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Road Transport Minister Nitin Gadkari on Tuesday said rapid strides in technology and green fuel will reduce the cost of electric automobiles, bringing them at par with petrol-run vehicles in the next two years.

Replying in the Lok Sabha on the Demands for Grants for Road Transport and Highways Ministry, 2022-23, Gadkari emphasised the need to shift to cost-effective indigenous fuel and hoped that this fuel will be a reality soon, bringing the pollution levels down and improving the overall situation in Delhi.

Urging MPs to adopt hydrogen technologies for transport, Gadkari asked them to take initiative in their respective districts for converting sewage water to produce green hydrogen.

Hydrogen will soon be the cheapest fuel alternative, he said.

"I can say within maximum two years, the cost of electric scooter, car, autoricksahw will be same as petrol-driven scooter, car, autorickshaw. Prices of lithium-ion battery are coming down. We are developing this chemistry of zinc-ion, aluminium-ion, sodium-ion batteries. If petrol, you are spending Rs 100, then on electric vehicle you will spend Rs 10 (for using)," Gadkari said.

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The Ministry of Petroleum and Natural Gas released its monthly production report for February 2022 today, on March 22.

As per the report, crude oil production failed to meet target while also lower in terms of year-on-year (YoY) data for the period; while natural gas production was higher in YoY terms, but still lower than the monthly target.

Further, crude oil processed during the month was lower than target, but higher YoY basis; and production of petroleum products was higher — in both target for the month and YoY numbers.

Here are the details of the report.

Crude Oil Production data for February 2022:

After weeks of worrying rhetoric, the US is sending over one of its top diplomats in an effort to calm the nerves of policymakers in New Delhi and provide an assurance that India will not face sanctions over its business and military ties to Russia, sources in the know told Moneycontrol.

US assistant secretary of state for South Asian affairs Donald Lu will be in India on Tuesday on a one-day visit. Lu’s visit gains significance against the backdrop of the Russia-Ukraine war, which has seen India and the US take opposing diplomatic stances. Incidentally, Lu is the same US official who had been in the news for saying earlier this month that India’s defence deals with Russia remain plausible ground for sanctions and that US President Joe Biden was still considering his options.

India has faced flak from US lawmakers, both Republicans and Democrats, for choosing to abstain from multiple votes at the United Nations condemning Russia’s unilateral attack on Ukraine. The Biden administration has also been irked by India’s refusal to stop trade with Russia nearly a month after the invasion began.

Speaking at the Business Roundtable’s CEO Quarterly Meeting at the White House on March 21, Biden said that while some members of the Quadrilateral Security Dialogue (Quad) like Japan and Australia have responded to Russia’s aggression strongly, India has been “somewhat shaky” on some of the issues, ANI reported.

However, multiple diplomatic sources said Lu is expected to convey to the ministry of external affairs (MEA) that the bilateral strategic partnership and business ties between the US and India trump other diplomatic positions.

“There has been a lot of mudslinging between New Delhi and Washington, DC, with politicians making unwarranted comments. The leaders have been restrained till now but they are also beholden to the political mood at home. We feel a clean break is in order at this point,” a senior US diplomat said.

Lu had told members of the US Senate Foreign Relations Subcommittee on the Near East, South Asia, Central Asia, and Counter-terrorism on March 9 that it was for Biden to decide whether to apply or waive sanctions on India. He had also stressed that while the Biden administration will fully follow and implement the Countering America’s Adversaries Through Sanctions Act (CAATSA) law, India remained an extremely important security partner of the US.

“Lu is expected to repeat the same in Delhi. However, the US has continued to ask all partners, including India, to reduce ties with Russia, while India has maintained it will take independent decisions based on national security,” an MEA official said.

CAATSA scare

Signed by President Donald Trump in 2017, CAATSA “seeks to counter Russian influence in Europe and curb Iran’s ballistic missile program and targets the rogue regime in North Korea”, according to the US Congress. While it has been a major force in diplomatic negotiations, the legislation has not been used till now against any other country.

However, the Russian invasion of Ukraine has seen calls from the US Congress to tighten CAATSA further and cut off Russia’s ability to export its weapons. Beyond this, Washington, DC, is now making sure that it becomes very hard for any country to buy major weapons systems from Russia as a result of the sanctions in place on Russian banks.

Significantly for India, CAATSA has provisions to impose economic and financial sanctions against countries that engage in significant transactions with Russia’s defence and intelligence sectors.

Enacted in response to Russia’s annexation of Crimea in 2014, and its alleged meddling in the 2016 US presidential elections, it authorises the US administration to impose sanctions on countries that purchase major defence hardware from Russia.

India has repeatedly run afoul of the rule owing to its existing deep defence ties with Russia but the US has not gone beyond the occasional rebuke, choosing to settle matters in private.

After CAATSA kicked in, India inked a $5.43-billion deal with Russia to procure four S-400 Triumf surface-to-air missile defence systems in October 2018.

The same year, it also purchased significant amounts of crude oil from Iran. However, after being prodded by the US, the government has since moved away from Iranian crude. After reaching a high of $12.3 billion worth of imports in 2018-19, the import of crude oil from Iran plummeted to $1 billion in 2019-20 and completely stopped thereafter.

With regards to Indian defence acquisitions from Russia, Lu had also told the US Congress that India had cancelled large orders of MiG-29 fighter jets, Russian helicopters and anti-tank weapons. India has, however, not officially confirmed this. “The government is studying whether the fighter jets order can be redirected to domestic players in the spirit of Make in India. No further decision has been taken,” a senior official said.

SoftBank-backed cab aggregator Ola, which was planning to list on the public markets this year, now plans to raise a new round of funding at a lower valuation, according to people familiar with the development.

The down round and delay in IPO signify a sharp reversal in fortune for startups, after a record 2021 that saw sky-high valuations in the public and private markets. This will likely be the first down round of a large Indian unicorn after the boom last year.

"It may raise $150-$200 million at a valuation of $5 Billion compared to its last round that happened at $7 Billion as its IPO plans are delayed", one of the persons cited above said.

A second source said Ola may go down this route as it was also yet to receive the $500 million loan that it raised from investors late last year.

"While the money has been wired from investors, it is sitting in an entity abroad. Ola hasn't been able to get the money transferred to India because of pending approvals from RBI. But it has already started making interest payments on this, and has paid $10 million interest so far," the person said.

While Moneycontrol could not ascertain the nature of these regulatory approvals, sources said these could be related to ECB (external commercial borrowings) and FEMA (Foreign Exchange Management Act) guidelines.

The company did not respond to queries sent on Monday.

Ola was last valued at $7.3 billion when it raised $139 million in its Series J round, led by Edelweiss PE, IIFL and Sunil Munjal-led Hero Enterprises, in what seemed like the last round of funding before its IPO. Before the $139 million, it raised $500 million from Warburg Pincus and Temasek, giving early backers Tiger and Matrix a part exit in the company.

Founder and CEO Bhavish Aggarwal had said that Ola plans to go public in the first half of 2022 at a Reuters Next conference in December last year.

Aggarwal also outlined plans to create a super app that would offer not just mobility but also loans and microinsurance. Ola has also been investing heavily in its instant grocery delivery business, Ola Dash, as it seeks to build services beyond ride-hailing, which took a hit post-pandemic. Global rival Uber, for instance, earns more from food delivery than its core rides business.

To be sure, Ola is not the only company that is pushing out its IPO due to the current market environment. Two other SoftBank-backed firms: Delhivery and Oyo have also deferred listing plans, as technology stocks in India and US have taken a beating, leading investors to wonder whether the epic bull run and a party fueled by low-interest rates may be ending.

This is also not the first time that Ola will be raising funds at a lower valuation than its previous round. In early 2017, it raised $330 million at a valuation of $3.5 Billion, compared to the $5 Billion it raised in its previous round.

The company has witnessed a spate of exits in recent months, including its Chief Financial Officer Swayam Saurabh, Chief Operating Officer Gaurav Porwal, HR head Rohit Munjal and General Counsel Sandeep Chowdhury,

Aggarwal is the founder of two unicorns- the ride-hailing business Ola and Ola Electric, which has ambitious plans to disrupt the electric two-wheeler market. It had started the deliveries of its electric scooters in December last year, a delay from its initial plans of an October delivery timeline.

While COVID-induced lockdowns battered its ride-hailing business in the last year, it has been making a recovery of late as India has opened up significantly in the last few months.

"Over the last 12 months, we have made our ride-hailing business more robust, resilient, and efficient. With a strong recovery post lockdown and shift in consumer preferences away from public transportation, we are well-positioned to capitalize on the various urban mobility needs of our customers," Bhavish Aggarwal, who is the group CEO for Ola, said in a statement in July 2021.

In September, he tweeted stating that the gross merchandise volume (GMV) for Ola crossed pre-Covid levels, adding that the recovery from the second wave of Covid19 has been three times as fast compared with the first wave.

Also Read:- Fitch hacks India's FY23 GDP growth forecast to 8.5% on higher energy prices

Fitch Ratings has cut its GDP growth forecast for India for 2022-23 by a massive 180 basis points to 8.5 percent on the back of soaring global energy prices.

 For FY22, however, the ratings agency has raised its outlook to 8.7 percent - 60 basis points above its December estimate. The hike in the FY22 GDP growth estimate comes after the Indian economy rode out the Omicron variant-led third COVID-19 wave "with little damage", Fitch noted.

The revised growth forecast for FY23 is still higher than what is expected by the Reserve Bank of India (RBI). The central bank sees India's GDP growing 7.8 percent next financial year, with the statistics ministry predicting an 8.9 percent growth for this year.

The cut in next year's growth forecast for India is part of a downward revision on a global scale, with the projection for global growth in 2022 lowered to 3.5 percent from 4.2 percent. The global economy is also seen growing at a slower rate of 2.8 percent in 2023 as against 3 percent forecast earlier.

Global inflation is back with a vengeance after an absence of at least two decades. This is starting to feel like an inflation regime-change moment," warned Brian Coulton, the chief economist at Fitch.

Global commodity prices, particularly those of energy, have been on the rise since Russia launched its assault on Ukraine late last month.

"A potentially huge global supply shock that will reduce growth and push up inflation is hitting the post-COVID-19 pandemic recovery. Russia's invasion of Ukraine and the economic sanctions on Russia that have followed have put global energy supplies at risk. Sanctions seem unlikely to be rescinded any time soon," Fitch said.

As per the latest forecasts, Fitch expects the Russian economy to shrink by 8 percent in 2022 followed by another 0.2 percent contraction in 2023.

"This forecast drop in activity is comparable to that during the country's 1998 financial crisis, and then in the global financial crisis. The sanctions-related shock looks much larger in many respects – and will certainly last longer – but high oil prices, military spending and the pre-war current account surplus could provide some cushion," Fitch said.

The agency expects global oil prices to remain elevated for a while. It has forecast an average price of $100 per barrel for 2022 - up from $70 - and $80 per barrel for 2023.

Fitch has, consequently, set the inflation estimate sharply higher. For the US, retail inflation is seen averaging 7 percent in 2022, up from 4.5 percent forecast in December. For the Eurozone, Fitch expects inflation to average 5 percent this calendar year, nearly twice that of its previous forecast of 2.6 percent.

In India, the Consumer Price Index (CPI) inflation is seen at 4.6 percent at the end of FY23 and 5 percent at the end of FY24. According to Fitch, the monetary policy normalisation by the RBI has been "very shallow" so far.

"The Reserve Bank of India has prioritised the economic recovery over tackling inflation amid a still-large output gap. We still expect the repo rate to rise to 4.75 percent by December, from 4 percent. The reverse repo rate – which has become the effective driver of money market rates since the start of the pandemic – is likely to be increased by a larger amount," Fitch said.