in June 2024 and compliance with export market requirements.

The first step is to develop a due diligence policy that outlines the processes and measures an organisation can take to mitigate risks in its supply chain. The next step involves collecting information needed to assess the supply chain to identify potential risks. Once the organisation has identified where its biggest risks are, it can implement due diligence measures to mitigate those risks. This includes conducting audits, engaging with suppliers, and employing risk mitigation measures.

The Securities and Exchange Board of India (SEBI) has been very prescriptive in the reporting requirements for BRSR Core. The template covers several pages placing significant supply chain risk assessment, due diligence and reporting burden across a comprehensive set of sustainability criteria. For these reasons, many companies are choosing to work with third parties for effective supply chain data collection, verification, and due diligence processes such as supplier auditing to ensure they can meet ESG obligations and regulatory requirements and deliver supply chain efficiencies.

The complexity of global supply chains means the supply chain due diligence task is often not an easy one, but by prioritising the well-being of workers, communities, and the environment, Indian companies can achieve compliance, maximise export opportunities and play their part in building a stronger and more resilient global economy for the future.

About Achilles

Achilles supports organisations in supply chain risk management and carbon reduction and management services. Achilles offers in-depth supplier assessments, including in-person audits and worker interviews, to provide the level of supply chain transparency and confidence required by today’s most environmentally conscious and ethical organisations.

Expert Reel

As organisations around the world set sail for a sustainable future, they come across diverse and complex challenges when adding the sustainability layer to their value chains. Driven by their responsibility towards the environment and the evolving regulatory environment that requires accurate reporting, companies are now leveraging technology, innovation and expertise to create resilient, compliant and long-lasting sustainable supply chain frameworks.

In this video, Helene Li, CEO of GoImpact Capital Partners, in conversation with Matthew Sekol, Industry Advocate for Sustainability at Microsoft. highlights the importance of updating sustainability tools, the extension of compliance to vendors and clients, and why the top-down approach is crucial for companies to realise net-zero goals. 


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