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Technology The game changer in Britain’s economy f you live in the UK, you cannot avoid the current Brexit discussions and how the market might be affected by a probable no-deal. Britain’s current political turmoil has resulted in the depreciation of the pound. While these are worrying trends, recent reports suggest that the wider economic outlook has improved. The economy of this country is hugely resilient, and its innovative and dynamic businesses will undoubtedly continue to create wealth. London’s business confidence has increased as domestic and export sales have recovered during the second quarter of the year. A survey of 503 London businesses, represented by size and broad industry sector has been completed by the London Chamber of Commerce and Industry as part of the ‘Capital 500’ Quarterly Economic Survey (QES). The study shows that 20% of London's businesses reported increased domestic sales over the last three months. The number of businesses that reported declining sales fell, resulting in the biggest jump in the QES index for two years. Similarly, 21% of London's export businesses saw sales increasing over the last three months. The number of businesses reporting declining sales fell, causing the related QES index to move back into positive territory. All the business confidence indicators also increased in this quarter for the first time this year. Investors have been fearful of the property market slowing down and rightly so. But it is a lucrative investment for overseas businesses which are venturing into partnerships with UK companies to establish a foothold in the market. For example, Hero Enterprise of India has formed a £500 million joint venture with Catalyst Capital, the European property investment and asset management firm, to invest in and develop £500 million worth of hotels, serviced apartments and hospitality-led projects in the UK and Ireland. The other growing sector of today’s economy is FinTech. The UK is home to many successful startups including a number of tech companies. One such success story is Starling Bank, a digital, mobile-only bank based in the UK, operating current account and business banking. There is a paradigm shift in how people conduct business today, with relationships relying on faster and efficient delivery. In this edition we have covered key topics such as Startups and FinTech, and increasing bilateral trade and investment between UK and India. These are topics that will be much talked about in the days to come.


CB Patel Publisher / Editor

Asian Voice & Gujarat Samachar 2019 - FINANCE, BANKING & INVESTMENT


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The effect of higher oil prices on the world economy EFFECT OF HIGHER OIL PRICES Rising oil prices will hurt household income and spending and it could accelerate inflation. As the world’s biggest importer of oil, China is vulnerable and many countries in Europe also rely on imported energy. For a sustained higher price to hit growth, economists say oil would need to hold above $100. It also depends on the strength or weakness of the dollar, given Crude is priced in dollars. Recent FOMC meeting expects a higher probability of interest rate cut during the next six months and this can put pressure on dollar acceleration and may push oil prices higher from current level. Analysis of Oxford Economics found that Brent at $100 per barrel by end of 2019 means the level of global gross domestic product would be 0.6 percent lower than currently projected by end -2020.

WHO WINS AND WHO LOSES FROM HIGHER OIL PRICES? According to Nomura, countries such as Saudi Arabia, Russia, Norway, Nigeria and Ecuador will be the winners. Higher oil price is big boost to energy stocks, especially producers and explorers, which get most of their revenues from selling the crude that they extract. This is because the cost of oil production or extraction remains low as companies look to lock in supply contracts at higher prices. The gap between production cost and selling price keeps on rising when oil price surges even higher, leading to fat prof-


it margins and thus a spike in company's share price. Losers will be those emerging economies nursing current account and fiscal deficits run the risk of large capital outflows and weaker currencies, which in turn would spark inflation. That will force central banks to hike interest rates even as growth slows. Nomura’s losers include Turkey, Ukraine and India.

by Ragu Dharmaratnam, ACMA CGMA

be cheaper than West Texas Crude. In the past, WTI traded at a premium to Brent. However due to the Shale Revolution in the early 2000s (in which WTI production increased) and more imports to the US from Canada, the price of WTI declined. It now usually trades at a discount to Brent. (Brent $63 and WTI $54). Today WTI is the benchmark for oil prices in the US, while the rest of the world - and nearly two-thirds of all oil contracts traded - are on Brent. This makes Brent the global benchmark.


TWO TYPES OF OIL? Readers also must be aware that there are two types of oils: Brent Crude oil and West Texas Intermediate (WTI). The major difference is that Brent Crude originates from the oil fields in the North Sea between the Shetland Islands and Norway, while West Texas Intermediate is sourced from the U.S Oil fields, primarily in Texas, Louisiana and North Dakota. Both oils are light and sweet, making them ideal for refining into gasoline.

BRENT OIL EXPENSIVE THAN WTI? There has been a trend, due to advancements in oil drilling and fracking, of West Texas Intermediate (WTI) has become cheaper than Brent Crude oil. Prior to this, Brent Crude tended to

FINANCE, BANKING & INVESTMENT - Asian Voice & Gujarat Samachar 2019

The return of the higher oil prices would coincide with the arrival of a new wave of electric car models in wealthy countries, potentially making them even more attractive. That should result in an acceleration of the sales trend of alternative fuels vehicles. There are about 114 different electric cars on sale in the UK, including pure electric cars, plug-in hybrids and hydrogen cars, according to Next Green Car, a buyers’ guide. But there are expected to be at least 41 additional models by the end of 2019, based on car makers’ announcements, Next Green Car said. Based on the graph oil prices are trending up , and as long as the current support line of $59 and long term trend line support of $54 level is not broken to the downside, there is every possibility of seeing higher prices from now on and that means motorists may see a higher diesel price than what they are paying 135p.

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Innovation The key for Energy Market THE UK RETAIL ENERGY MARKET IS GOING THROUGH A PERIOD OF MAJOR CHANGE. THERE ARE A RECORD NUMBER OF SUPPLIERS AND THE NUMBER OF NEW ENTRANTS TO THE UK RETAIL ENERGY MARKET SINCE 2017 HAS REMAINED NEAR HISTORIC HIGHS TOO. upplying energy to homes across the UK involves three key elements: making electricity through generation transporting gas and electricity and selling it to the customer. Energy companies can work in any of these different areas, and some operate in all of three of them. In 1990 the electricity and gas markets in the UK were privatised, meaning private companies ensure we have the energy we need, but it also allows customers to choose which companies supply their energy. Over the last couple of years, the rate of change in the UK retail energy market has gone under a dramatic shift as more and more customers opt for independent suppliers, turning their backs onto the Big six. Approximately one in five customers now use an independent supplier, the three primary forces driving customers to switch are the lucrative lower prices, better customer service and a variation of products. The advancement of technology has created a huge scope for distribution in the energy market. According to a report published in 2018 by KPMG, 4.72 million electricity meters have been installed by large suppliers, with some retailers offering smart meter tariffs that provide energy consumption savings to customer in exchange for installing a smart meter in their home. By 2020, the government have set energy companies a target of installing smart meters in every home in England, Scotland and Wales. The Big Six are the largest UK energy companies, who currently supply approximately 95% of British households with gas and electricity. They are the British Gas, EDF Energy,



E.ON npower, ScottishPower and Unique SSE. Now to become Amit Gudka, co-founder, Bulb selling points, the Big 5 as SSE and npower and providing a niche announce they are merging their retail service to the market, such as, smart energy supply arms to create a new metering, prepaid energy, flexible listed company, two-thirds of which will energy customers and supplying 100% be owned by SSE. renewable energy to cater for greener Whilst they may not have a legacy consumer trends are the initiatives like the Big 6, its this which is of independent suppliers offer to advantage to the new players on the consumers. retail energy market scene. By One such energy supplier that has identifying the concerns and issues of been shaking up Britain’s £54bn its customers, new entrants are able to energy market is Bulb. Founded in persuade customers to switch over by 2015 by Amit Gudka and Hayden tapping into the dissatisfaction Wood, it is the fastest - growing energy consumers have become accustomed supplier in the UK. With half a million to receiving from the Big Six. consumers in just three years, Bulb Independent suppliers now have provides members with 100% approximately 18% market share in renewable electricity. comparison to the 5% they shared in Speaking on the vast success of 2013. In the year ending June 2017, 12 Bulb, co-founder Amit Gudka said, “It’s new entrants into the market were great to see customers voting with recorded. Welcomed by energy their feet by switching to cheaper and regulators Ofgem and trade group greener suppliers like Bulb. A new Energy UK as healthy competition, generation of energy companies has until recently few have become rivals emerged that is offering a real for the Big 6. In 2018, almost 1.4 million alternative to the large incumbents”. households in the UK left the Big Six However, in a versatile rival market due to a series of price increases. like the energy retail sector, Whilst British Gas, is the UKs independent suppliers are faced with biggest suppliers, their market shore numerous of challenges to overcome. dropped significantly from 25% in At Bulb, Mr. Gudka said, “Innovation 2013, with the rest of the big six having plays a big a role in this. Smarter lost market share over the past give technology enables Bulb to have a years due to the rise of energy lean business model, which helps our suppliers and the increase in members lower their bills and reduce customers switching through their carbon emissions. We’re proud comparison services such as Selectra today to supply more than 1.3 million UK. home with affordable, green energy”.

FINANCE, BANKING & INVESTMENT - Asian Voice & Gujarat Samachar 2019

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n the U.S. pump priming through fiscal stimulus will wane and monetary policy normalisation is expected to gather momentum. Whereas, in the eastern China policy easing is anticipated as expansion slows and trade tensions hurt. The EU's economic forecast is plagued with Brexit, Italy’s budget deficit, decline in German exports and industrial output. But, amidst all this gloom, there are noticeable upward spikes in emerging markets including in African countries such as Ethiopia, Rwanda, and Ghana. But most fundamentally, India remains one of the fastest growing economies in the world. This is the global economy that our millennials have inherited from us. While they are constantly berated for being entitled and technologically spoilt. Truth is, that the baby boomers were gifted with a better economy than that it stands today. An economy that has suffered through choppy waters over the last decade and the millennials are only trying to revive it now. These millennials need to be proactively wooed to benefit from this phenomenon called the 'great wealth transfer'. This multigenerational transfer of wealth is bound to wake up any sleeping banking dinosaur. Banks and other financial service entities are expected to innovate as the next generation seek the new and the old order changeth.



From baby boomers to next generation by Tarun Ghulati, The Founder, President and Chief Executive Officer of Squared Watermelon Ltd

A PARADIGM SHIFT IN THE BANKING INDUSTRY So against this backdrop, where does the global banking industry stand? It is fair to state that banking is more robust and profitable than at any time in the last decade. According to the Banker’s Top 1000 World Banks Ranking for 2018, total assets reached $124 trillion, while return on assets (ROA) was 0.9%. Tier 1 capital ratio as a proportion of assets rose to 6.7%. The US banking industry has benefitted from policy interventions and regulations reflected in solid growth and improvement in total assets, capital levels, return on equity (ROE) and efficiency ratios. In Europe, structural deficiencies, low interest rates, lack of profitability, combined with high credit losses and a lack of transparency have created a minefield. There is an urgent need to show pan-European leadership. Whereas, Chinese banks have made big strides with the world’s four largest banks by assets being Chinese.

EVOLVE RELATIONSHIPS WITH TRANSFORMATIONAL TECHNOLOGIES Banks are looking to transform, particularly on the digital front with intervention from artificial intelligence, blockchain, and cloud space. And actively seeking collaborations is my mantra here. The idea should be to look at building strategic alliances and relationships with fintechs, Big Techs among others. The focus should continue to be the customer, building trust, easing credit and embracing digital and technological transformation. My mantra for banks will be to build genuine, long standing and

FINANCE, BANKING & INVESTMENT - Asian Voice & Gujarat Samachar 2019

sticky relationships with the next generation. Thought must be given to savings and investment of the next generation. Banks will need to dovetail their traditional offerings with digital and video mediums. The next generation of customers are increasingly becoming more involved in decisions, constantly testing the skills and performance of their banks. They have technological preferences seeking information at lightening speeds. Banks that ignore the next generation of inheritors and creators of wealth will find themselves becoming irrelevant if they don’t wake up.

THE OLD ORDER CHANGETH, YIELDING PLACE TO NEW In 2019, Wealth creation remains a key theme. The global Ultra High Net Worth Individual (UHNWI) population is forecast to increase by 22% over the next five years according to a study by Knight Frank. This will mean an additional 43,000 individuals will be worth more than $30 million by 2023. London is in a good place. It has the world’s largest UNHWI population of 4,944 individuals followed by New York in second place. And that is not all! In the next 30 years, $30 trillion of inheritance will change hands from the baby boomers to the next generation.

THE PARTY HAS JUST BEGUN Squared Watermelon Ltd has focussed primarily on the next generation. My mantra will be to hark and pay heed to the young benefactors phenomenon to avoid the feeling that someone 'took away the punch bowl' just as the party was starting.

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t wasn’t just the excesses of a number of out-of-control, unchecked traders and lenders that had earned my industry such a bad name. It was also the fact that the services banks offered were so far divorced from what customers really wanted that it was risible. Charges were apparently arbitrarily slapped on for this or that, but the service never really seemed to match the fees. Banks and bankers were so out of touch with the customer, it was little wonder everyone wanted as little as possible to do with them. Declaring enough was enough, I decided to start my own bank. A digital bank which puts the customer first and helps them to bank the way they want to, rather than how a large, anonymous bank thought they should bank. This was how Starling Bank came to life in 2014. Today, we have more than 650,000 customers and, judging by the number of new accounts opening each month, we’re answering the brief of giving people what they really want. My starting point was to make my bank a financial hub at the centre of people’s lives. It therefore made sense to take advantage of the boom in smartphone take-up. It’s the one thing we all have with us, all the time, so it’s the perfect medium to deliver a constant live stream of data right into our palms. In creating this mobile bank, I was able to immediately answer one of the biggest bugbears about traditional banking: it had always been almost impossible to



Anne Boden

know where you were at any one time thanks to the time lag for payments to be processed, or appear in accounts. If you don’t know what’s in your account, it’s easy to make costly mistakes and quickly rack up punitive overdraft fees. With Starling, it is possible to track your spending habits in real-time. Customers are notified the moment a purchase is made and payments are broken down into useful categories. With a more complete picture, you can exercise restraint where necessary and treat yourself whenever you can. Money is, therefore, there to be enjoyed. If you work hard to earn it, you should reap the rewards now and again. The development of cloud-based technology opened up all sorts of possibilities around how to develop the app. We’ve got features that enable customers to set up an account in just minutes, or quickly transfer funds to friends and family. Going on holiday? We don’t just offer fee-free spending abroad, we are also completely on top of any potential fraud thanks to location-based fraud protection. If your transaction doesn’t match your mobile location, it’ll be blocked. Our customers can step-in and block payments themselves too, perhaps to betting, or gambling, organisations, which is a handy feature for anyone who struggles with gambling. Over the past twelve months we’ve added business accounts for sole traders and some limited companies, joint accounts and young person accounts for 16 and 17 year olds, as

FINANCE, BANKING & INVESTMENT - Asian Voice & Gujarat Samachar 2019

well as Euro accounts. If you try any account and like it, you can use the Current Account Switch Service (CASS) to move direct debits and standing orders to Starling, in a process that will be completed in seven days. We’ve also opened an in-app marketplace, where we’ve partnered with a range of carefully selected apps to offer our customers loans, mortgages, insurance and savings deals. For our business customers there are relevant products such as online accounting software and gig economy insurance. Because they’re all linked into the main Starling app, customers don’t need to go through a laborious form-filling process each time they use our partners. Again, it’s all about making things easier and there are a number of other, new partners in the pipeline. Since banking should be about choice, the customer’s choice (not the bank’s), we also offer a range of ways to pay, including Apple Pay, Google Pay, Garmin Pay, Samsung Pay and FitBit Pay. You can pay via the app and by card too. Your choice: your way. Starling is rightly very proud of its technology and happy to share its API. This is why we’ve also launched a Banking-as-a-Service offer, which enables other businesses to use our payment technology to power their own products behind the scenes. I’m pretty pleased with how things have gone so far and fully believe we’re answering the initial goal of making our customers’ banking easier. There’s lot more to come too. When anyone asks me what I do today, I come right out with it; I run a bank and am very happy to say so.

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ounded in 2014 ImpactGuru.com, Piyush Jain, Co-Founder and CEO told the magazine, “It is predominantly a healthcare crowdfunding platform, our mission is to work tirelessly to ensure that no one dies due to lack of funds for their healthcare expenses.” Its partnership with the world’s largest global non-profit crowdfunding platform, GlobalGiving.org offers US and UK tax benefits to international donors donating on ImpactGuru.com towards Indian non-profits. Tax incentives are considered to be a crucial factor in encouraging philanthropy. By offering tax exceptions to US and UK donors, the partnership helps Indian NGOs and social enterprises attract more philanthropy from the Indian diaspora. The motivation behind ImpactGuru.com was out of Mr Jain and co-founder Khusboo Jain's strong passion to make a difference and save lives with the focus being on making healthcare more affordable. Recognised as the top two players in India healthcare financing, Jain says, “We had very few customers two years back. “We



Story Builder FinTech and Fundraising Piyush Jain - Co-founder and CEO of ImpactGuru.com

started pitching to investors and raised USD $0.5 million/ Rs 3.3 crores from a VC fund. We raised investment funding on live TV at India’s TV show on entrepreneurship CNBC TV18’s Young Turks business turned around.” ImpactGuru.com makes it easier for fundraisers to tell their story through AI technology, explaining the concept Mr Jain said, “By combining creativity with technology, we came up with an innovative tool on our website called the ‘story builder’ – allowing people to automatically create a well drafted fundraising appeal that is both informative and emotional to persuade potential donors.” The only crowdfunding platform to have its own story builder, users are required to answer a few questions and their fundraising appeal will be automatically drafted for them within two minutes. As India heads into becoming a digitalised country, Jain added, “We believe that the key for crowdfunding growth in India will be a very strong integration within WhatsApp for payments, so that these payments become frictionless. We will invest a lot in working on WhatsApp as it is a primary payments channel, and it is what we believe is the key to ensuring a lot more Indian people participate in this.” Its integration on WhatsApp would also make it easier for the Indian diaspora here in the UK. The organisation’s partnership with Globalgiving.org offers a number of tax benefits to UK donors. Non-profits based in India with registration under the Foreign Contribution Regulation Act 2010, allows them to scale their programs with the support of international donors by enabling them to receive US and UK tax benefits. Jain who believes in the effectiveness of FinTech said, “Our platform allows people to give money directly to individuals, with the complete transparency and visibility of how their money is being used. This is what we want to promote in order to get more people to be giving in society.” In India, 80% of its 1.3 billion population lacks health insurance, whilst the remaining 20% have an average insurance cover of Rs 5 lakhs (around £5700). Patients go into a debt poverty trap by being forced to take loans to fund expenses. Jain also believes that healthcare crowdfunding is the most disruptive solution to address these problems, “Out of pocket healthcare expenses in India, is at 61%, three times more than the global average,” he added. “The annual health expenditure for critical illness having in-patient treatment at hospitals is US$ 30 billion. Through our healthcare FinTech financing platform, we believe we can capture 10% of this market via crowdfunding. It allows people to raise money in a hassle free and quick manner without any payback liability.”

Asian Voice & Gujarat Samachar 2019 - FINANCE, BANKING & INVESTMENT


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7 Reasons why Residential Investors are choosing Commercial Property FOR OVER 35 YEARS WE HAVE BEEN ASSISTING PRIVATE INVESTORS GET ON TO THE COMMERCIAL PROPERTY LADDER, AND THE VAST MAJORITY OF THEM SHARE THE SAME INVESTMENT JOURNEY – STARTING OUT IN PROPERTY BY BUYING THEIR OWN HOMES, THEN ENTERING THE BUY-TO-LET SPHERE OFF THE BACK OF THE STEADY HOUSE PRICE GROWTH SEEN IN THE LAST FEW DECADES. FINALLY, THE MOVE INTO COMMERCIAL COMES ONCE THEY BEGIN TO APPRECIATE THE VALUE OF SIMPLER, LARGER AND ARGUABLY MORE GLAMOUROUS COMMERCIAL PROPERTIES. owever, in the last few years, most notably since the Brexit vote and punitive tax changes introduced to buy-to-let investment in 2016, smart investors have been skipping the middle step altogether, instead moving directly from home ownership to commercial property. There are 7 main reasons for this:


Historically, buy-to-let investors have accepted yields of 3 – 4% on the premise that they would enjoy capital gains, however in today’s struggling market yields of 5 – 6% on quality commercial investments can no longer be ignored.


3. MORE VALUE-ADD OPTIONS Commercial property offers many more opportunities to add value, such as through planning gain, rent reviews, lease re-gears, changing use etc. With residential you can refurb or extend a house / flat but there is normally a ceiling as to what it would be worth depending on the location.

4. LESS HEADACHE Whilst residential properties are typically let on ASTs (Assured Shorthold


When your property is let to a BlueChip tenant worth hundred of millions of pounds, you know your investment is in safe hands and often managed by a professional agent. With residential property, the quality of your tenant can vary massively and the risk of default, subletting or breach of house rules isn’t small.



Buy-to-let investors have literally been clobbered by the HMRC from all angles – higher stamp duty, no wear and tear allowance and for properties owned personally interest is no longer deductible and capital gains tax is higher. The result? An even lower net yield on residential property compared to commercial.


Tenancies) which make landlords accountable 24/7 for all repairs & renewals, commercial leases are FR&I (Fully Repairing & Insuring) which means the tenant is responsible for all maintenance & insurance. In addition, FR&I leases often include a Dilapidations clause which requires the tenant to reinstate a property to its original condition at the end of a lease – ensuring it can be re-let with minimal expense.

5. LONGER LEASES Whilst ASTs are typically 1 year, the most attractive FR&I leases are between 10 – 20 years. This offers the investor long-term security of income (against which banks will finance), removes the risk of void periods and could also have rental growth built-in via inflation-linked rent reviews.

FINANCE, BANKING & INVESTMENT - Asian Voice & Gujarat Samachar 2019

A good property portfolio must be diversified. Both residential and commercial investors can diversify via location or property size. Where commercial stands out is in the tenant & building type. If you’re not keen on Retail, try Medical, Offices or Leisure, and if you’re not bullish for the High Street, how about Neighbourhood Parades, Business Parks or Industrial Estates? But as we always say, property is not a one way bet. To fully exploit the above benefits of investing in commercial property, it takes experience and some good advisors. As many of our clients will testify, with the falling returns associated with residential investment no longer justifying the increasing hassle of managing it, commercial property investment can be a fantastic way to secure your family’s future. And if you are still not convinced, ask us to source you a mixed-use investment that offers the benefits of investing in both asset classes, minus the punitive tax treatment: A shop with a flat above!

If you have any questions, or simply want Nilesh Patel some advice on your commercial property investment, drop me a line at nilesh@prideviewgroup.com or +44 (0)208 954 0878 and visit www.prideviewgroup.com

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hese days the situation is quite different. Alternative finance providers have since flooded the market offering a range of new products and catering to the specific financial needs of UK and foreign investors. Of these, the bridging loan sector is thriving and according to an EY study is now worth over £4.3 billion. But what’s driving this increase in demand for alternative finance? And why have bridging loan companies become a popular alternative for forward-thinking investors in need of fast access to capital?


A NEW CULTURE OF LENDING Since 2008 and the credit crunch, high street banks have adopted an overly cautious approach when it comes to issuing loans, minimising their risk where possible. As such, these mainstream lenders rely on stringent application processes which makes the process of acquiring a loan time-consuming and complex. For high-net worth (HNW) individuals or sophisticated investors with their wealth tied up across various assets, this can lead to added complications. To top it all off, legislative changes introduced in the aftermath of the financial crisis have created a more restrictive regulatory environment, placing a further impediment on providers. Borrowers, particularly property investors, unable to satisfy this rigid approval process employed by banks have naturally sought out nontraditional options in the form of alternative finance. Essentially, while traditional

lenders have been closing their doors to investors, alternative finance providers have been welcoming them with open arms and this has been reflected in the increased activity in the sector. In fact, more than £4 billion of bridging loans were written in 2018 by members of the Association of Short Term Lenders (ASTL), representing an increase of 14.8% when compared with 2017 figures.

WHAT MAKES BRIDGING LOANS SO ATTRACTIVE TODAY? The aforementioned figures from the ASTL show just how popular alternative finance avenues have become borrowers in need of finance to pursue a property investment. This largely comes down to the fact that bridging has certain benefits that traditional banks simply cannot compete with. Most significant of these is the fact that alternative finance providers like bridging lenders do not follow the same rigid tick-box approach commonly employed by traditional lenders, but instead continue to adapt to the changing needs of borrowers by providing flexible finance for a whole range of purposes. What sets bridging loans apart is how they can be extensively tailored to meet the needs of individual investors. With many traditional banks exercising more caution when it comes to lending, more and more borrowers are looking towards alternative finance providers that offer more flexible

application processes and a quicker deployment of funds. Ultimately, bridging represents a fast, straightforward approach that is understandably favoured by borrowers and brokers alike. As a lender that has been around for over a decade, Market Financial Solutions, has witnessed first-hand just why borrowers and brokers are looking to the creative specialist finance solutions on offer from bridging providers.

WHAT’S NEXT FOR THE BRIDGING INDUSTRY? Although Brexit has made for an uncertain market in recent months, UK property remains a fundamentally sound investment. As well as the historically strong market around London, new investment opportunities are increasingly arising across the North of England and Midlands in cities like Birmingham, Newcastle and Liverpool. This makes for an exciting time for us in the bridging industry. Opportunities abound, signs are encouraging and investors are becoming more aware and enthusiastic about the benefits that bridging provides. Bridging isn’t just an option when investors find traditional avenues to finance blocked; it also represents a legitimate means of securing fast, finance in a straightforward manner. This makes it a viable alternative for borrowers and their brokers seeking to consolidate and expand their property portfolio.

Asian Voice & Gujarat Samachar 2019 - FINANCE, BANKING & INVESTMENT


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Solving a real need A RECENT REPORT HAS REVEALED THAT MORE THAN A THIRD OF EUROPE'S FASTEST-GROWING TECH COMPANIES ARE NOW BASED IN BRITAIN, FOLLOWING $35BN (£27BN) OF INVESTMENT IN THE BRITISH TECH SECTOR BETWEEN 2013 AND 2018. THE DATA WHICH IS REPORTEDLY COMPILED BY TECHNOLOGY ENTREPRENEURS' NETWORK TECH NATION AND CORPORATE INTELLIGENCE FIRM DEALROOM REVEALS THAT BRITAIN HAS CREATED MORE BILLION DOLLAR TECH COMPANIES THAN ANY OTHER COUNTRY, BESIDES THE US AND CHINA. hrough a combination of access to investors, accelerators and incubators, as well as high technological skills, Britain has reportedly become a hotspot for entrepreneurs, using new innovations to its maximum potentials, to make lives easier. Despite uncertainties of Brexit, the investments in this sector has already broken records. Data Commons for UK Tech, a new start up database, shows that by June, investments into the sector has reached $5bn already. That’s more than half of the $8.8bn raised in total in 2018. London now leads digital growth across Europe, with 45 unicorns based in the city, including 18 FinTech firms, such as Monzo, Revolut and OakNorth. A unicorn is a privately held startup company, which is valued at over $1 billion. Since the start of 2019, companies such as Starling Bank, Deliveroo and Ovo Energy have also confirmed their unicorn status. Cities like Cambridge, Oxford, Manchester, Leeds, Bristol and Edinburgh are also home to at least two tech unicorns now. The Queen of Start-ups, Bindi Karia has most recently been recognised as one of the Top 100 women in tech 2019. An undying passion for everything start-up and tech, she has an inimitable background, having previously worked as a consultant for PwC, Corporate (Microsoft BizSpark/Ventures, Silicon Valley



Bank), start-up employee (Trayport) and as an advisor (Start-up Europe, TechStars StartupWeekend, Tech London Advocates, European Innovation Council, WEF) to name a few. In 2016, Bindi set up her company Bindi Ventures, where she immersed her experience and excellence as a start-up expert, focusing on advising and connecting corporates, start-ups, venture capitalists and government. Born into a family where entrepreneurship runs in the blood, Bindi, who is of an Indian background, and raised in UK, Canada and Kenya, always had her ambitions set in place. It is her resilience and sheer persistence that has seen her overcome trials and tribulations. From being directly involved with tech and to seeing it grow since the discovery of the great world wide web, Bindi is well-aware of the many vices of technology, and believes what technology is used for and how it is used ultimately determines the ethics of it. She said, “I wouldn’t be in technology, if I didn’t think it had the power to change the world. There’s a fear amongst many on artificial intelligence stealing jobs, but what society needs to realise is that it is more of re-skilling, humans will always be part of the workplace”. This year’s London Tech Week saw more than 200,000 people attending, with over 200 international delegates

FINANCE, BANKING & INVESTMENT - Asian Voice & Gujarat Samachar 2019

Bindi Karia

and 300+ events. For Bindi it was a real eye opener for the city she calls home, becoming world class in both the tech and ecosystem community. “There was everything for everyone, when I look back at the first ever tech event to now it is much bigger in scale with more subject matter expertise.” One of the key points at tech week was inclusivity with a focus on the lack of women in tech. In the UK, 17% of women are in the industry with only 5% in top leader positions, but the conversations on the visible lack of female presence in the world of tech a few years ago was non-existent. Bindi added, “The fact that there is finally awareness is key and it’s the beginning of change. I often get emails from people in the industry asking for my recommendations when they are looking to recruit women.” A women true to her word, Bindi stresses on the importance of sisterhood and sits on advisory boards of various female founded businesses. Her excellence within the world of technology has been widely recognised, from being honoured with titles such as 100 most influential women in Computer Weekly and amongst the list of women in FinTech power-list top 100. Humble in her accomplishments, Bindi a self-made woman who advises those entering entrepreneurship to be persistent, emphasises that, “make sure you’re solving a real need.”

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Asian Voice & Gujarat Samachar 2019 - FINANCE, BANKING & INVESTMENT


16-Socialism.qxp_A4 Temp 01/07/2019 08:32 Page 16

Reducing inequality through increased taxation THE DEBATE FOCUSSING ON TAXATION AND INEQUALITY IS SPARKED OFF ONCE AGAIN. THIS TIME WITH A REPORT WHICH CONTESTS THAT THE UK'S TAX SYSTEM HELPS REDUCE THE COUNTRY'S INEQUALITY PROBLEM WHILE BENEFITS STILL DO MOST OF THE HEAVY LIFTING. he report released by the Institute for Fiscal Studies (IFS) finds that taxes also re-distribute from rich to poor with 20% of earners recording an income 12 times that of the bottom 20% before both taxes and benefits take effect. But would increasing tax resolve growing inequality at a time when the UK is ranked as the 5th most unequal country in Europe?


BRAIN DRAIN “In my view, increasing tax indirectly curbs inequality. But higher the tax rate is in the country, 'brain drain' is likelier. “That doesn't help the economy because people will continue to invest in the country but from the outside,” said Kiran Patel, BA(Hons) FCA, Director, Albury Associates. Half a decade ago business leaders had warned of the increasing number of “professionals” leaving the UK to more tax favourable countries such as Australia, and Canada. Economists have warned that tax rates


in the UK are among the highest in the world. According to a report by the Adam Smith Institute in 2011 income tax rates had risen above those of France, damaging the UK’s competitiveness and stifling growth. However, IFS's recent findings were hailed by the shadow chancellor, John McDonell when recently he had commented that “the government was wrong to plan tax cuts”. Last year, Chancellor Philip Hammond had delivered a tax bonanza where the 40% tax brand began from £50,000 as opposed to £46,350 earlier. “The IFS has confirmed the importance of taxation and social security in creating a fairer society,” said McDonnell in a statement to The Guardian. The report funded by the Economic and Social Research Council contradicted a previous report published by the Office for National Statistics (ONS) which concluded that taxes make a “negligible” difference to reduce inequality. But Brexit additionally has been a key factor in rising inequality with reports indicating that the Brexit vote has damaged average household incomes with a sharp decline in the value of the Pound. Today, more than a fifth of the population lives on incomes below the poverty line and reports suggest

FINANCE, BANKING & INVESTMENT - Asian Voice & Gujarat Samachar 2019

an increasing use of food banks. But, the IFS report has also drawn criticism where some economists have argued that the study is a survey of individuals as opposed to that of the households as they are the measuring unit for income and expenditure. “It is inequality among households that matters and the tax system is more or less flat across deciles of households,” asked David Byrne, Emeritus professor of applied social sciences, Durham University.

SOCIALISM FOR THE RICH? Meanwhile, in his latest bid to become the UK's next Prime Minister, Boris Johnson has announced tax cuts higher earners in the UK. Johnson has proposed to increase the higher-rate income tax at which earnings are taxed at 40% from its current level of £50,000 to £80,000. This has drawn increased criticism from economists who fear that it would further increase the existing divide between the country's rich and the poor. However, Patel is of a contradictory opinion and arguing for a more equitable tax distribution system, he said“I don't think that it is socialism for the rich. Instead, I think it is a positive move. With increased income there is increased spending and investment opportunities which revives the market with greater liquidity,” said Patel. Following the heavy dependence on the gig economy, a chaotic Brexit vote that has resulted in a depreciated pound and stagnant pay structures, the UK appears to be at the risk of following the US in the rising inequality index. Could UK’s tax system save the day? Only time will tell!

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Jinit Shah

Making Pensions count

SMALL SELF-ADMINISTERED SCHEME (SSAS) IF YOU ARE RUNNING YOUR OWN BUSINESS OR A COMPANY, CONTRIBUTING INTO A PENSION CAN BRING YOU SIGNIFICANT TAX ADVANTAGES. PENSION CONTRIBUTIONS CAN BE TREATED AS AN ALLOWABLE BUSINESS EXPENSES WHICH CAN BE OFFSET AGAINST YOUR COMPANY’S CORPORATION TAX BILL – SUBJECT TO LIMITS AND RULES ON PENSIONS. ften overlooked, but for those owner managed businesses whether you are limited company or partnership you can have a Small Self-Administered Scheme (SSAS) pension scheme. Usually for 12 members or less, this type of pension is a neat structure and is an asset that can be passed on without any liability to Inheritance Tax (IHT), therefore kept within your family across generations. A SSAS provides a means of pension saving that runs alongside your company and allows for all the investment decisions to be made by the business owners. By using the funds in your SSAS, you can purchase commercial properties which can then be leased back either to your own business or to a third party. Your SSAS can then rent back to you your own commercial property with the rent payable treated as business expense. On the other side, the rent received by your SSAS would not be taxed. What a win-win situation to find yourselves in!



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REDUCING LIABILITY TO INCOME TAX, CORPORATION TAX AND INHERITANCE TAX Pensions are efficient investment vehicles, as it is important for all tax payers to reduce their tax liability, and accumulate wealth without the worry of any income or capital gains tax. To encourage people to contribute more into their pensions, the Government gives tax relief on what you contribute. Effectively, you get tax relief at your highest marginal rate of income tax. Much has changed since the Pension freedoms were introduced in April 2015. Firstly, you don’t have to buy an annuity, which is an income in retirement. You now have the ability for much more flexible approach when it comes to your income. You can take has much or as little income you may need. Furthermore, on

death, pension funds may be left to your family without liability to Inheritance Tax. Building a retirement fund for the future can have a number of challenges but we are confident that we can help you find the right solution. Lately we have had a great deal of success in combining Pensions and Individual Savings Account (ISAs) to provide an excellent solution for income in retirement. Finally, whether you are employed, self-employed or running your own limited company, at Crystal Financial Solutions we have highly experienced advisers who can help you build the right solution. Please contact Jinit Shah on 0208 901 3737 now.

To recap: The funds in the SSAS scheme can be used to purchase a commercial property Rental income paid into your SSAS can be offset as a business expense The rent received by a SSAS is totally tax-free Your SSAS remains outside your estate for Inheritance Tax Great for future business planning Asian Voice & Gujarat Samachar 2019 - FINANCE, BANKING & INVESTMENT


18 Kiran Patel.qxp_A4 Temp 01/07/2019 10:49 Page 18



Kiran D Patel BA(Hons) FCA, Director, Albury Associates - Chartered Accountants

he scope of UK Capital Gains Tax on non-residents has also been extended to include all UK real estate property as well as to include assets deriving at least 75% of their value from UK land. In addition, the reporting and payment of capital gains tax is changing for all UK residential property disposals with effect from April 2020. Traditionally, Capital Gains Tax has been a territorial tax. UK tax residents have always been subject to Capital Gains Tax on the disposal of their worldwide assets, whereas nonresident have only been subject to UK Capital Gains Tax on UK residential property which has been further restricted by applying to gains that have arisen since 6 April 2015. Based on the conclusion of a Consultation Document published by the Government, with effect from 6 April 2019, the scope of the UK Capital Gains Tax was substantially broadened for non-residents to include the following: l The sale of any real estate located in the UK, not just residential properties. This has now brought commercial properties into the regime. l Disposal of shares in companies deriving at least 75% of their value from UK land (The name given to the case companies is “UK property-rich entities”), where the owner has had a substantial holding (25% or more) at



any time in the two years immediately preceding the sale of the shares. l With regards to UK property rich entities, an exemption does exist whereby the property, or most of the property, has been used for trading purposes. In this instance, Capital Gains Tax will not necessarily apply. Furthermore, HMRC will only be able to apply the UK Capital Gains Tax on the disposal of the shares if the tax treaty with the owner’s country of residence gives taxing rights to the UK for this type of transaction.

VALUATION OF PROPERTY FOR TAX PURPOSES In calculating the non-resident Capital Gains Tax chargeable On disposals, the basis of valuation of the property is an important factor, as it will result in certain gains falling out of the equation. For UK residential property, the rules were changed in April 2015 whereby disposals were calculated on the basis of the valuation with effect from April 2015 paying the starting point. Games after that date were subject to Non-Resident Capital Gains Tax. As far as non-residential property and UK property rich entities are concerned, similar rebasing rules have been introduced, but they take effect from April 2019. In practice, this means that a non-resident individual owning a non-residential property in the UK, or shares in a UK property rich entity will only need to calculate the gain with effect from April 2019 on any disposals.

FINANCE, BANKING & INVESTMENT - Asian Voice & Gujarat Samachar 2019

CHANGES TO THE REPORTING PERIOD Currently, Non-Resident Capital Gains Tax disposals need to be reported to HMRC within 30 days of the date of disposal. The Capital Gains Tax also needs to be paid within 30 days. Going forward, the spaces will apply to all chargeable disposals by non-UK resident taxpayers with effect from 6 April 2019. At present, there is an exemption available from the payment of the Capital Gains Tax 30 days of disposal, when the taxpayer is already in the UK Self-Assessment system and is claiming to pay tax through the normal self-assessment tax return. Unfortunately, this option to delay payment will be withdrawn from 6 April 2020, due to the fact that all disposals of UK residential properties, including disposals by UK residents, will be brought within the system. With effect from 6 April 2020, all disposals subject to Capital Gains Tax will need to be reported to HMRC and a payment on account made further tax due, within 30 days of the date of the completion of the sale.

THE FINAL MESSAGE Going forward, substantial cash flow disadvantages will exist and substantial penalties will be charged for the late payment of Capital Gains Tax on disposal of property in the UK. Forward planning will enable the avoidance of penalties as a strict regime comes into place.

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Asian Voice & Gujarat Samachar 2019 - FINANCE, BANKING & INVESTMENT


20-21 Start-up Hubx2.qxp_A4 Temp 01/07/2019 08:33 Page 20

THE WORLD HAS BEEN WITNESSING A STEADFAST RISE IN THE NUMBER OF START-UPS. THE IDEA OF LAUNCHING AND SCALING UP ONE’S OWN BUSINESS WHILST ATTEMPTING TO OUTBID AND SURVIVE IN A COMPETITIVE MARKET IS EXHILARATING, ANTICIPATIVE, AND EXCITING TO SAY THE LEAST. INTERESTINGLY AGAINST ALL SUCH ODDS, COUNTRIES ACROSS THE WORLD HAVE WITNESSED AN UPSURGE OF VARIED START-UPS IN MANY CITIES, CREATING THE NEW SET OF ENTREPRENEURS AND LURING THE SPOTLIGHT AWAY FROM EMPLOYMENT IN THE MAINSTREAM CORPORATE FIRMS. hile the global market is constantly fluctuating in light of the changing political landscape across the world, it is important that entrepreneurs looking to launch their start-ups be well aware of the fact that they do so in the places where they can earn the greatest returns. In this connection, the emergence of start-up hubs assumes importance. Start-up hubs are physical places that provide ideal conditions for entrepreneurs to flourish and accelerate the growth of their businesses. Most major cities are embracing the start-up hub culture as a method of helping the entrepreneurs for their pursuit of creating wealth and developing new technology embedded products and services. A start-up ecosystem is formed by people from the start-ups in their various stages and types of organizations in a location (physical and/or virtual), interacting as a system to mutually benefit the new startup companies. These organisations can be further categorised into: universities, funding organisations, infrastructural support (like incubators, accelerators, co-working spaces etc.), research organisations, service providers (like legal, financial services etc.) and large corporations for their early adoption of the start-ups.

Start-up Hub

A New Approach to Entrepreneurial Ecosystem


INTERNATIONAL EXPERIENCES As per CEO World Magazine’s ‘most start-up friendly country in the world’ rankings, an annual assessment of a


Lakshmi Kaul, Head & Representative – UK Confederation of Indian Industry (CII)

country’s competitiveness and capabilities in a ‘scientific and technologically focused’ economy, United States stood first. Magazine’s Start-up Ecosystem Ranking ranks 62 countries across five categories: human capital investment; research and development; entrepreneurial infrastructure; technical workforce; and policy dynamics. The top ten countries overall in the order of ranking are the United States, the United Kingdom, Canada, Israel,

FINANCE, BANKING & INVESTMENT - Asian Voice & Gujarat Samachar 2019

India, Germany, Poland, Malaysia, Sweden, and Denmark. The United States secured its top spot for a number of reasons, its research and development (R&D) capacity is the key among them. America’s strengths include a very high rate of start-ups, robust angel and venture funding. It is important to note that the US gets such high marks for ‘building its knowledge economy’ for being home to 119 institutions among the top 500 universities in the world for 2019 with the Massachusetts Institute of Technology (MIT) as the topmost school in

the world. Start-up ecosystems can be found in a wide range of locations, and the number of such hubs has been increasing faster than ever before. StartupBlink Ecosystem Ranking Report ranks more than 1000 cities and 100 countries all around the globe. While collecting and analyzing the data for the Ecosystem Ranking Report, some interesting patterns were

20-21 Start-up Hubx2.qxp_A4 Temp 01/07/2019 08:33 Page 21

observed as listed below: l It was observed that the first 3 places are taken by English speaking countries, including the USA, UK, and Canada. English has been the language of business for years now, and successful start-ups are focusing on the global market. This strong link between the English language and the success of a start-up ecosystem should be taken into consideration. l Another surprising insight is that relatively tiny countries (less than 10 million inhabitants) are doing well in placing themselves amongst global leaders. Despite a smaller population, countries such as Israel (4th), Sweden (7th), Denmark (16th), Switzerland (8th), Estonia (13th), and Finland (12th) are all in the top 20. This shows that hubs can be successful even in relatively small nations. l Also, countries tend to create and distribute hubs in multiple cities instead of having only one active city. This way people working with start-ups have an opportunity to operate in their homeland without the necessity of moving to another national hub or even another country.

INDIAN SCENARIO Start-up India has been a flagship initiative of the Government of India, intended to build a strong eco-system for nurturing innovation and start-ups in the country that will drive sustainable economic growth and generate large scale employment opportunities. The Government through this initiative aims to empower start-ups to grow through technology innovation and design. In order to meet the objectives of the initiative, Government of India announced the Action Plan that addresses all aspects of the start-up ecosystem in January 2016. With this Action Plan, the Government hopes to accelerate spreading of the start-up movement. The Action Plan is based on the following three pillars: l Simplification and Handholding: Easier compliance, easier exit process for the failed start-ups, legal support, fast tracking of patent applications and a website to reduce information asymmetry. l Funding Support and Incentives: Exemptions on Income Tax and Capital Gains Tax for eligible start-ups; a ‘fund of funds’ to infuse more capital into the start-up ecosystem and a credit guarantee scheme.


Industry-Academia Partnership and Incubation: Creation of numerous incubators and innovation labs, events, competitions and grants. Govt. of India has also launched the Start-up India Portal, one of the programmes mandated under the Start-up India Initiative. It is the single largest online platform for start-ups and entrepreneurs in India, connecting them to tens of thousands of other start-ups, as well as other key stakeholders such as investors, mentors and incubators. The portal aims to reduce knowledge asymmetry in the start-up ecosystem and better equip entrepreneurs for success by providing them with essential information and valuable online resources. As a result of Govt. of India’s Startup initiative, 22 states in the country have come out with Startup Policies for respective states with dedicated websites to help startups. Also, under the Atal Innovation Mission, Government is setting up Atal Incubation Centres (AICs) in public and private sectors as well as scaling up Established Incubation Centres (EICs) across the country. As a consequence, several states viz. UP, Himachal, Gujarat, Telangana, Andhra Pradesh, Karnataka, Madhya Pradesh, Goa etc. have supported setting up of incubators. The Indian start-up ecosystem has grown tremendously over the past year going by the indicators such as number of new start-ups & investors and quantum of funding in the country. According to data released by StartupBlink, India moved up to 17th position in 2018 from 37th spot last year in the Start-up Ecosystem Ranking for 2019, as the World Bank dramatically upgrades its ‘Doing Business’ score, supported by a growing entrepreneurial spirit throughout the country as per the report. The report has taken the startup ecosystems of 1,000 cities and 100 countries into consideration. The cities with the most vibrant start-up ecosystems in India are Bengaluru, New Delhi and Mumbai as mentioned

in the report about the Indian ecosystem. The rise in India’s rank can be attributed to a number of factors besides the ones stated by StartupBlink. According to Inc42 DataLabs, 3800 new start-ups were launched in India during the last year. Overall, Indian start-ups received $11 Billion of funding through 743 deals in 2018. The sectors which received the most funding were: e-commerce; consumer services (hyperlocal) and fintech. The biggest round of funding in 2018 was of Swiggy’s Series H, wherein the food delivery service received a staggering $1 Billion in funding. In StartupBlink’s cities ranking, six Indian entries made it to top 100. Bengaluru was the top start-up city in India ranked at 11th globally, while New Delhi followed in the 18th spot. Mumbai stood at 29th rank, while Chennai, Hyderabad and Pune also made it to top 100. According to Inc42’s ‘the state of the Indian start-up ecosystem report’, Bengaluru, Delhi-NCR and Mumbai had 11,000, 8500 and 9,000 start-ups respectively. Among the leading cities, start-ups in Bengaluru received $4.7 Billion, while those in Delhi-NCR received a funding of $4.4 Billion, followed by those in Mumbai which received a funding of $914 Million in 2018. While talking about the growth obstacles in the Indian start-up ecosystem, the StartupBlink report mentioned about the major challenges such as improving the overall quality of start-ups, and increasing the number of unicorns from the current level. Finally, it could be summarised that the following factors play a significant role in developing a conducive start-up ecosystem: l Research and Development (R&D) capabilities in the country l High rate of start-ups, robust angel and venture funding l Building knowledge economy l Distribution of hubs in multiple cities While India’s ranking has improved substantially over the years, in order to sustain the momentum, India will have to strengthen quality of education at all levels thus directly impacting the quality of start-ups.

Asian Voice & Gujarat Samachar 2019 - FINANCE, BANKING & INVESTMENT


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ruly living up to the brands’ name, this year Missy Empire earned the number one spot on The Sunday Times SME Export Track 100. Found in 2015, it has become a global fashion icon, now. Based in Manchester the hub of emerging ecommerce brands, Missy Empire's recent investment provided by HSBC is set to create 30 more jobs, as it moves into a larger 30,000 sq ft warehouse. “We chose the name Missy Empire, because that’s what we wanted to build our brand into,” says Ash Siddique, managing director of Missy Empire. Their journey into entrepreneurship and creating one of the most renowned fashion brands, began when brothers Ash and Ish Siddique worked as manufactures for their father’s company. Learning not just the tricks of the trade but having been exposed and grown with fashion as it evolved, the brothers immersed their knowledge and experience into building Missy Empire. “We were very wrapped up with trends that emerged when we were manufacturing garments. With Missy Empire, innovation is what we bring to the market, with influencers joining in. It’s not just about selling clothes, but educating the Missy Girl on how to wear trends, how to re-work styles with clothes in their wardrobes. So, it’s not just throw-away fashion,” says Ash Siddique. More than just trends and fashion, Missy Empire since its birth is all about


De-coding Entrepreneurship empowering and recognising females. This year Missy Empire conducted research identifying the Top 30 Female entrepreneurs to watch out for in 2019. “Female entrepreneurs are so important, and they need to be talked about. I’m a father of four girls, and I want to make sure that my girls feel just as strong as men, that they can achieve anything they want to regardless of race or religion, which shouldn’t stop you from pursuing any ambition you have,” says Ash Siddique. The Siddique Brothers have much to be proud of, but their journey hasn’t been one without challenges. It goes without saying that the journey of an entrepreneur is a treacherous path, filled with numerous difficulties. So, then what does it take to keep going through the ups and downs of entrepreneurship? It is perseverance. Their second year in business, 2016 for Missy Empire was as Ash says its toughest year “It could have been a time where we could have walked away, but our dad taught us to never give up”. For the Siddique Brothers, when the going gets tough, the tough get going “You’d be surprised what you can achieve through perseverance and building a team of passionate people for us giving up means failure,” says Ash. Determination and hardwork are the skills you need to be a successful entrepreneur believes Ash, who adds, “It is important to

Siddique brothers


FINANCE, BANKING & INVESTMENT - Asian Voice & Gujarat Samachar 2019

not know the answer to everything. You have to be determined enough to see things through, this get rich quick scheme is not real life, if it comes to easy it will all go so very quickly”. An important ingredient to any entrepreneurship venture is motivation and teamwork. For the Siddique Brothers, their continuous growth of Missy Empire and the recognition it receives on a global scale its what motivates them. “When you are so stuck in with your day in and day out schedule, you forget about the impact you are having in the industry and with customers. Reading positive tweets on social media by customers, gives us that boost and knowing we are making a difference to the world,” says Ash. But how does one manage the responsibilities of entrepreneurship? “We wear many hats, and with it comes the ability to prioritize,” says Ash who believes in working smart not hard. Maintaining the balance between work and relaxing he shares his routine: “Saturday is the day I spend with my family; I disconnect from my phone. From Monday to Friday I get up at 5am, head to the gym which helps me to energise myself for the day ahead and by 10:30pm I’m in bed no matter what, if you don’t switch of you will burn out.” The brother’s advice for aspiring entrepreneurs is to have a plan in place and to not be afraid of change. “Evolution is crucial in any business and brand,” says Ash, as Missy Empire announces its expansion to the USA, Europe, and Australia. The brand identity of Missy Empire, the relationship it has with its consumers, manufactures and clients is one which cannot be replicated and to what the Siddique Brother says makes them unique.

23 Euro Exim Bank .qxp_A4 Temp 01/07/2019 08:34 Page 23


by Graham Bright, Head - Compliance & Operations

uro Exim Bank serves corporate clients and import businesses around the globe taking advantage of these new markets by facilitating the issuance and relay of essential authenticated instructions. Euro Exim Bank is headquartered, supervised and regulated in St. Lucia in the West Indies with a Class ‘A’ banking license, and with a nonregulated Representative office in London. The Bank provides an essential service to SME’s traditionally hampered by high costs of foreign exchange and restrictions on liquidity in challenging jurisdictions. We connect corporate buyers and sellers, through creation and remittance of Letters of Credit, Standby Letters of Credit, Bank Guarantees and Performance Bonds, enabling businesses to economically and efficiently navigate the complex lifecycle of import and exports of goods and services through the trade ecosystem. With years of Trade Finance and SWIFT experience of complex instruments and transacting via an extensive network of global counterparts supporting business in India, UAE, the Caribbean, China, Africa, and Asia, we support trades of an ever-increasing scope of goods.



intentioned, difficult to achieve. Using xRapid, firms switch from local currency into the Ripple underlying crypto asset, and at the receiving party, XRP is converted to local currency for pay away to local firms dramatically lowering capital requirements for liquidity.

FLUTTERWAVE We are also working with a key technology provider for our new payments platform, enabling us to accept payments from over 100 currencies in Africa to pay away to suppliers worldwide, offering confidentiality, speed, reliability and above all competitive rates. Next steps? Building on our blockchain technology expertise to embed trade finance instructions within the payload of Ripple payment instructions, thereby creating a multipurpose immutable data element, which will reduce cost, time and risk for participants.


Part of our fintech and crypto currency strategy in technology innovation, was joining the Ripple global payments community. We achieved xCurrent connectivity in record time enabling institutions to instantly communicate and settle cross-border payments in real-time with end-to-end visibility and tracking. The second phase of the project was participation with Ripple’s frictionless xRapid service. Payments to and from emerging markets often require pre-funded local currency accounts around the world, where liquidity costs are extremely high for smaller SME’s, making international business, no matter how well

Euro Exim Bank are members of the Caribbean Association of Banks, other key industry bodies. We strive to be an innovative, agile leader at the forefront in trade services, technology platforms and settlement methods with alternative trade finance solutions. In a global economy subject to market retraction, excessive bank derisking policies, threats of account closure and growing restrictions in global supply chains, Euro Exim Bank are truly leading the facilitation of global trade through support of the ever-demanding needs and expectations of international corporates.

Asian Voice & Gujarat Samachar 2019 - FINANCE, BANKING & INVESTMENT


24-Crispin Simon.qxp_A4 Temp 01/07/2019 08:35 Page 24


he Cricket World Cup 2019, is being played in Birmingham and Nottingham, and the Department for International Trade’s India Roadshow is in Coventry. This means, that there is no better time for Midlands businesses who are considering India as their next export market to form relationships and make key contacts. The UK and India share a ‘Living Bridge’ of people, ideas, institutions, language and technology. But, India's growth is representative of the opportunities available: it is the world’s 5th largest economy and due to become the 3rd by the end of the next decade – overtaking Japan and Germany, and it is the fastest growing G20 economy.


THE OPPORTUNITY The Indian market is in a sustained period of strong growth and a major attraction for UK exporters is the country’s notable young demographic and its thriving middle class. India boasts a 1.3 billion-strong population with a median age of 27, and rising affluence is the biggest driver of increasing consumption. UK exports to India in 2018 were £8.0bn, up 19.3% since 2017. There are a range of exciting export opportunities if you are willing to take a long-term approach, and Midlands businesses such as MicroMesh have shown that it can be done.

IF THEY CAN YOU CAN TOO Micro-Mesh, a manufacturer of hydraulic and air filters for a wide range of industrial applications is one company that has found success in India. The company was formed around the mining industry in the UK, and has supplied many parts that have been exported –kicking off in


2016 when they sent $340,000 worth of mining spares to India. In 2016 the company purchased Eurofilter from Champion Laboratories and since, have seen year on year growth and expectations for 2019 are in excess of £4m just in India. Annual turnover for 2019 is estimated to be in the region of £6m.One way they were able to achieve this was to spend time in market and securing a business partner who understands the market inside and out. Amba Projex has also seen significant returns from their exports to India, amounting to £375,000 in 2018. The business designs, manufactures, and installs industrial coating and lamination equipment, converting machines and automated processes. It highlights that this emerging economy is a hot bed for further developments coming from the UK that can be applied to Indian goods.

MANUFACTURING MATTERS India is expected to become the fifth largest manufacturing country globally by 2020. Major automotive companies from the Midlands present in India include JCB, Jaguar Land Rover (as part of Tata Motors) and GKN Driveline. India’s notable manufacturing sector growth combined with high level government support make the country a promising market for UK exporters. India is expected to be the world's third-largest automotive market in terms of volume by 2026. The industry currently manufactures 25mn vehicles, of which 3.5mn are exported and is a viable outsourcing hub for UK exporters with low cost of production and increased demand for luxury cars in India. The Government of India has also

FINANCE, BANKING & INVESTMENT - Asian Voice & Gujarat Samachar 2019

announced an ambitious plan to become fully electric by 2030 and is providing grants up to £12 million for the procurement of EVs.

TECH TOTAL India is one of the most data-rich countries in the world, is the third largest tech start up hub globally. It has the lowest mobile data costs and the second highest number of internet subscribers in the world. The UK-India Tech Partnership announced in April 2018, identifies and pairs businesses, venture capital, universities and others to provide access routes to markets for UK and Indian entrepreneurs and small and medium-sized enterprises. But it’s the telecommunications market in India which is particularly attractive to UK exporters estimated to reach nearly £80 billion by 2020.

SUPPORT The UK continues to work collaboratively with India, demonstrated through the UK-India Joint Working Group on Trade, which includes the conclusion of the Joint Trade Review in January 2018. Prime Minister Theresa May also agreed during the Indian Prime Minister Modi’s visit in April 2018 to a new Trade Partnership with India, to build on the recommendations that followed the Joint Trade Review, aimed at identifying non-tariff barriers in the Food and Drink, ICT and Life Sciences workstreams; and developing stronger long-term trading ties. DIT is on hand to help navigate the India market, and we have the resources, sector expertise and financial support through UKEF to help you leap into India.

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Asian Voice & Gujarat Samachar 2019 - FINANCE, BANKING & INVESTMENT


26-Food & Trade.qxp_A4 Temp 01/07/2019 08:36 Page 26

Plenty of fish in the market

Food and drink industry bridging UK-India trade relations by Priyanka Mehta

he food and drink (F&D) industry is reportedly the largest manufacturing sector in the UK. According to the Food and Drink Federation (FDF), it accounts for the country's £110 billion 'farm to fork' food chain. While Brexit has sparked concerns about the UK's AgriFood exports to the EU region, there is an increasing appetite for processed food products among the 1.3 billion Indian consumers. This has substantiated that there is 'plenty of fish' for the UK's F&D businesses outside of the EU27. “India is a potentially lucrative export market for UK F&D goods, with a large and rapidly expanding middle class. Rising disposable incomes, and shifting consumption patterns toward higher-value and processed products has only helped,” said Shubhi Mishra, Lead, Food and Drink Policy, Advocacy, and Trade Promotions at the UKIBC. The UK India Business Council (UKIBC) helps British companies to identify domestic partners in India and conducts market research tailored for these businesses aiming to penetrate and expand in the South Asian subcontinent. The council also assists with procedural issues around licensing and barriers to trade at a time when the Indian food processing industry accounts for over 30% of the country's total food market.


SLICE OF BRITISH MEAT, OPPORTUNITY IN INDIA'S UNORGANISED SLAUGHTERHOUSES But India's food processing industry is plagued by the unorganised slaughterhouse with reports suggesting that 90% of the demand for meat in India is handled by the unorganised market. Meat is the only category in the $300 billion grocery market that does not function in an organised manner. While scientific breeding may have cut down costs drastically, the rise in


factory farming, overuse of antibiotics, and poor production conditions have sparked concerns about the quality of meat being consumed. It is in light of this that recently, the UK's lamb industry has achieved an export order where it can now deliver British sheepmeat to India. The UK exports about £386 million sheep-meat annually but only about 4% of the total export goes out of the EU. “Despite efforts to improve the business investment climate and support Indian exports, the Government Of India continues to raise tariffs on imported food and agricultural commodities. “Current opportunities for valueadded imported foods are mostly limited to higher income consumers in these markets. India’s modern retail sector is expanding, and food processors want access to a global supply chain. Nonetheless, the market for imported food products remains relatively small due to high tariffs, ongoing import restrictions, and strong competition from the domestic industry,” said Shubhi.

BLENDING SCOTCH AND TRADE RELATIONS However, this has not deterred the British delegates to lead trade missions in India where they have now promoted popular British exports such

FINANCE, BANKING & INVESTMENT - Asian Voice & Gujarat Samachar 2019

as the Scottish whiskey, craft beer, and dairy produce. The value of Scotch whiskey exports rose nearly 8% in 2018, with booming sales in India. Today, the country is one of the top 10 export destinations for whiskey produced in Scotland according to the data supplied by the HMRC and analysed by the Scotch Whiskey Association. In volume terms, exports were primarily driven by growth in India, which expanded by 23.1 million to 112.6 million bottles. “Imports of consumer food products from the UK grew by approximately 47 percent in 2018 to GBP 14 mn primarily riding on products like black tea, cheese, sauces, sugar confectionery, and others.

“Beverages, spirits, and vinegar was the largest imported category from the UK to India valued at GBP 150mn followed by miscellaneous food preparations (sauces, soups, etc) at GBP 4mn in 2018,” said Shubhi. India’s food and drink services market is expected to grow up to £500 billion over the next few years. As the Brexit UK pandemonium continues, a post-Brexit UK is presented with a unique opportunity of cooking healthier trade relations with India through investing in infrastructural growth in India's F&D industry.

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Modi 2.0

A mandate for India’s economic growth

PM Narendra Modi by Dr. Param Shah

WITH INDIAN PM NARENDRA MODI LED GOVERNMENT BEING RE-ELECTED FOR A SECOND TIME WITH RECORD MAJORITY, BUSINESSES EXPECT YET ANOTHER FIVE YEARS OF CONTINUED ROBUST GROWTH IN THE ECONOMY. TODAY, INDIA IS ALMOST A $3 TRILLION ECONOMY CLUBBED WITH ONE OF THE FASTEST-GROWING EMERGING MARKET. INDIA INC FEELS THAT A STABLE GOVERNMENT WILL GIVE IMPETUS TO GROWTH IN THE COUNTRY AND LEAD TO HIGHER FOREIGN FUND INFLOWS. odi 1.0 focussed on some singular reforms like GST, IBC, RERA, MPC, etc. Modi 2.0 must prepare for total factor productivity — enhancing reforms like land, labour, etc — to take the Indian economy to the next orbit of double-digit GDP growth. The next five years are crucial as they will set the foundation for India to become the world’s third largest economy by 2030, with shared prosperity and in a sustainable manner. Modi 2.0 is expected to deliver on its promise of spending $1.4 trillion over five years for infrastructure, as well as a significant investment in India's agriculture sector, and plans to transform India into a global manufacturing hub. The government faces an uphill task of keeping up the economic growth and overcoming some immediate challenges. For instance, resolving the Non-Banking Financial Companies (NBFCs) funding and liquidity issues, public-sector bank consolidation, the continuation of fiscal consolidation and accelerating the pace of economic expansion despite a challenging external environment, particularly given the escalating economic war between the US and China. One of India’s oldest and largest Chamber of Commerce, FICCI, recently submitted to the Government a 100 days agenda as well as an agenda for the next five


years. The ten point agenda includes – (1) introduction and passage of pending bills, (2) announcement of pending policies, (3) establishing governance processes, (4) revising budget allocations, (5) making land available, (6) simplifying GST, (7) enabling raising of capital and promoting investments, (8) bringing down cost of doing business, (9) addressing farm distress, and (10) creating an ecosystem that promotes employment. Economic stability is an important tool for foreign investors as it sends a positive signal with regards to continuity of policies. David Solomon, CEO Goldman Sachs recently in an interview had said that Modi 2.0 had given them increased confidence both as an allocator of capital & as an investor. He had further added that under a second term for PM Modi, he is hopeful that the reform program will continue and accelerate to provide a great deal of upside for the Indian economy. The Indian government’s favourable policy regime and robust business environment have ensured that foreign capital keeps flowing into the country. Liberalising all economic sectors, ranging from consumers to

defence. This makes it easier for foreign investors to access the world's fastest-growing large economy. India's foreign direct investment increased from $25 billion in 2014 to $45 billion today. There are wide ranging reforms that Foreign investors and businesses are further expecting from the Government in this term. These include allowing more than 50% foreign investment in sectors like insurance, defence, direct retail ecommerce. Reducing restrictions on foreign investment in multi-brand and single-brand retail. Raise the ceiling on foreign institutional investment in Indian Companies. Allowing foreign universities to set up campuses. Allowing foreign lawyers and architects to practice in India. India has become one of the most attractive emerging market for global investors and businesses. In a recent Governing Council meeting of the NITI Aayog, PM Modi has set a challenging target of becoming a 5-trillion-dollar economy by 2024. To achieve this the domestic economy will have to fire on all cylinders coupled with big push from global economy. The next five years of Modi 2.0 will be crucial from policy and economic growth point of view. Experts and investors will be closely monitoring India’s journey in the next five years. Disclaimer: The views expressed herein constitute the sole prerogative of the author. They neither imply nor suggest the orientation, views, current thinking or position of FICCI. FICCI is not responsible for the accuracy of any of the information supplied by the author.

Asian Voice & Gujarat Samachar 2019 - FINANCE, BANKING & INVESTMENT


28-Foreign Direct Invest.qxp_A4 Temp 01/07/2019 08:37 Page 28

Applicants have to submit their proposals in the prescribed formats and submit the prescribed documents

The Foreign Investment Facilitation Portal (FIFP) has been developed as a single point interface with the Government for sectors requiring approvals. The portal is administered by the Department of Industrial Policy & Promotion (DIPP). The process is as follows:

The portal, managed by (DIPP), will identify all the concerned Ministry/ Department where the application should be forwarded.

Your legal guide to setting up a business in India F oreign Direct Investment (FDI) in India has been a political hot potato for several years now. New Delhi has jumped 53 hoops in the World Bank's ease of doing business index and is ranked at the 77th place as of 2019. But foreign investors aiming for a slice of the 1.3 bn Indian market size, are challenged by existing red-tapism and bureaucratic hurdles. The Indian government has been inching towards a digital application process to help British businesses establish their branch or liaison offices in India either through the “government” or “automatic” route. While the latter does not require businesses to take any prior approval from the Reserve Bank of India (RBI). In the “government” route, businesses have to seek approval from concerned ministries/departments.

DIGITAL APPLICATION PROCESS AND A SIMPLER TAXATION SYSTEM “The licensing application and compliance requirements for a majority of the Government departments are now online; providing for accountability by the Government officials. The Indian Government has also set up single window clearances for certain registrations. “But I also believe that the implementation of GST (Goods and Services Tax) is helpful to foreign businesses because they don't have to deal with the complex taxation system that existed before,” said Arbinder Chatwal, Head India Advisory Services, BDO UK LLP. BDO UK provides assistance with market research, helps with the selection of the right joint venture partners and carries out the necessary due diligence. Arbinder has been in the driver's seat helping UK companies


The portal also forwards the application to the Reserve Bank of India (RBI) for comments under the foreign exchange regulations and to the Ministry of Home Affairs for proposals requiring security clearances (defined in the SOP).

The application will then be scrutinised and any additional information/ documents from the applicant may be sought for All the consulted Ministry/ Department shall forward their comments and the concerned Ministry/ Department shall finally decide the application

The FIFP thus services as a single point interface for the applicants and the SOP provides for a time bound disposal of 8-10 weeks for all the applications made.

and individuals to invest in India and vice-a-versa. FDI in India is allowed in almost all sectors, barring areas such as Mining, Aviation, multi-brand retail trading, among others. “For businesses operating in a specified sector say Defence, approval may have to be sought from several nodal authorities. In this case from the DIPP, Ministry of Commerce & Industry, in consultation with the Ministry of Defence and Ministry of External Affairs. The Government, in line with its 'Make in India' initiative, has been giving speedy clearances to such approvals over the last two years. “However, UK companies intent on investing in India's defense sector are reluctant to relinquish their R&D and IP; a challenge for them,” said Arbinder.

“PROTECTIONIST ECONOMY” AND REPARTRIATION OF PROFITS Investments can be made either on a repatriable basis; considered to be at par with investment by other foreign investors and subject to the same terms and conditions or a non-repatriable basis; wherein the capital cannot be repatriated. This special window for investment has been granted to NRI/PIOs to entitle them to make their investment out of domestic funds; with less terms and conditions to be adhered to. India has the perception of being a protectionist economy where investment is easier but repatriation of generated profits for the NRIs or the PIOs a lengthy process. While this has been liberalized over the years, the quantum of the amount that could be repatriated is a challenge. This could perhaps be best highlighted through the 'Vodafone Retrospective Tax

FINANCE, BANKING & INVESTMENT - Asian Voice & Gujarat Samachar 2019

Arbinder Chatwal, Head India Advisory Services, BDO UK LLP

Dispute Case'. “Profits generated during the year can be repatriated by way of dividends. But it comes with a dividend distribution tax cost. The Interest payable on debt is restricted by virtue of the transfer pricing provisions. The capital debt can be repatriated only after the minimum maturity of threefive years,” explained Arbinder. Despite, compliance issues, regulatory complications, and repatriation of profits, India has seen an increase in FDI from British companies. The UK is the largest single western investor representing 7% of all FDI in India as of 2018. This is expected to grow in light of post-Brexit UK-India trade relations.

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AS PER THE IMF’S WORLD ECONOMIC OUTLOOK OF 2018, INDIA IS THE FASTEST GROWING MAJOR ECONOMY. IT RANKED SIXTH IN THE WORLD IN 2018 WITH A NOMINAL GDP OF USD 2.61 TRILLION. THE IMF PROJECTION ALSO RANKED THE UNITED KINGDOM AS THE FIFTH LARGEST ECONOMY OF THE WORLD WITH A NOMINAL GDP OF USD 2.62 TRILLION. DIFFERENCE BETWEEN THE TWO ECONOMIES IS MARGINAL AND IMF PROJECTS THAT INDIA MAY REPLACE THE UK FROM FIFTH PLACE IN 2019. HOWEVER, WHILE MEASURING ON THE BASIS OF PURCHASING POWER PARITY (PPP) OF THE GDP, INDIA RANKS THIRD WITH A SIZE OF USD 9.45 TRILLION WHILE THE UK SLIPS DOWN TO THE NINTH PLACE WITH TOTAL GDP ON PPP BASIS AT USD 2.91 TRILLION. IT SHOWS THAT THE COST OF PRODUCTS AND SERVICE, AND RESULTANTLY COST OF MANUFACTURING, IN INDIA IS MUCH CHEAPER THAN IN THE UK. s per India’s Department of Commerce figures, India’s total trade with the UK in 2018-19 amounted to USD 16.71 billion, registering a growth of more than 16% over the last year. It could be seen that bilateral trade between the two countries could achieve positive growth in 2017-18, after witnessing negative fall in two consecutive financial years previously. India’s export to the UK amounted to USD 9.3 billion while import was valued at USD 7.6 billion during FY 2018-19. The year witnessed a steep increase of over 57% in the UK’s export to India while the latter’s export was reduced by almost 4%. As per DPIIT website, UK is the 5th largest investor in India, having invested more than USD 26.8 billion from April 2000 to March 2019. A report by CII-Grant Thornton ranks India as the fourth largest investor in the UK. Over 842 Indian companies, with consolidated revenue of more than GBP 48 billion have created more than a hundred and four thousand jobs. This is good, but not satisfactory, as there is scope for further achievement.


Bridging the gap

It is rightly noted by the recently launched House of Commons, Foreign Affairs Committee report titled ‘Building Bridges: Reawakening UKIndia ties’ which acknowledges that ‘India is an essential partner to the UK and will only become more important. It also raises concern over the fact that ‘UK is falling behind in the global race to engage with a rising India’. The UK has fallen to the seventeenth place as India’s trading partner in 2018-19 from the second place it occupied in 1998-99. It is true that the relationship is not maintained at its fullest potential. Website of the High Commission of India in London notes that India and UK have a number of bilateral dialogue mechanisms, of which trade and commerce fields seem to be covered mainly by Economic and Financial Dialogue at the level of Finance Minister & Joint Economic and Trade Committee (JETCO) at the level

of Commerce Minister. Others mechanisms cover different areas of engagement between the two countries. Such mechanisms could be utilised to play an important role in ‘bridging the gap’ and ‘reawakening the bilateral ties.’ In contrast to the Brexit uncertainties prevailing in the UK, India has ushered an era of stable politics. The recent election result in India has given a strong majority to PM Modi to lead India for the second consecutive term. It is an endorsement of his policy of reforms. The stable political tenure for the next five years will allow India to achieve desired growth in all areas including in the economic. With over 1.3 billion people of which more than half is talented young population, India is at the peak of its demographic dividend. The country is on the path of acquiring and accepting modern technology. The penetration of mobile, banking and internet at the farthest corner of India has created sufficient infrastructure for e-commerce and other internet-based industries. Education level is increasing and people speak English. This will provide opportunities for the Fin-Tech companies of the UK and the world to expand its base and use India as a laboratory and market place for experiments and innovation. Having 1.6 million Indian origin people in the UK which constitute over 1.8% of total population and contribute over 6% of GDP is a potential ‘living bridge’ connecting the two big economies leading towards mutual growth and progress.

Asian Voice & Gujarat Samachar 2019 - FINANCE, BANKING & INVESTMENT


30-Editorial Index-Credit.qxp_A4 Temp 02/07/2019 10:19 Page 30

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Topics.............................................................................................Page No.

The effect of higher oil prices on the world economy.........................................................4

Innovation, The key for energy market. ..............................................................................6

Transferring wealth: From baby boomers to next generation............................................8

Starling Bank: The way banking should be... ....................................................................10

Story Builder: FinTech and Fundraising..............................................................................11

7 reasons why Residential Investors are choosing Commercial Property........................12 “Are Bridging companies an alternative to banks for investors?. ......................................13

Solving a real need. .............................................................................................................14

Reducing inequality through increased taxation ................................................................16

Making Pensions count.. ....................................................................................................17

Non-resident property owners: The rules have changed ..................................................18

Start-up Hub: A new approach to Entrepreneurial Ecosystem.....................................20-21

De-coding entrepreneurship. ..............................................................................................22

Facilitating trade and real-time p ayments in challenging markets ....................................23 Invest in time to export to India ..........................................................................................24

Plenty of fish in the market. ................................................................................................26

Modi 2.0: A mandate for India's economic growth. ............................................................27

Your legal guide to setting up a business in India. ............................................................28

Bridging the gap ..................................................................................................................29


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