Morning Brief: Zoho Plans Rs 3,000 Crore Semiconductor Unit In Odisha; RBI Likely To Hold Steady On Rates Amid US Fed Cuts; Israel-Hezbollah Conflict Escalates

Dear Reader, start your day informed with our quick roundup of key news and updates.

Zoho Group Plans Rs 3,000 Crore Semiconductor Unit In Odisha

The Zoho Group is in talks to establish a semiconductor facility in Odisha, with an investment of Rs 3,034 crore. The venture, called Silectric Semiconductor Manufacturing, was created by Zoho's directors in March 2024 and aims to set up a silicon carbide manufacturing unit in Khurdha district. The proposal has been discussed with the Odisha government for approval. This development aligns with a larger initiative, as five semiconductor units have already been approved under the Narendra Modi government's production-linked incentive scheme, totalling approximately Rs 1.5 lakh crore. Many states in India are competing to attract semiconductor investments following the central government's efforts to build a robust electronics supply chain.

RBI Likely To Hold Steady On Repo Rate Amid US Fed Cuts

The Reserve Bank of India is not expected to immediately follow the US Federal Reserve in cutting the repo rate, as its decisions are driven by domestic growth and inflation conditions. The US Fed recently lowered its benchmark lending rate by 50 basis points, its first cut in over four years. In the past, RBI Governor Shaktikanta Das has emphasised that while the RBI monitors global monetary policies, its actions are primarily based on local economic conditions. Madhavi Arora, Chief Economist at Emkay Global Financial Services, noted that the RBI has room to prioritise domestic dynamics, especially with the recent US Fed cut allowing Asian emerging markets to consider their own easing cycles. The RBI is likely to maintain a wait-and-watch stance focused on disinflation, with a potential rate cut expected by December, although an early cut remains unlikely.

Israel Launches Massive Airstrike Against Hezbollah

After delivering a tough message to Hezbollah through their own pagers, Israel has launched a massive airstrike against the Iran-backed group in Lebanon. The Israeli Defense Forces destroyed over 100 rocket launchers prepared for imminent attacks, as well as several Hezbollah buildings and a weapons depot. This operation follows Hezbollah leader Hassan Nasrallah's vow of revenge for deadly attacks that left 37 of its operatives dead and nearly 3,000 injured. Nasrallah condemned the assaults as a "massacre" and threatened severe retaliation. Meanwhile, Israeli defence minister Yoav Gallant announced that the conflict marks a "new phase in the war."

Other Developments

India Denies Report On Defense Exports To Ukraine

India has dismissed a Reuters report suggesting that defence exports, specifically artillery shells, have been diverted by European customers to Ukraine as “speculative and misleading.” The report claimed that Indian arms makers' shells have been redirected, and New Delhi has not intervened to halt this trade despite protests from Moscow. The Ministry of External Affairs stated that such claims imply violations by India that do not exist, labeling the report as “inaccurate and mischievous.” Additionally, the article cited customs data indicating that munitions transfers to Ukraine have been ongoing for over a year and noted that the Kremlin has raised concerns about this issue during meetings between Russian and Indian officials. 

India To Cuts Chip Testing Incentives

The Indian government plans to significantly reduce financial support for semiconductor assembly and testing factories, cutting fiscal aid from 50 per cent to 20 per cent for capital expenditures during construction. This shift reflects a new focus on prioritising high-value offerings within the semiconductor industry, such as display fabs and chip manufacturing.

Currently, three OSAT facilities have received approval from ISM, with two more pending state-level approvals. Experts believe that the remaining OSAT sector will evolve naturally as the government emphasises more advanced semiconductor projects.

This development comes as reports indicate that Foxconn-backed Japanese company Sharp is looking for an Indian partner to establish a display fabrication facility

EY India Denies Work Pressure In Row Over Employee's Death

Amid massive backlash, Rajiv Memani, chairman of Ernst & Young India, has denied claims that "work pressure" contributed to the death of 26-year-old employee Anna Sebastian Perayil in July. Memani emphasized that Anna, who worked at the firm for just four months, was given standard assignments like any other employee, asserting that work pressure could not have caused her tragic passing. Memani also confirmed that he responded to a letter from Anna's mother, promising support and outlining measures to improve workplace conditions. The incident gained attention after Anna's mother's letter went viral on social media, sparking widespread outrage.

NRIs Buying More Real Estate In India Than Before

Investments by non-resident Indians in the Indian real estate market have surged over the past 20 months, growing by 15-20 percent. Their share of total investments in the sector is expected to rise to 20 percent, up from 10-15 percent previously. In 2023, NRIs invested over $13 billion in real estate, and by 2025, their investments are projected to account for one-fifth of the total market. The increase in purchases is driven by optimism in the Indian economy, stricter compliance norms under RERA regulations, and capital appreciation in properties. Additionally, the rally in domestic stock markets has boosted wealth, leading many NRIs to channel funds into real estate.

From The States

Lab Report Fuels Row Over Tirupati Laddoos

Andhra CM Chandrababu Naidu has launched a scathing attack on former CM YS Jagan Mohan Reddy after a lab report revealed the presence of animal fats in the ghee used for Tirupati laddoos. The report, issued by the Centre of Analysis and Learning in Livestock and Food, indicated traces of fish oil, beef tallow, and lard in the ghee during the YSRCP's tenure, sparking an uproar in the state. Naidu expressed his outrage at a party meeting, condemning the use of substandard ingredients for the iconic prasadam. He assured the public that his government has since implemented higher quality standards for all food offerings at the temple. 

Kolkata: Doctors Announce Partial Withdrawal Of Strike

Junior doctors in West Bengal have announced a partial end to their strike, resuming essential and emergency services from Saturday. However, they will continue boycotting the Out Patient Department (OPD). The doctors have been protesting against the West Bengal government since August 9, after a junior doctor was raped and murdered. While they say some of their demands, including safety measures, have been addressed, their call for justice remains unresolved. The doctors plan to continue their movement while ending their sit-in outside Swasthya Bhawan.

10 Police Encounters In Chennai And Surroundings Since 2019

From 2019 onwards, Chennai and its surrounding areas have recorded 10 extra-judicial killings by the police, involving 14 individuals, including known criminals, according to a report by The Hindu. This follows the recent police encounter of history-sheeter 'Kakka Thoppu' Balaji, who was shot early Wednesday morning in Pulianthope while allegedly attempting to attack officers. Balaji, 45, faced numerous charges, including murder, and was categorised as an A+ rowdy with over 50 cases against him, having been detained under the Goondas Act multiple times. This marks the second police encounter since A. Arun became police commissioner on July 8 this year.

Stay tuned for more insights through the day.