Juices for PMS, patches for cramps: Period care gets padded up

There are 336 million menstruating women in India, and 36% use disposable sanitary napkins, according to Menstrual Hygiene Alliance of India (MHAI). That’s 121 million women.

It’s no surprise then that the menstrual products market is growing. And fast.

Valued at $340 million by market research provider Euromonitor in 2017, the sanitary products market in India is predicted to grow to $522 million by next year. It is dominated by international FMCG (fast moving consumer goods) companies such as Procter & Gamble’s Whisper and Johnson & Johnson’s Stayfree, which, according to Euromonitor, have a retail market share of 50.4% and 24%, respectively. Their products are priced low to ensure maximum reach, especially in a country like India.

But not everyone is price-sensitive. Those who can afford it tend to seek quality alternatives. As in any industry.

So, despite the FMCG dominance in sanitary products, there’s been a flurry of menstrual products focused on health and comfort. From pain-relief patches to PMS-friendly juices to anti-rash creams to ‘naturally’ made pads, the Indian sanitary products market has, in the past few years, grown to accommodate more than just a basic need. Much like skincare, haircare, or even dental care, period care is a growing option available online.

And it’s catering to women who’d be happy to spend that extra buck for a comfortable period.

“It is a convenience-conscious market. There is a large audience that is not happy with their brands. They want value for money, but they want better products,” says Deep Bajaj, founder of Sirona, a Delhi-based online hygiene products company which offers tampons, cups and other products.

“It’s how [cab aggregator] Uber bettered the market from [competition] Meru. Now, even if it costs a little more, you are willing to take an Uber for the convenience,” he adds.

This shift is particularly interesting in the sanitary products space for it’s one marred with societal shame. Even today, sanitary pads are often wrapped in their trademark black plastic bags—to be used but not seen. Over the past few years though, India has seen its cultural mainstream, Bollywood, take on the subject with films like Pad Man and Phullu. Just a few months ago, the documentary Period. End of Sentence., which spoke about India’s menstrual taboos, won an Academy Award.

“It’s time we stopped whispering about periods”

Gauri Singhal, Founder, Floh

“About three decades ago, Whisper was the first brand to show a sanitary pad and mention the word ‘periods’, in our advertising. At the time, when we wanted to advertise on primetime, TV channels thought it was an inappropriate product to advertise,” says a spokesperson at Whisper, P&G which claims a double-digit percentage growth this year. Whisper’s iconic ‘Touch the Pickle’ campaign in 2014 was well received for taking on period superstitions.

Of course, a lot has also changed. Enough to make period care products marketable if not popular. EcoFemme, a social business which makes washable cloth pads in Tamil Nadu’s Auroville, claims 44.63% growth since 2015, which was also the year it started its online store. ‘Chemical-free pads’ brand Azah, launched as recently as November 2018, claims 40-50% growth each month. And while these companies are still fairly small, they’re reaching their customers in ways FMCG companies aren’t. They have one-on-one channels between the buyer and the company via social media and monthly subscription programmes, eliminating the need for women to settle for a product that’s just about okay.

Comfort and environment, but not cost

A fair share of these period care companies, interestingly, started with providing sustainable alternatives to the FMCG companies’ sanitary napkins. A DownToEarth article, based on MHAI data, calculates that India alone generates 12.3 billion disposable sanitary napkins a year, most of which are not biodegradable.

EcoFemme launched in 2010 to aid menstrual education and provide a livelihood to the rural women of Tamil Nadu, and due to the philanthropic efforts of those who liked its washable cloth product, it grew as a business. “I began a small production with the idea of making the products available to women in Auroville. Some were inspired to start selling the products in their home countries (mostly in Europe). Within a few years, I had a small ‘business’ that had grown completely organically,” says EcoFemme founder, Kathy Walking. The company now sells five different sizes of reusable pads priced at Rs 230-275 each ($3-4).

The menstrual cup, also known as the moon cup, made of silicone, is possibly the most sustainable sanitary product. One cup lasts close to a decade, is reusable, washable. All it takes is a one-time payment.

However, that one-time payment can seem daunting to many. “Newer products such as menstrual cups are niche offerings as of now, since the numbers are small and unit prices are higher than what the vast majority of Indian customers may be willing to pay,” says Devangshu Dutta, founder-chief executive of Third Eyesight, a consulting firm in the consumer products and retail sector. “There is, no doubt, a case to be made for lifetime value comparison between menstrual cups and pads as well as the obvious environmental impact, but the first barrier in many consumers’ minds across product categories is unit price,” he adds.

The moon cup came to India in 2016, with Sirona launching it at under Rs 400 ($6), followed by Boondh, a Bangalore-based social enterprise focussed on sustainable menstrual health practices, which currently sells it at Rs 700 ($10).

Sirona had previously found success in launching the disposable female urination device ‘PeeBuddy’ in 2015 (Rs 20/$0.30 a pop). While this wasn’t a menstrual product, it marked disruption in the feminine hygiene market, having sold over 2 million units to date. Soon, Sirona was selling pain relief patches (Rs 290/$4 for five patches that last 12 hours each), anti-chafing rash cream (Rs 375/$5), disposal bags, tampons and panty-liners.

Another brand Carmesi, which takes its name from the colour ‘crimson’, launched its pads in November 2017, with the promise of both comfort and being “chemical-free, environmentally friendly”. Its products cost Rs 200 ($3) upwards while the FMCG alternatives start at as low as Rs 40 ($0.5), for a pack of 10.

The Carmesi website


“We…made this industry care for a woman’s experience with her period products at a time when the conversation was restricted only to affordability. While we acknowledge the problem of affordability of sanitary pads, we don’t dismiss the need for better products. The personal care industry has advanced so much. Then, why not menstrual hygiene?” asks founder Tanvi Johri.

Being Juliet, meanwhile, saw an opportunity in playing concierge for menstrual needs. With as many as 18,000 regular customers, the service solves the delivery problem by sending a box of menstrual hygiene products (and goodies) to one’s doorstep for Rs 500-900 a month ($10-12). Which is a bit steep.

Being Juliet’s subscription plan

“As a society, we are conditioned to see women as selfless beings who don’t spend on themselves. That’s how the affordability pitch comes in,” argues Ankur Goyal, the founder and CEO of &Me, India’s first ‘period drink’. The &Me drinks come in different flavours, for women with PMS (premenstrual syndrome) and PCOS (polycystic ovary syndrome), costing Rs 320 ($4.5) for a pack of four. It aims to bring the focus back to menstrual health, targeting nutritional deficiencies and symptoms like mood swings and night sweats.

When India’s first menstrual drink was launched last year, it was called Rhythm. “We decided to put the words PMS directly on the bottle and it made no difference in our sales. The time for hidden words and sentences to signal menstruation are over,” says Goyal.

Comfort and cost, but not the environment

Shashwat Diesh overheard his sister complaining about rashes from pads. He couldn’t understand why women with her income didn’t have access to better products. He along with Aqib Mohammed (both co-founders of Azah) conducted a survey with a sample size of 300, and over 50% had suffered period rashes. “We looked at the products in the market and realised they used a lot of cheap raw material and harmful chemicals that caused skin irritation,” he says. After some material research and time spent on design, they launched Azah, a pad with a soft, organic cotton top layer. Azah, priced at Rs 240 ($3.5) for a box of 12 pads, has over 12,000 regular customers, and while it isn’t biodegradable, it promises to be in two months.

Azah’s website

Pads are far from the ideal sanitary product, but it’s what the market demands. “We thought of sanitary pads first because Indian and other South Asian women still don’t want to use invasive products. It is more cultural conditioning than anything else, but it is difficult to change,” says Swathi Kulkarni, co-founder and CMO of Mumbai-based chemical-free sanitary brand Nua. Launched in May 2018, it claims to have acquired 60,000 unique customers with 50% residing in tier-II and tier-III cities.

Then there’s the minority of tampon users in India. Globally, the tampon market share is predicted to attain an overall value of $6.34 billion by the end of 2025, according to market researcher Transparency, and some companies have seen the opportunity in India. While Sirona sells tampons, Floh, also a digital-first market entrant, launched in May 2018 as ‘India’s leading tampon brand’.

Floh claims a 40% monthly growth, with founder Gauri Singhal stating that 50% of its orders come from tier-II and tier-III cities. Early this year, Floh introduced an ‘all-natural, cramp-free’ period patch. “Besides, sanitary napkin is a monopolistic category,” says Singhal. A view Sirona’s Bajaj echoes when he says pads aren’t conducive to much innovation.

Most women still favour the pad, and in a comfort-led market, they’re only willing to be environmentally-conscious if the product ticks all the other boxes. “The environmental impact of disposable sanitary pads, or for that matter of any other product, is not yet a big purchase influencer for most Indian consumers,” says Dutta of Third Eyesight.

The P&G vow

P&G aims to be able to recycle absorbent hygiene products (AHP) in 10 cities by 2030, according to its latest sustainability agenda. In the long term, it hopes to use 100% renewable or recycled materials for all products and packaging. Mostly because it contributes to the problem. Quite a bit.

However, there are a few brands in the market that sell biodegradable sanitary pads, often at steep prices. These promise women an eco-friendly solution without the hassle of adapting. Laura O’Connell, communications officer at EcoFemme, though is quick to caution. “We are concerned about this type of product because often ‘biodegradable’ or ‘compostable’ menstrual products need very specific conditions in order to be broken down. If you dispose of them in a plastic bag [they] cause just as much harm as conventional disposable menstrual products,” she says.

As such, FMCGs producing disposable sanitary pads are also making an attempt to recycle the waste they add to the landfills. “We have committed to establish an Absorbent Hygiene Products Recycling facility… India will be the first country outside of Europe where we will launch this,” promises the Whisper spokesperson. “The technology upcycles sanitary waste to deliver high-quality secondary raw materials such as recycled cellulose, recycled plastic, and recycled superabsorbent.”

The rural question

While FMCGs are quick to promise waste-management solutions, they’re less keen for a change of tack.

“In reducing the margins between sustainability and affordability, it is important to consider that a large percentage of the population still do not use the right products to manage their menstrual hygiene—which can pose significant health hazards in the long run,” says Manoj Gadgil, Marketing Director, Johnson & Johnson.

For the newer brands, rural markets, which FMCGs have access to, are still a distant dream. “Distribution and dialogue are a challenge and something that small brands will only be able to address with investor funding and government support,” says Bajaj of Sirona who also admits that he has written several letters requesting the government to switch to cups in its awareness programmes. “If we are proposing a sanitary pad solution to these women, we will face the additional problem of them landing up in our landfills in the next 10-15 years. Besides, a cup does away with buying stocks every month,” he adds.

More options in the offing

Boondh is also working on a reusable menstrual disk. “It’s similar to a diaphragm (female contraceptive) and will be easier to use,” says Kannan.

So far, at the policy level, the cup is barely acknowledged. The GST exemption in 2018 was a singular effort aimed only at sanitary pads. “Most menstrual cup sellers refer to US FDA guidelines. They are not categorised as a drug or medical device and hence do not fall under any standardising or regulatory body,” explains Bharti Kannan, Founder, Boondh, who has filed an RTI with the Central Drugs Standard Control Organisation to understand the status of menstrual cup regulation in India.

The industry, especially the kind demanding policy change, has a long way to go. But entrepreneurs aren’t giving up yet and believe the solution to all menstrual health problems ultimately lies in the tenets of awareness and reuse. “We hope to see a lot of change in the next five years. But, one thing is certain, the future will not be a pad-only story,” says Bajaj.

The urban shift

While Bajaj appeals to the government, Singhal of Floh is happy to have started a conversation with the slogan “Have a bloody good period”. What Carmesi does with its name, Floh does with its use of blood red ink in its campaigns instead of the usual cerulean blue.

“It’s time we stopped whispering about periods,” says Singhal, aware of the pun.

Kulkarni of Nua sees a promising trend in eliminating taboo—free and open two-way communication. “We receive several messages seeking advice and product details on our social media as public comments, not private messages. These aren’t restricted to tier-I cities either,” she says.

Kannan of Boondh admits the boom is heartening but is careful in her analysis of the situation. “The emergence of new players and the rise of feminist politics have indeed played a role in dismantling taboos, but it is not like there is no shame. We still have a long way to go,” she adds.

Reusable methods are also “a means to avoid the synthetic ingredients in pads and tampons”

Dr. Geeta Komar, Consultant-Obstetrics and Gynaecology, Columbia Asia Hospital

Both P&G and J&J declined to comment on these new players. There is a lack of formal data to establish the period care companies’ presence or growth story, but the stakeholders aren’t too concerned yet. “It is essentially a new category and it is too early to talk in percentage terms. It holds value mainly for the disruption it is causing. When we sell 7,000 menstrual cups a month we are ensuring these women stop buying sanitary pads altogether,” explains Bajaj. “More players only mean more options for women,” he adds.

Azah’s Mohammed suggests there’s one other thing that keeps them going. “Catering to a niche, comfort-driven market is not an incentive for traditional players yet.”

Yet.

Edited by Durga M Sengupta.

Clarification: An earlier version of this copy carried a typo in place of Swathi Kulkarni’s name and missed Shashwat Diesh’s name altogether. These errors have been rectified. We regret the same.

A digital cure for India’s mental health crisis

Just two months into the existence of Juno Clinic, it was evident the company’s business model wasn’t going to cut it. Founded in January 2016 by Davman Technology Services, Juno was meant to meet a pressing and widespread health need—that of accessible, affordable psychotherapy.

To do this, it aggregated independent mental health professionals—psychologists and psychiatrists—on an online platform, making them accessible both offline and online. With $2.4 million in funding from individual investors including Atul Nishar, the founder of Hexaware Technologies & Aptech Computers, Juno was one of the first chains of its kind in the country.

The opportunity couldn’t have been more apparent. Conservative government estimates state that nearly 15% of India’s adults need active interventions for one or more mental health issues. The World Health Organisation (WHO), meanwhile, states that one in four people globally may be affected by mental disorders.

And while a huge market of potential patients awaits these mental health interventions, the supply side of the equation is horribly skewed. In 2017, Anupriya Patel, minister of state for health and family welfare, painted a grim picture of the mental health care situation in the country. In response to a question asked by a minister in India’s lower house of Parliament, the Lok Sabha, Patel stated there were just 3,827 psychiatrists and only around 898 clinical psychologists in the country. As against a requirement of 13,500 and 20,250, respectively.

According to the WHO, access to treatment is grim with a treatment gap of up to 95.7% for depression in India

Depression treatment gap

According to the WHO, access to treatment is grim with a treatment gap of up to 95.7% for depression in India

Set against a backdrop so stark, Juno seemed destined to succeed. It saw itself as a solution, not just to access, but to a critical factor preventing people from seeking mental health care in India. The stigma around mental illness. By allowing people to seek help remotely and discreetly, mental health issues could finally be addressed.

But Juno, and other startups such as HealthEminds and ePsyClinic which began with similar marketplace-based models, have been forced to rethink their approach entirely, scale down considerably, or become bootstrapped, respectively. They underestimated just how ingrained the stigma dogging mental illness is. Indians are still reluctant to take the plunge and get diagnosed, find a professional therapist, and open up to a stranger, however qualified. At least not en masse. Not yet.

The struggles of these startups are indicative of the prevailing attitudes in the country regarding mental health issues and the difficulties in controlling the quality of therapy in a marketplace. But this isn’t to say there isn’t a market for mental health care in India at present. Bengaluru-based Cadabams Mental Healthcare Services and 1to1Help, for example, have steadily grown to annual revenues of Rs 22.5 crore ($3.2 million) and 12.1 crore ($1.7 million), respectively, for the year ended March 2018.

Both 1to1Help and Cadabams have very different models. The former, started in 2001, provides psychologists for wellness programmes run by large Indian and multinational companies. Founded in 1992, Cadabams, on the other hand, operates an inpatient psycho-social rehabilitation centre for various mental health issues like alcohol de-addiction and drug abuse. In both cases, patients can avoid paying out of pocket—through insurance, in the case of Cadabams, while employers pay for 1to1’s services. The other obvious commonality is that both are strictly offline.

It would be easy to simply chalk this down to an online versus offline battle, but it’s more complicated. A number of app-based mental health startups have popped up over the last few years, rapidly gaining popularity. They do not just offer therapy as a service but as a product, too. Apps like Touchkin’s Wysa and Mindcrescent’s InnerHour, which are seeing thousands of downloads each day, with Wysa claiming a user base of over 1 million.

Different strokes

Most accepted modern treatment options for mental disorders are pharmacotherapy or medication; physical activity; activity therapies like occupational therapy; expressive therapies like music, art and dance therapy; and psychotherapy

It may still be early days, but what accounts for these wildly differing fortunes that have seen apps become ubiquitous while marketplaces have struggled?

Juno’s journey

Two months in, Juno went from aggregating independent therapists to hiring them. A senior executive with Davman points to various quality issues the company faced with its original approach. At the service level, doctors would show up late, not take electronic notes, and their training wasn’t standardised.

While psychiatrists, he adds, are trained in medical colleges, psychologists simply hold a master’s degree in psychology, with no standard levels of quality. He had other concerns, too, like ensuring the privacy of the patients was protected since therapy is very sensitive. He asked not to be named as the company is currently planning to raise a new round of funding.

As of May 2018, in its quest for growth, the company had hired around 50 therapists, opened four physical centres, and was conducting 4,500 sessions a month till May last year. This wasn’t Juno’s redemption story though. This was it finding its feet.

Juno’s expenses for the year ended March 2018 stood at Rs 9.25 crore ($1.3 million), while its revenue for the same period stood at just Rs 1.6 crore ($229,146). Realising its cash burn was unsustainable, the business shut down all but one of its physical centres, shifting all of its sessions online today. While Juno is today down to just 1,600 sessions a month, the senior executive claims that the company is now operationally break even, with revenue remaining at around last year’s levels. The Ken could not independently ascertain this as the company hasn’t filed its results for the year ended March 2019.


Learning from mistakes

Juno’s journey is a decent example of what works and what definitely doesn’t when it comes to mental health care businesses built primarily on providing access to experts. For one, the common startup practice of burning cash in the quest for growth simply doesn’t work in a space this nascent and with as little societal acceptance.

Cricketer Robin Uthappa-backed HealthEminds, for example, which followed a similar model to Juno’s original curated marketplace approach also struggled to grow. One of its investors and advisors, Vishal Pereira, director of CreedCap Asia, said that two challenges for HealthEminds were the pressure from VC backers to grow too much too soon. While it struggled to meet its targets in terms of sessions, growing the supply in a country starved of mental health professionals also proved difficult.

Unlike Juno, which decided to scale down and grow organically, HealthEminds gave up the ghost. Earlier this year, it shut down commercial operations, although it is still run on a very small scale by its co-founder, Dr Sunita Maheshwari.

Pereira and the senior Davman executive both agree that online counselling removes the stigma associated with therapy. Additionally, says Pereira, if a company ends up empanelling therapists—psychiatrists, psychologists and counsellors—with vernacular language capabilities, the market for online therapy is big.

While Davman has survived, there are still obstacles in its journey. First, psychotropic drugs a psychiatrist would prescribe to a majority of her patients cannot be prescribed online. This takes away from the legitimacy of the service.

Then there’s the unwillingness to pay out-of-pocket for therapy. This is high in a primary care setting among patients who can afford it. While patients at an organisation like Cadabams usually have acute mental disorders and paid inpatient care is imperative, this isn’t the case for online services. Earlier this year, the insurance regulator asked insurers to cover inpatient mental healthcare, meaning centres like Cadabams are likely to gain further impetus. Meanwhile, 1to1Help sees traction as organisations are far more willing to pay for these services than individuals.

Investment in inpatient mental healthcare

In October last year, Rangsons Healthcare tapped into the inpatient mental healthcare market by inaugurating India’s first chain of super specialised neurocare centres for treating depression—‘Mindful TMS Neurocare’

An app a day

Even as the likes of Juno buckle down for a slow, uphill trudge forward, a series of app-based mental health startups are rapidly gaining traction. Healthtech startup Touchkin claims to have 1.2 million users for its mental health app Wysa, and says it is adding between 2,000 to 3,000 people every day. Mindcrescent, meanwhile, claimed to have 350,000 downloads of its Inner Hour app in a year, averaging out to roughly 1,000 sign-ups a day. Both apps are free and are used both within and outside India.

According to Ramakant Vempati, co-founder of Touchkin, apps that offer therapy as a product as well as service have a better chance of getting used because the demand for therapy alone is very limited in India.

Founder of Tata Trusts-funded app Trust Circle, Sachin Chaudhry recalls his brother’s schizophrenia diagnosis at the age of 12. The first obstacle in getting treatment, he believes, is awareness, the second is screening and the third is diagnosis. Treatment of the mental disorder comes after. Apps, therefore, are a great tool. They can be downloaded for free, and users can gauge their mental health based on some rudimentary in-app tests.

The focus, says Chaudhury, is on prevention and early intervention for all, not just those who are sick. It is through the layers of products—called tests, smiles and connect on the app—that one finally gets to the paid feature to access therapy—care. Between tests and care, is a spectrum of tools that help the user become more aware of their emotions and then connect with a group.

“Once people see how stressed, depressed or anxious they are, they can decide what to do with that information. Emotional graphs and mood monitors create awareness of emotions,” says Chaudhry, explaining the Trust Circle’s functioning. This awareness could, one day, lead to treatment.

Wysa, on the other hand, is promoted as a 4 AM friend and an artificial intelligence life coach. A bot where one can ask questions and receive suggestions. For instance, says Smriti Joshi, even though Wysa’s model is not very precise as it is still evolving, the bot is based on cognitive behaviour therapy (CBT), dialectical behaviour therapy (DBT) and motivational interviewing that have all proven to be effective in a wide range of disorders. Joshi is the chief psychologist at Wysa. Wysa also has tools targeted to curbing other negative feelings and thoughts. Mostly audio-based, these are usually less than 15-minutes-long.

A screenshot of Wysa app

In the first study to assess the effectiveness of Wysa app, researchers concluded the app helped in average mood improvement. However, more research is required to validate these initial findings in much larger samples and across longer periods.

Inner Hour, on the other hand, has developed programmes like a 28-day plan for management of anger, stress, worry, etc. This includes certain activities along with a chatbot meant for immediate support.

Two screenshots of InnerHour app


Support systems, not solutions

Joshi believes that online tools could indeed play a part in treating mental disorders. However, she is quick to admit that no tool on Touchkin’s Wysa can guarantee treatment or management of these mental disorders. However, using these tools regularly can help build positive coping skills to help manage difficult thoughts or emotions. It can offer wellness to those who do not have any mental disorders, but for those with mental health issues, it serves as a support to weekly sessions with a trained therapist.

Joshi says that once Wysa is downloaded, it first assesses the user’s mental health. Based on this, the app may suggest the person seek professional medical help instead. Unfortunately, says Joshi, most people do not heed this advice. Instead, they choose self-help tools on the app alone or in combination with text-based access to psychologists.

However, Wysa’s approach of suggesting offline therapy is not the norm in India. In January 2019, National Institute of Mental Health and Neuro Sciences (NIMHANS) reviewed 278 free apps for depression. A little over a third of these encouraged users to seek professional help.

Joshi talks to between 40-50 people every day via the app. “We ask them if they are professionally diagnosed, what are the barriers in them accessing professional help, and if we feel they need it, we encourage them to seek professional help,” says Joshi. By her estimates, about 75% of people she speaks to do not realise the intensity of their condition, lack social support or cannot afford therapy.

The appeal of these product-driven apps lies in the fact that they are constantly available and largely free to use. More importantly, they also get rid of the awkwardness of opening up about one’s issues with another person—mental health professional or otherwise. Most people that Joshi talks to do not talk about their emotions even with friends or family because they feel judged.

The fear of judgement, says Joshi, is a major reason many patients including Wysa users find it hard to seek daily therapy. An app, however, can create build trust and help people get used to sharing emotions. It can break barriers of loneliness and circumvent stigma.

Filling in

According to Amit Malik, who practised as a psychiatrist in the UK before founding Mumbai-based Mindcrescent, apps can also help mitigate the shortfall of mental health professionals. Online self-care programmes, says Malik, can develop scale and impact for a large sub-segment of this population early in their illnesses.

With the therapist-patient ratio askew, Malik believes that online products or tools intelligent enough to personalise therapy programmes can provide high-quality help and convince people of the value of therapy. All the while keeping costs low and providing help to millions of people who would never otherwise get it.

Touchkin, for instance, despite its vast reach, has hired only 7 psychologists for their ‘life coaching’ subscription service. It is a text-based chat service with a psychologist, who replies within a day.

But can these online services—either apps or e-clinics like Juno—replace the need for offline therapy entirely, though?

Mumbai-based clinical psychologist Dhruvita Mehta, who practices independently and with Juno Clinic, does prescribe some self-help tools that are offered by Wysa as well to her patients. But she says they aren’t enough on their own. “I would not want to use all the tools for all people. Some I would suggest becoming part of a group, some to try a new hobby or get a new job. Therapy is customised according to people,” she says.

Still, Mehta feels that platforms like Juno Clinic that offer professional therapy via audio-visual means online can be effective when the mental disorder is in the mild to moderate range. At Mehta’s clinic, however, 90% of patients are on medication prescribed by psychiatrists. This means they have acute mental health issues and need offline therapy sessions. Self-help tools or even online sessions can only do so much for them. “All of this helps, but mostly after people have been in therapy for two to three months,” she adds.

Still, the demand for Juno’s online sessions is organically growing between 10-15% every month, says the senior Davman executive quoted earlier. This executive hopes an inflexion point will come someday, exponentially growing the demand for therapy and allowing for a business with an offline and online presence to be built. Until that time comes though, a faceless world of self-help chatbots, audio programmes and tools will have to do.

India’s crops are feeling the heat in a warming world

Jagtar Singh lost his cotton crop twice. In just over two weeks. First, it was the rains that lashed Chaina village in Punjab’s Faridkot district in the first week of May, just after sowing. The unseasonal rains killed them before they could even germinate.

On second sowing, the seeds did germinate. But the crop couldn’t withstand the severe heatwave around 15-20 May, which again, was “extremely uncharacteristic” Singh says over the phone.

“Hundreds of farmers lost their entire crop in the village, which has never happened before.”

Earlier this year, a similar story played out with wheat. Kashmir Singh, a farmer from Gurdaspur, also in Punjab, says yields fell by 100 kg per acre across his 50-acre farm, leading to a loss of close to Rs 1 lakh. Wheat yields declined about 20% this year in the Malwa belt of Punjab due to warmer winter nights, says Umendra Dutt, executive director of Kheti Virasat Mission, a non-profit, though detailed data is sparse.

According to the Global Climate Risk Index 2019, India is the 14th most vulnerable nation in the world to the impacts of climate change, in between Niger (15th) and Antigua and Barbuda (13th).

With every increase in temperature of 1 degree Celsius, global wheat production is estimated to fall by 6%. India’s mean land surface air temperature in 2018 was 0.41 degrees Celsius above the 1981-2010 average, according to the Meteorological Department.

And agriculture in India, where six in 10 farmers rely on rains to water their crops, is becoming trickier every season as extreme weather events become more frequent. Warmer weather is altering crop seasons and harvest areas and also improving conditions for pests. Erratic rainfall is causing droughts across vast swathes of agricultural land and flooding in many other parts of the country.

All of this is changing just how everything from rice to apples is being grown—in the process threatening livelihoods and food security for decades to come.

Wheat feels the heat

The worst hit by changes in weather are the rabi or winter crops and fruits, say experts. Rising temperatures and warmer winter nights are causing a condition known as terminal heat stress which is hurting wheat production from Punjab in the north to Bihar in the east.

The wheat cycle is getting delayed due to a late harvest of rice as a result of the late onset of the monsoon. When it gets to the grain filling stage (when dry matter accumulates in the plant and ends up splitting into the grain, determining the grain weight), nights start getting warmer, which stunts the growth of the kernel, resulting in lower yields.

On the edge

61% of farmers in India rely on rain-fed agriculture and 55% of the gross cropped area is rainfed, making farming more vulnerable as the seasons grow more erratic

“Wheat is also facing frequent cases of frost-like conditions,” says S.K. Chaudhary, assistant director general (soil and water management), Indian Council of Agricultural Research, a state-run agency. “Even though wheat is a winter crop, if the temperature falls below 4 degrees Celsius and stays there for a week, it can damage the crop seriously,” Chaudhary says.

Changes in climate are expected to reduce the yields of irrigated wheat sown on time by about 6% in 2020, according to projections by the Indian Agricultural Research Institute (IARI). However, if you have to take into account late sowing, yields may fall by as much as 18% in the next year, and 23% by 2050.

Shuffling rice

Rising temperatures are also putting pressure on rice—a kharif or summer crop and one of India’s two staple grains, along with wheat.

In the east—West Bengal, Bihar, eastern Uttar Pradesh—farmers are facing frequent delays in the onset of monsoon rains which decreases productivity. (On Wednesday, India Meteorological Department declared that the onset of monsoon this year might be delayed by a week.)

“If the sowing window of rice is delayed by two weeks, the production might fall by up to 20%,” says an agronomist working in the private sector, requesting anonymity since she is not authorised to talk to the media.

IARI projections predict that irrigated rice yields are likely to fall 4% by next year, and 7% by 2050. Rainfed rice yields are estimated to decline by 6% in 2020, though improved productivity is expected to narrow that to 2.5% by 2050.

On the other hand, global warming has opened new areas for rice cultivation “We were never producing rice, traditionally,” says Kartar Singh, a farmer from Punjab. “The rising temperatures made it possible for us to grow rice.” Punjab today accounts for almost 10% of the country’s overall rice output—11 million tonnes out of the total 104.32 million tonnes in 2015-16.

The increasing concern with the crop, though, is that the wheat-rice agriculture system in Punjab is resulting in an alarming rate of ground water depletion. And farmers continue to grow rice because they get more subsidies from the government.

Bad apples

Warmer climes have seen the apple belt in the mountainous state of Himachal Pradesh to higher altitudes, according to Pramod Aggarwal, who leads the South Asia division of the CGIAR Research Program on Climate Change, Agriculture and Food Security. (CGIAR is an global organisation focused on food security, formerly called the Consultative Group for International Agricultural Research.) A decade ago, apple cultivation would have started at 1,250 metres above mean sea level—today, it’s been pushed to 2,500 metres.

Local apple varieties require “chilling”, or a period of cooler weather, to mature. And most of the traditional apple-growing areas are witnessing temperatures in the upper 20s as against the optimum 22-24 degrees Celsius. The changing patterns of rainfall and higher temperatures are altering the fruit’s development stage and resulting in sunburn and cracking.

On the other hand, though, newer technologies are being deployed to help “farmers grow low-chill varieties of apples, which don’t need much chilling,” says the agronomist quoted above. If these work out, apple production may end up shifting back to the lower hills.

Saffron burn

About 90% of the world’s saffron is grown in Iran. Another 7.3% is produced in the Indian state of Jammu and Kashmir. Or at least it used to be.

In the last few years, saffron cultivation there is under threat in the Pampore area and its neighbouring regions, which grow most of the state’s saffron. “Saffron is one of the most delicate plants and depends entirely on snowmelt,” says Shresth Tayal, a fellow at the Centre for Himalayan Ecology in The Energy and Resources Institute, who has studied glaciers and snowmelt in Kashmir.

“So if the snowfall is more or less, the productivity gets hurt. And with the weather in the region getting increasingly unpredictable, it is one of the worst affected crops,” Tayal says.

The land under saffron cultivation has decreased from around 5,800 hectares in the 1980s to below 3,700 hectares in 2016. In its glory days, the state would produce as much as 16 tonnes of saffron a year. (It takes around 150,000 flowers to produce 1 kg of the spice.) In the last few years, according to news reports, output has fallen to less than 1 tonne a year.

And the winner is, chickpea?

One of the rare beneficiaries of the changing climatic conditions in India is the chickpea. Originally a winter crop that was produced in the northern plains and central India, it lost favour to wheat after the Green Revolution—the modernisation of Indian agriculture in the 1960s—and the area under chickpea cultivation reduced drastically.

However, in the last couple of decades, cultivation picked up in states in the south and the west, such as Andhra Pradesh, Maharashtra and Karnataka. Which led to the development of short-duration (90-110 days) varieties that can withstand warmer, harsher weather conditions, with resistance against multiple diseases too.

As temperatures across the country rose, these hardier varieties have gained ground—production rose to 11.2 million tonnes in the 2017-18 crop season from 3.8 million tonnes in 2000-01.

“The potential in chickpea is huge, especially with the technological advancements. I won’t be surprised if production crosses 20 million tonnes by 2050,” says the agronomist quoted above.

The missing picture

“I doubt numbers will explain what is really happening in agriculture in India. All the examples are anecdotal,” says Chandra Bhushan, deputy director general of Centre for Science and Environment.

He is right. Despite similar stories of declining output from different parts of the country, overall agricultural output in India is increasing. Total foodgrain production, for instance, rose to 285 million tonnes in 2017-18 from 217 million tonnes in 2006-07.

The biggest reason behind the confusing statistics is the fact that India is divided into 127 different agro-climatic zones with different patterns of agriculture. The effects of extreme weather are localised and the decline in production in those areas is mitigated by the increase in production elsewhere.

“The yield potential of many crops, including pulses and cereals, is as high as four-five times their current output,” says Arabinda Kumar Padhee, director, country relations and business affairs, International Crops Research Institute for the Semi-Arid Tropics, or ICRISAT. “So yields may rise overall despite damage due to weather conditions.”

Productivity, he adds, shouldn’t be the only monitorable parameter to look at the impact of climate change.

Fragmented landscape

Over 80% of Indian farmers are smallholders, according to the Agriculture Census, who farm on less than two hectares of land, making data sampling extremely difficult

Irrigational water, for example, is a big variable. “Whenever we talk about the future production, we assume that the water level will be at the current level, which is not possible,” Padhee says. “Average annual rainfall might not have changed drastically but there are extreme patterns. Rains are getting heavier when they fall. Moderate rainfall days are decreasing and there are prolonged drier spells.”

“I have been asking scientists how the increase in temperature is affecting soil moisture but I haven’t yet got a satisfactory answer,” says the agronomist quoted earlier. “People are telling me that even if we don’t have enough moisture in the soil, we are providing for that through irrigation. But that is hurting profits and putting more stress on farmers.”

More localised research and more extensive data sets are some of the first steps towards getting Indian agriculture ready for a climate crisis. And prepare we must.

Bracing for the storm

The rise in temperature by 1 degree Celsius can result in farmers’ income declining by about 6% in unirrigated districts, according to the Economic Survey of India for 2017-18. The survey also predicts that temperatures in India are likely to rise by 3-4 degrees Celsius by the end of the 21st century.

India could face an agricultural loss of over $7 billion by 2030, according to the Intergovernmental Panel on Climate Change. But if climate resilience measures in the form adaptive strategies are implemented, 80% of the losses could be averted.

One very valuable tool would be real-time weather and crop advisories to mitigate risks. Take rice, for example, which is an important but extremely water-intensive kharif or summer crop. If the farmer misses out on the sowing window, which is increasingly becoming the norm due to the delayed onset of the monsoon rains, yields may decline by 20-25%.

“Farmers should know that even if they have missed the sowing window, there still are some variants that they can cultivate without impacting yields much,” says the agronomist quoted above. The crop advisories that farmers get right now—mostly issued by the government—are obsolete and based on decades-old practices.

In April this year, the Meteorological Department said it is working at a brisk pace to issue localised weather forecasting to all 6,500 blocks across 660 districts in the country by 2020.

Farmers also need to adjust their cropping, switching to more heat-resistant varieties of the same plants, shifting sowing dates to avoid the hottest months of the year, or changing crops entirely.

“In the semi-arid areas, farmers are adopting crops such as cotton instead of more weather resilient cereals, anticipating higher results but also facing a high risk of failure,” says Anthony Whitbread, a research programme director at ICRISAT. “They should be educated to adapt to sorghum, millets or pulses to mitigate the risks.”

Simultaneously, scientists are looking at developing more stress-tolerant variants of crops. Between 2006 and 2018, for instance, close to 550 high-yielding climate-resilient crop varieties were developed by ICAR and notified for commercial cultivation.

“We are also developing short duration crops to help farmers against the shorter sowing windows,” says ICAR’s S.K. Chaudhary. “Moong (green gram), for example, takes about 80-90 days from sowing to harvest. We are now trying to develop cultivars that take only 50 days to harvest.”

Back in Faridkot, Jagtar Singh has sown cotton for the third time in the last week of May. “There was still some sowing window left for the crop. But if this gets destroyed again, then I will have to drop the plan entirely,” he says. In that case, Singh says, he will switch to growing cowpea.

For now though, the cotton plants are doing fine and Singh is keeping his fingers crossed.

Much ado about India’s health insurance 2.0 *conditions apply

The Narendra Modi-led government has made a comeback in India. For healthcare, its second-term return greenlights an ambitious health insurance scheme—Ayushman Bharat. The government, over the next five years, intends to provide health insurance cover to the 500 million poorest in the country. Meanwhile, private insurers have a plan of their own. To boost the most profitable kind of health insurance—the one that individuals buy.

There is tremendous scope for health insurance in general to grow, but individually-bought health insurance is the most unpenetrated market right now. Indians with disposable incomes have opened their wallets for fast-growing industries such as e-commerce and fintech over the past five years. Investors are now betting that the next five will be the right time for insurance, especially health, to become a want. Not just a need that corporations and the government traditionally provide.

Divya Sehgal, an investor, goes as far as using American psychologist Abraham Maslow’s ‘hierarchy of needs’ pyramid theory to explain the motivation behind investing in health insurance. Sehgal is a partner with the PE firm True North which bought a 51% stake in insurer Max Bupa in February this year.

Now, according to Maslow’s theory, once the human needs for food, shelter and clothing are met, safety comes next. “Every person would spend more on premium to cover themselves from basic risks,” Sehgal says. Insurance, particularly health, may have been a low priority for Indians up until now (as it is an evolved need), but this would change as purchasing power rises, he expects. The evidence supports the hypothesis. Life, motor and other general insurances are not as high a priority on Maslow’s pyramid, and so, they’re seeing relatively slower growth.

This vision isn’t limited to Sehgal either. A consortium, led by Mauritius-based investment firm WestBridge Capital and Indian billionaire Rakesh Jhunjhunwala, got approval from the government’s statutory body Competition Commission of India (CCI) to buy over 90% stake in health insurer Star Health in April this year. Similarly, private equity TPG-backed hospital chain Manipal Hospitals bought out the 31.5% stake of Indian business group TTK from Cigna TTK health insurance, resulting in a name change to Manipal Cigna in the first week of this month. HDFC Ergo general insurance, meanwhile, has been in discussion to buy a stake in health insurer Apollo Munich over the last few months, said an employee of the insurance company. Reliance Capital got approval for a health insurance company back in October 2018. According to two persons in the know, the Mumbai-based conglomerate Bajaj Group (that operates Bajaj Allianz General Insurance) has, since 2001, been planning to launch a standalone health insurance company. However, the company itself hasn’t confirmed this.

All of them expect younger Indians to fall sick more often as time progresses. They realise the importance of health insurance—inpatient and outpatient. California-based fitness technology venture GOQii that manufacturers wearable fitness band indicated that 38.3% of people between the age group of 20-45 suffer from at least one lifestyle disease ranging from diabetes, high blood pressure, cardiac issues to thyroid, acute gastrointestinal issues and acidity; and this number could go up by another 15%, as per India Fit Report 2019. The health insurers plan on aggressively getting Indians to buy health insurance and incentivising fitness by offering discounts on premiums.

However, as one of the former senior executives of a leading health insurer put it, “Insurance is neither e-commerce nor fintech. It is hard to sell the promise of security for risk one cannot imagine and even harder to make it profitable when it reaches high scale.” He requested anonymity as he is bound by a non-disclosure agreement.

FDI limit deters growth

Many foreign investors are wary of investing in Indian insurance because only 49% foreign direct investment is allowed. It means the investor would have to take more risk with less operational control

Even with plans for aggressive growth, health insurers are nowhere close to the finish line. Let’s look at hard numbers. True North plans to grow Max Bupa by 5X in the next six-eight years by focusing on providing health insurance to individuals. Similarly, health insurers that The Ken spoke to expect the individual insurance business to grow from the current 33 million users to 150 million over the next five years. Now, both individual and group businesses have about doubled during the last five year period; with the optimistic 5X growth expectation, for both group and individuals, 600 million (450 million group health insurance users) would be insured. Add this to Ayushman Bharat’s targeted 500 million. Together, the projected 1.1 billion insured would cover about three-fourths of the expected Indian population of 1.4 billion in 2024.

Sounds great. But these are optimistic targets. In reality, the health insurers plan to grow not just by adding more users but, in part, by adding more value-added services to their current users’ schemes and focusing on the profitable individual business rather than the loss-making group business.

Aiming for high cover, low claims

The most profitable business is the individual business, but it is the hardest to scale. Group business and government schemes bring in scale, but since the premiums are negotiated, they often result in losses. Which is why Sehgal sees a growth story “overwhelmingly higher than other health insurers” in Max Bupa, as over 97% of its business comes from individuals, which keeps the claims ratio under control. Sehgal believes now is the time to boost individual health insurance sales and increase True North’s value of Rs 1,001 crore ($144 million) to over Rs 5,000 crore ($719.6 million) in the next six to eight years.

To achieve that, he plans to digitise more processes and start innovation in a new category—outpatient (OPD) insurance, which would be an uphill climb for True North.

Indirect foreign investment in OPD

Aetna, American-managed healthcare company that also sells health insurance, entered India in 2016 by making its first investment of Rs 100 crore to expand an OPD subscription product. The product was developed by the Indian Health Organisation (IHO) which offers primary care, discounts on pharmacy and diagnostic bills and most importantly, medical advice. Aetna had acquired IHO in 2011.

The apprehension around promoting new innovation is low in insurance because of the probability of high claims ratio, points out Prashant Tandon, co-founder and CEO of e-pharmacy 1mg that has tied up with Max Bupa and general insurer ICICI Lombard to manage their new OPD insurance products. Health insurance has faced high claims ratios in the past; the OPD is more susceptible to overuse, high claims and high payouts once patients start to demand regular doctor appointments and diagnostic tests. Which is why insurers are still testing the waters. Tandon does not share any numbers but says it is only recently that those who have bought the OPD policy have started filing claims at 1mg for medicines and diagnostics.

For now, the insurers are just trying to upgrade existing users to higher-value products, said an ex-senior executive with a health insurance company, who requested anonymity due to a non-disclosure agreement. Although almost all insurers have applied for approval for OPD insurance products with the insurance regulator, none have started marketing these products to the masses, he added. The Ken has previously reported that Max Bupa, Apollo Munich and ICICI Lombard had launched their products and that the PolicyBazaar Group had planned to start marketing its OPD product by the end of last year. They’re all yet to advertise their products. Once they do, it would mean developing a distribution network to expand coverage as the online direct sale of health insurance is still low in India. True North plans to expand from its current metro cities focus to every city with 2 million+ population.

A person, not a car

Vaidyanathan Ramani, head of product and innovation with PolicyBazaar, believes that even though the opportunity in health insurance has been evident for about a decade, there has also been a lot of apprehension about selling it.

Star Health—the first and the largest standalone health insurer, founded in 2006—did prove that health insurance was a big market, provided you knew how to sell it – but the general thinking was that health is more difficult than motor, fire, etc to underwrite and to sell, Ramani said. Everyone expected health insurance to grow faster than motor insurance as health is a basic need, not a car or a two-wheeler, he added. The prediction has come true despite motor insurance being mandatory in India. And about half a dozen standalone health insurers have made all the difference by expanding health insurance coverage faster than about a dozen general insurers that sell motor, fire and other forms of insurance in addition to health. If any players can expand health insurance coverage while controlling claims ratio, the best bet are standalone health insurers such as Max Bupa, Manipal Cigna and Star Health, believe investors.

General insurance companies, which are allowed to sell various non-life insurance products, have been unable to grow as fast as standalone health insurance companies (SAHIs) such as Apollo Munich and Max Bupa. Ramani, who was head of strategy with Royal Sundaram General Insurance before he joined PolicyBazaar, says that the reason is that travel, home, motor, etc insurances are managed in one way and health in another.

For instance, a motor insurance premium can be estimated based on the quality of the car and how one drives it, but not health insurance. “I am burdened with you for 365 days till you come for renewal next year. If I feel I have made a wrong call with you, I price you correctly next year. In health insurance, you are with me till you die and I can’t leave you and I know you are only going to grow old and fall ill more often. I will price thinking what will happen to you for the next 25 years,” Ramani explained. The variables in health insurance are very high as one can be affected by mild to severe communicable, non-communicable and lifestyle diseases; healthcare costs can increase more than expected and one can fall ill anytime between the first or the 25th year, he added.

In health insurance, you are with me till you die and I can’t leave you

Vaidyanathan Ramani, PolicyBazaar

These are the few reasons why general insurers have focused on providing group insurance to companies that make a promise of one year and bring in a large customer base to grow, but they have now realised that these are very competitive and are often unprofitable. A former senior executive with a third-party administrator (TPA) (which administers policies for health insurers) said that these factors led health insurers to harden premiums about two years ago. When the premiums almost tripled in some cases, for instance from a Rs 700 ($10) premium for a basic Rs 1 lakh ($1,439) policy, the average premium rose to above Rs 3,000 ($43), she added.

She also pointed out that one of the reasons SAHIs have grown faster than general insurers in the health segment is because they carry brand names of hospitals such Max, Apollo and Religare (which belongs to the same group as Fortis Hospitals). Going forward though they may have it rough as True North plans to phase out the hospital brand name Max. Inversely, if the insurance regulator allows HDFC Bank’s joint venture with Germany based insurance group Ergo to acquire India’s largest hospital chain Apollo’s stake in Apollo Munich, it would suffer from a loss of branding.

No one recognises Apollo Munich, they just recognise Apollo. It grew due to the brand. Further, Apollo experimented a few products and initiatives in hospitals before taking them to the market

Former employee with Apollo Munich

The former senior executive with a health insurance company, quoted above, calls it a chicken and egg situation. (The executive recently left the company to build a chronic disease management company that could work with health insurers in the future.) Traditionally, insurance has been driven by TPAs, agents and banks;  health insurers don’t believe in grand marketing, as it is rare for anyone to go buy insurance. People would much rather put it off for another day. It is a market that requires patient capital, he adds. PEs are buying into these companies, he says, adding that they will soon realise “selling anything in India is hard but selling insurance is the hardest”.

Correction: An earlier version of this story inadvertently attributed quotes by Divya Sehgal of True North to Ashish Chandra (of True Cover). Additionally, the word Group has been added to PolicyBazaar with regard to its OPD plans, for greater clarity. We regret the errors.

Local with solar: As China goes cheap, India loses the beat

When China sneezes, as the (modified) adage goes, the world catches a cold. And India, at least when we’re talking about solar power, is today the first to start sniffling.

The year 2018-19 was a special one for India’s solar industry. For the first time since 2014, new installations of solar power declined, by about 10%. To put that in context, installations had roughly doubled in each of the two previous years.

The obvious reason was a set of safeguard duties imposed on imports of solar equipment starting July 2018. Intended to insulate domestic manufacturers from cheaper Chinese solar modules, the move drove developers to halt plans for new solar plants.

A seemingly straightforward tale of a protectionist policy that backfired. But behind it lies a complex interplay that results in Chinese policy effectively dictating the dynamics of the Indian solar industry.

And with Indian policymakers unable to put together anything more than a piecemeal response, the country’s vaunted National Solar Mission—with an ambitious goal of 100 GW of solar power generating capacity by 2022—is lumbering along, far short of its targets.

The China shadow

The Chinese government, over the past two decades, has progressively increased support to expand both renewable energy generation and equipment manufacturing.

By 2012, China-based solar module makers had enough capacity to supply the entire world’s solar panel needs. The resulting glut in the early 2010s led to the collapse of several Chinese—as well as American and European—manufacturers. Both the US and the European Union had slapped anti-dumping and anti-subsidy tariffs on Chinese solar cells and modules by the end of 2014. Undeterred, Chinese companies set their sights on a new, rapidly growing market—India.

The Narendra Modi government in 2015 raised the country’s solar capacity target to the current 100 GW from the earlier 20 GW. (As part of a bigger renewable energy target of 175 GW from solar, wind and small hydropower projects by 2022.) India rose to become China’s biggest solar export market in 2017, accounting for about 30% of shipments by Chinese manufacturers.

Full house

Nine of the top 10 manufacturers in the world are based in China; the sole exception is South Korean company Hanwha Q-Cells

Much as in the US and Europe before, cheap Chinese equipment drove down costs for developers, giving India some of the lowest prices for solar-based electricity tariffs in the world. Tariffs fell to less than Rs 3 ($0.04) per kilowatt-hour as companies bid furiously for projects in 2016 and 2017, as imports accounted for about 90% of module sales.

But last year, something happened. China sneezed.

In May 2018, the Chinese government abruptly announced that it was ending all subsidies for solar power. Any new solar plants would have to make do without aid from the state. Chinese solar equipment makers, which accounted for 70% of global solar module shipments in 2018, rushed to the international markets.

Prices plummeted, and this could have been a godsend for Indian power producers and a nightmare for local panel makers already unable to match Chinese prices. But, at the same time, Indian trade authorities, which had been investigating the effect of Chinese solar imports since 2017, announced a 25% safeguard duty to protect local manufacturers.

We already know what happened next. Power producers, already struggling with the record low tariffs as a result of bidding wars in previous years, decided to wait out the safeguard duty. Imports more than halved in 2018-19 to $1.7 billion from $3.42 billion the previous fiscal year.

But that figure doesn’t tell us everything. Lower prices meant that even though imports, in terms of value, declined steeply, volumes fell only by a modest 9.6%. And therein lies the rub for India’s dreams of local manufacturing.

Weak sauce

While prices of locally-made solar modules have steadily dropped over the past four years, Indian manufacturers are still far short of Chinese economies of scale. While Indian modules cost an average of about $0.26-0.27 (Rs 18-19) per watt, imported modules average $0.20-0.22 (Rs 13-15) per watt. Even with a 25% safeguard duty, Indian companies are barely able to match prices.

One reason is that most modules made in India are simply assembled from solar cells imported from, well, China.

The solar power supply chain goes something like this: First come wafers or ingots of silicon, which are used to make cells, which are put together to make a module or panel. Few Indian manufacturers produce solar cells (the basic unit of a panel), and even those that do ultimately use wafers (the raw material) from China.

“Paradoxically, the duties on imported modules is much lower than those on glass, EVA and most of the other raw materials that go into manufacturing a module. Without enough of domestic production of EVA and other raw materials in the country to meet module manufacturers’ demand, this will only increase the cost and hurt businesses as well as customers,” says Hitesh Doshi, a founding member of All India Solar Industries Association.

With India’s safeguard duty falling to 20% next month, and 15% next year, Indian manufacturers may soon find themselves back at square one. “Many developers now are just postponing their purchases till the safeguard duty drops to 15%, or phases out entirely,” says Kanika Chawla, director of the centre for energy finance at the Council on Energy, Environment and Water (CEEW).

Which brings us back to China. Earlier this year, the Chinese government moved to reinstate some of its solar subsidies and phase them out over time. How this plays out will dictate, in large part, what happens to Indian industry.

“The biggest variable, or unpredictable element, is China. Even today, it’s not really clear what the Chinese programme is, over what period of time it will be spaced out, etc.,” says Vinay Rustagi, managing director of renewable energy consultancy Bridge to India. Chinese capacity addition is expected to rise this year, he says, with module prices remaining largely stable.

“But if Chinese demand undershoots, it will have a direct and immediate impact. Prices could easily drop by up to $0.02 (Rs 1.40),” Rustagi adds.

And in the first three months of 2019, Chinese capacity addition has been sluggish, at 5.2 GW, down 40% from about 9.6 GW in the same period last year.

Endgame

“Tariffs in India are currently not viable,” says CEEW’s Chawla. Price ceilings set by the government have resulted in tepid response at recent auctions and tenders. One auction for solar and wind projects last month saw only two bidders. And in total, while the central and state governments in 2018 had put up tenders to build over 50 GW of solar plants, only 13 GW of projects were actually awarded, according to a CEEW paper co-authored by Chawla.

Power producers will continue to wait out the safeguard duty, and manufacturers are unlikely to be able to pick up the slack in the meantime, Chawla adds. “China developed its manufacturing base first, then built demand.” The Chinese government provided support from low-cost loans to infrastructure to even electricity prices.

Chinese companies were able to develop both scale and capability. Indian manufacturers’ total manufacturing capacity is a little less than 9 GW of solar modules a year (far short of the 20 GW of annual targeted capacity addition), according to CEEW. Chinese manufacturers produced nearly 40 GW of modules in the first half of 2018 alone.

Nevertheless, solar installations will pick up again in 2019 and over the next few years, according to projections from Mercom India, a clean energy consulting firm. But tellingly, its estimates put India’s total solar power generating capacity at about 70 GW of the 100 GW target by 2022. (Utility-scale solar projects, though, aren’t going to get back to 2017’s peak for the next three years at least, according to Mercom’s forecasts.)

The government continues to trumpet its renewable energy programme, with power minister R K Singh saying on Tuesday that it’s on track to meet its 175 GW clean energy target (including the 100 GW from solar) by 2022.

To be fair, the state has also announced initiatives such as a viability gap funding scheme in February, which would allot Rs 8,580 crore ($1.23 billion).

Government-owned enterprises can use the funding to set up 12 GW of solar power using Indian-made panels, between 2019-20 and 2022-23. This is apart from existing incentives for electronics manufacturing and a plan to link solar power tenders to manufacturing.

Line of credit

Chinese manufacturers get cheap debt at 3-4%, a source of competitive advantage against Indian firms who pay rates as high as 11-12%

The solar industry and analysts, though, largely remain sceptical about these schemes. Setting up manufacturing, it goes without saying, is a capital-intensive process, and uncertainty over India’s solar policies make long-term investments tough to swallow.

The manufacture of photovoltaics—electricity-generating solar cells and panels—in India “suffers from a range of competitive disadvantages… These include inferior terms of debt capital, higher electricity prices, lower-scale operations, lack of vertical integration, outdated technology, and lack of demand visibility,” according to the CEEW paper cited earlier.

In the end, India’s solar march goes on. But unless local manufacturing policies get a radical overhaul, it will still be to China’s drumbeat.

With inputs from Pranav Balakrishnan and Pranav Shankar.

Biomedical waste could be India’s ticking bomb—or a thriving market

Uttar Pradesh, India’s most populous state and one of its poorest, hasn’t had the best track record in terms of medical facilities. Most infamously, 30 children died in the main government hospital in the district of Gorakhpur in 2017 due to a lack of oxygen cylinders. In January, the same hospital, Baba Raghav Das Medical College, was fined Rs 5 crore ($720,000) by the National Green Tribunal for improper disposal and burning of biomedical waste this January.

The problem of biomedical waste disposal isn’t new to Gorakhpur, nor limited to it. In 2016, Gaurav Srivastava filed a Right to Information, or RTI, request to find out how many biomedical waste treatment facilities existed in Gorakhpur and three nearby districts. 34-year-old Srivastava, who formerly worked on climate change issues and as an environmental auditor in the state, received a damning response—zero.

Little has changed since. Uttar Pradesh, as on 25 July 2018, had 525 violations of the Biomedical Waste Management Rules by healthcare facilities and treatment facilities. And while it may be one of the worst offenders, biomedical waste disposal is a nationwide issue.

India has a problem—it generates more biomedical waste than it can process. According to 2017 data from the Central Pollution Control Board (CPCB), India generates 559 tonnes of biomedical waste a day. The CPCB says that 92.84% of this waste is processed properly, either incinerated or sterilised and buried by independent treatment facilities or by hospitals.

The remaining 7% or so, however, goes untreated—that’s 41 tonnes of waste a day, or nearly 15,000 tonnes a year. Without proper treatment, and with reports aplenty of biomedical waste being mixed in with municipal garbage, India is staring at a potential biohazard crisis.

Among the types of infections caused by biomedical waste are gastrointestinal transmitted by faeces or vomit, respiratory infections caused by saliva and mucous, and eye infections caused by infected eye secretions. Inadequate waste management, apart from causing environmental pollution may lead to transmission of diseases like typhoid, cholera, hepatitis and AIDS through needles contaminated with infected blood.   

Poor management of medical waste risks polluting water, air and soil.  

The environment ministry in February this year updated the 2016 biomedical waste regulations. The idea was to improve compliance and strengthen implementation as healthcare facilities are not segregating medical waste diligently and handing it over to facilities.

But there are no punishments, not even heavy fines, under the current regulations. Only a show-cause notice or suspension of licence by the district magistrate. The lack of stringent punishments is one of the reasons why these rules have been criticised as ineffective.

On the flip side, market research firm Novonous forecasts that as India’s hospital capacity expands, the biomedical waste management market will grow at an annualised 8.41% till 2025. And it will grow on the backs of Srivastava and a slew of entrepreneurs and companies across the country who have made biomedical waste disposal their business.

After the response to his RTI, Srivastava registered a startup called Gorakhpur BioSerV Energy Pvt. Ltd to cater to Gorakhpur’s district hospital, a railway hospital and, of course, Baba Raghav Das Medical College. In addition, he would also cater to smaller nursing homes and clinics that have nowhere else to treat their waste.

But for the past three years though, he has been running from pillar to post to get his business off the ground. And even as Srivastava struggles, the number of waste treatment facilities in India has remained largely stagnant. In fact, it’s been that way since 2010. Inconsistently enforced and often-amended regulations, lack of governmental support, and healthcare centres that bend the rules threaten to derail whatever opportunity the market presents, while simultaneously creating a health and environment crisis.

Little fish, big fish

“In my opinion, except for the big players, setting up facilities is extremely difficult,” says Seshi Reddy, assistant general manager at Hyderabad-based Medicare Environmental Management, India’s largest biomedical waste management company.

Owned by the Ramky Group, a conglomerate that also has interests in infrastructure, real estate and pharmaceuticals, Medicare is over two decades old and has over 50,000 clients across India. Its clientele spans government, corporate, diagnostic and pathology clinics, dental and veterinary labs, and its 18 facilities across 12 states can process 200 tonnes of waste a day.

But Medicare is an outlier. Biomedical waste management is a cutthroat business, with compliance and competition among the main challenges, says Reddy. With every change in rules and specifications, costs go up. For hospitals, clinics and labs, however, it’s just another expense to be minimised—and the lowest bidder wins. Consequently, returns on investment are low; Medicare, which was incorporated in 1997, broke even in 2005, says Reddy.

The government does offer financial aid to make it easier for companies—especially small-scale entrepreneurs—to set up common treatment facilities for biomedical waste. The environment ministry funds 25% of the total project cost—up to Rs 1 crore ($144,000). (The north-eastern states are a special category, where the central and state governments together cover up to 75% of project costs.)

But before all that, another huge hurdle—and perhaps the reason why the number of waste treatment facilities hasn’t grown in nearly a decade—is land.

No man’s land

“The most critical aspect for setting up such a facility is land availability because according to the rules, it should be far from the population and no water body should be near the plant,” says Srivastava. These facilities come under the hazardous industries category and require environmental clearance.

The regulations say that state governments have to identify appropriate land and allot it either free of cost or at a concessional rate. The bureaucratic maze, though, ensures this doesn’t happen.

To start with, project proposals go to the hazardous substances management division of the environment ministry, which decides on financial aid. Once that’s cleared, though, the buck passes to the respective state government land-owning agency. With no real coordination between the environment ministry, the CPCB and the state-level agency, many projects get stuck waiting for land.

“The procedure to acquire land to set up new facilities is so long drawn out that private companies become tired and bow out finally,” complains Vinod P, president of the Common Biomedical Waste Treatment Facilities Association of India (CBWTFAI).

But to cap it all off, what may be the biggest hurdle to the growth of the waste management industry is the simple fact that most of their potential clients just don’t follow the rules. And the government has so far done little to change that at scale.

What compliance?

The government set a deadline of 27 March this year to phase out chlorinated plastic bags and gloves, establish a barcode system for waste generators and operators, install Global Positioning System (GPS) units in vehicles transporting waste to treatment facilities, and ensure pre-treatment of unsanitary waste water through disinfection. None of this has been implemented on the ground, according to executives of waste management companies and government officials.

Additionally, before 2016, if any healthcare facility was not treating more than 1,000 patients per month, they weren’t required to get authorisation from pollution control boards. With the new rules, every waste generator had to be registered with their respective state pollution control boards.

“60% of healthcare facilities are non-bedded and previously only bedded facilities were required to take authorisation but now everybody is required to take one,” says Vinod. And according to the rules, a healthcare facility also cannot get registered or obtain licences from state authorities without tying up with common biomedical waste treatment facilities.

However, in March, the National Green Tribunal noted that non-compliance was widespread and asked states to give status reports by 30 April, or be forced to deposit Rs 1 crore every month with the CPCB. Sample this: Out of 2.38 lakh healthcare facilities in the country, only 30% have authorisation.

The application for authorisation is exhaustive and provides the authorities with all information like the treatment facility a hospital has tied up with and the waste it generates etc. A CPCB scientist said that they are yet to get data from 1.51 lakh non-bedded facilities in the country and have no idea where their waste is going.

CPCB member secretary Prashant Gargava did not respond to repeated calls from The Ken on whether the tribunal’s ruling has been enforced.

Medicare’s Reddy points out that most of his clients still haven’t been authorised by their respective state pollution control boards. “For example, 5,200 are registered as my customers in Bangalore alone and they are taking my services, but 80% have not taken authorisation from state pollution control board,” he says.

And about half of non-hospital healthcare facilities—the thousands of polyclinics and diagnostic centres across India—have not tied up with waste treatment facilities, adds Medicare’s Reddy. “Veterinary centres are worse, only 2% or 3% have tie-ups with waste treatment facilities.”

A senior environment officer from Karnataka State Pollution Control Board said that AYUSH facilities are reluctant to take authorisation as they argue that they don’t generate as much biomedical waste as allopathic ones do.

This is a particularly sticky point for waste management: The larger hospitals and healthcare facilities either work with separate treatment companies or have their own in-house treatment centres. But the smaller clinics and pathology labs continue to either dump medical waste along with other garbage or bury it without proper sterilisation.

Bad as all this is, the likes of Medicare aren’t stopping.

New prospects and a troubled future

One of the biggest potential shifts that waste treatment firms see today is residential medical waste. “All these days, we were focussing only on medical waste from healthcare facilities,” Reddy says.

“Residential sector is generating more medical waste than the healthcare sector.”

Seshi Reddy, Assistant General Manager, Medicare

A few years ago, Medicare started a pilot project in Bengaluru, which has a population of 12 million, to collect household medical waste from two zones in the city—Yelahanka and the West Zone. In these two zones alone, the company is collecting 2.5 tonnes medical waste from residences per day.

The medical waste from houses includes sanitary napkins, earbuds and nails, and objects contaminated with blood and body fluid contaminated which are otherwise mixed with solid waste. Medicare is focusing on gated communities and apartments, and is charging Rs 35 ($0.5) per house per month. The company has signed on 500,000 households, and estimates that it will get 750 grams of medical waste from one family per month on an average. (Families with diaper-wearing children generate 2.5 kg of waste per day for two children. Without children, sanitary napkins account for 500 grams of waste per month per family.)

More recently in May this year, the Bruhat Bengaluru Mahanagara Palike (BBMP) put out a tender to process biomedical waste for 9.6 million houses in the city—an estimated 40 tonnes of medical waste. Similar initiatives have also been started in Pune and Indore.

“We are submitting our bid for the tender,” Reddy said.

CBWTFAI’s Vinod, however, is more cautious about the market potential of the biomedical waste sector in India. “Day by day the rules are being tightened by the government. It wants to have limited facilities so that it can have a control,” he says.

Vinod owns a facility in Gujarat. Of 33 districts in the state, seven districts do not have more than 200 healthcare facilities. “When our investment is Rs 5 crore ($720,000) to Rs 7 crore ($1 million) and I have to spend on transportation, it is not viable.” Without scale—about 10,000 hospital beds worth of clients, by most estimates—the unit economics just don’t work for a standalone treatment plant.

Most of the facilities are not running to their full capacity and only 70% to 80% of their capacity is being utilised. “If the facilities are run to their full capacity then they will start getting a return on investment of 8-10%. Now they are either just breaking even or getting an ROI of 5-7%,” says Vinod.

Back in Gorakhpur, Srivastava and his team of four are still pushing for their planned treatment plant. “Our plan is to make this economically viable and generate additional sources of revenue apart from disposal charges from healthcare facilities so others can replicate as well,” he says.

Which brings us to India’s fundamental problem—the medical waste we produce is ballooning. By 2022, the country is projected to hit 775 tonnes of medical waste per day, up almost 40% from today. At least. Because the real numbers may be even worse.

According to a scientist working with the CPCB, the board is struggling to measure the waste generated by non-bedded hospitals—healthcare facilities that don’t have in-patient departments. “The quantity of waste generated will increase significantly once we get this data,” he said, asking not to be named.

Our insufficient supply side isn’t prepared for this, because it just isn’t a viable business. Without the government actually enforcing biomedical waste regulations, and forcing healthcare facilities of all hues to get on board, the waste treatment sector is unlikely to grow beyond the big hospitals it already covers. 

Zomato, Swiggy and food delivery in the age of plastics

Deep in the recesses of GPRA Complex, New Moti Bagh—an upscale, gated colony for civil servants—lies a sewage treatment and waste management plant. This is Delhi’s first zero-waste area, run by Green Planet Waste Management (GPWM).

Smack dab between GPWM’s wastewater treatment and composting centres is a shed where non-recyclable plastic herded from GPRA Complex is turned to oil. This is done through a process called pyrolysis. It’s where the dankest plastic goes to die: milk packets, water bottle labels, torn, oil-stained styrofoam, and dust-laden carry bags. 

About 10% of the daily 50-odd kilos of plastic fed to this pyrolysis plant are disposable trays, food pouches, and cutlery, the kind Rajesh Mittal has seen more of in recent years thanks to food delivery.

“It’s only around 10% here because this is a high-end colony and every household has a cook,” says a bespectacled Mittal, GPWM’s managing director. “You’ll see more food containers in places like Noida, or places with a relatively higher younger, unmarried demographic. The kind of plastic generated varies from area to area and the local demographic.”

You probably know this now: we’re living in what environmentalists dub ‘The Plasticene’ (Age of plastic). Plastic, relative to metal and paper, is a young material, first finding form as Bakelite in 1907 and gaining ground because of the exigencies of war. Its affordability, portability, and disposability, once our boons, are now banes bar none. As of 2017, the world produced 350 million tonnes of plastic (excluding PET or Polyethylene Terephthalate—reusable packaging mostly for liquids).

And in an increasingly-tired world, where longer working hours marry technology and birth convenience, food containers are the new delinquents. As per a 2018 study published in science journal Elsevier, door-to-door food delivery in China accounted for a nearly-eightfold jump in packaging waste in just two years, from 0.2 million tonnes (2015) to 1.5 million tonnes (2017). Closer home, in India, we don’t know how much plastic we generate. That’s because the Central Pollution Control Board (CPCB) underreports such data. But we can hazard some guesses with food delivery.

In October 2018, restaurant discovery and food delivery service Zomato claimed to fulfil 23 million monthly food orders. Its rival Swiggy, which does not disclose monthly order numbers, is believed to fulfil up to 28 million orders as of March 2019. This amounts to thousands and thousands of tonnes of food container and cutlery waste, at the least. 

Small wonder then that Bruhat Bengaluru Mahanagara Palike (BBMP), Bengaluru’s civic body, wants to ban plastic food containers. Bans on single-use plastics in Maharashtra and Tamil Nadu, meanwhile, are ineffectual due to inconsistent implementation. In a bid to seem self-aware, Zomato introduced an opt-out feature for customers to avoid plastic cutlery. Swiggy, on the other hand, put the ball in the court of restaurants with its Swiggy Packaging Assist (SPA) platform, which aims to offer more eco-friendly packaging options.

For all its cheapness, plastic is a complex material. To understand how culpable food delivery is or isn’t in its propagation, we need to enter the proverbial ant farm to observe how aggregation, customer ratings, policy blindness, waste monetisation, and plastic colouring come together to create an endless maze of muck.

Sit tight.

Touch and go

Launched in September 2018, SPA is a marketplace where restaurants can bulk-buy food containers, cutlery, and bags. At the time, media pegged it as a move to encourage sustainable packaging, including trays made from bagasse and corn starch. Eateries buying eco-friendly or recyclable items from vendors on SPA get a 5% discount on these purchases. Virtuosity in itself needn’t be questioned. But gilded virtuosity should. And that’s because plastic containers and trays are not just available, but more visible on SPA.

SPA is available in seven of 200 cities Swiggy operates in, meaning any eco-friendly benefits are considerably limited in geographic scope. The argument can be made that packaging vendors may not be present in all 44 cities to facilitate SPAs mission. Also, it makes business sense to focus on metros. But this brings another hiccup to the fore: price.

Plastic trays and containers on SPA range from Rs 2-10 (approximately) per unit. Paper boxes, Rs 3-7 per unit. A ream of parchment paper costs Rs 2,138. A 300ml glass bottle is Rs 11.50. At the time of last checking the SPA site, bagasse-based packaging was only available in one location—Chennai—while corn starch trays weren’t available at all.

Swiggy Packaging Assist’s landing page offers different packaging options for partner restaurants to chose from

Now, consider Swiggy’s most-ordered items. The company’s 2018 StatEASTistics report, which analyses food trends among its orders, revealed that Indian food, specifically, biryani, is most popular. Apart from biryani, this consists mostly of gravies, often oily and spice-laden, which are usually delivered in plastic containers since they hold up better against these culinary elements. South Indian breakfasts, often with accompaniments packaged in thin, non-recyclable pouches, are also popular. 

Paper boxes, meanwhile, are used for pizzas, sandwiches, and burgers, none of which surface among the most popular foods on Swiggy. Zomato reports similar numbers. North Indian food accounts for 50% of the total order volume. South Indian food another 15%, followed by Chinese at 10-15%. Stacked up, 75% of orders favour cuisines prone to spillage and served piping hot.

One Bengaluru-based founder of an inventory management platform said that managing costs was a higher priority than being eco-friendly. “Packaging alone can account for 10% per unit food cost,” he explained, adding that returns, cancellations and discounts offered by platforms leave little margin for an eatery to buy expensive eco-friendly material. 

“India currently uses 14 million tons [of plastic] annually which will grow to 25 million tons by 2025. Packaging is a fast growing segment for foods, industry, and pharma packaging. This will remain; there’s no alternative here”

Hiten Bheda, Former President, AIPMA

“There’s no sense paying premiums [for eco-friendly alternatives] if few customers care for packaging in lieu of convenience,” he adds. Having run a cloud kitchen, he requested anonymity to avoid upsetting peers in the food delivery business.

Swiggy declined to respond to The Ken’s questionnaire on SPA. Instead, a spokesperson said Swiggy was working to improve the design and recyclability of packaging solutions. Hundreds of restaurant partners across cities (with or without the plastic ban), the spokesperson added, have started using greener packaging solutions when possible. Like Zomato, Swiggy is introducing an opt-out feature for disposable cutlery.

Supporting a switch

The Bengaluru entrepreneur had a point about customers prioritising convenience over eco-friendliness. Eateries will only use non-plastic packaging if it’s more accessible and can withstand heat and messiness. Without this, customers won’t care. If anything, Indian food delivery services have been in a bind due to fevered complaints about spillage and food tampering.

Cue more tape, Ziploc bags, and containers.

There’s much to be said about the average Indian customer on food delivery platforms. Plastic is an eyesore, and while the clogging of our rivers or choking marine life causes distress, we don’t hesitate to ask for an extra plastic fork or spoon. Some even ask for extra containers. Because eateries providing more plastic cutlery are perceived as offering more value. “The opt-out choice for plastic cutlery was a fight against this ‘extra is good’ mentality,” says Rakesh Ranjan, vice president of Zomato’s delivery business. 

But what percentage of Zomato’s customers actually opt-out? “Very early two digits,” is all Ranjan offers.

Zomato, too, offers packaging solutions to restaurants, but it’s more customised than SPA. It categorises restaurants as platinum, gold, silver, base, and ‘risk’ based on customer ratings. Packaging is an important criterion for ratings. Consequently, spill-proof, tamperproof, reusable, or aesthetic packaging fetches restaurants better ratings. More often than not, this means plastic.

Zomato encourages platinum- or gold-tier restaurants to choose eco-friendly alternatives by offering a 20% off on cornstarch clamshell boxes and bamboo materials. This treatment doesn’t extend to lower-tier restaurants. While the top two tiers only account for 30% of partner restaurants, they handle 80-90% of Zomato’s orders, explains Ranjan. It’s a fortunate overlap and one Zomato uses to its advantage to promote its sustainability store.

“I’d rather work with a Cafe Coffee Day than your local neighbourhood eatery. Because Coffee Day already pays attention to its packaging. Asking them to switch to sustainable materials is easier,” he says. So far, Zomato had been importing plastic substitutes from China at a hefty cost. A long feedback loop with the manufacturers, and almost a 35-40% cost difference has Zomato looking for alternatives in India.

An in-house team of designers, vendor managers and engineers, says Ranjan, is working with Indian manufacturers to re-design packaging solutions for hot, gravy-based food. Though cheaper, this custom approach has its limitations. Ranjan admits to still featuring plastic containers, straws and trays—albeit ones more than 50 microns thick and more recyclable. Virgin plastic—which contains only one type of plastic—is on the shelf as well, in addition to cornstarch and bamboo-based materials.

Despite their non-plastic food packaging solutions, Zomato and Swiggy’s rating ecosystems prioritise packaging condition rather than eco-friendliness. And yet, they can’t be held by the collar, because this is also what customers care about. Materials design, still relatively nascent in India, hasn’t given us affordable, hardy, plastic-free delivery alternatives.

All of this is compounded because the many plastic bans by various Indian states don’t do nearly enough.

Bogus bans

Starting in 2009 with Himachal Pradesh, India’s tryst with plastic bans is almost a decade old. In the intervening years, versions of the same ban—on single-use plastic, plastic cutlery, cups, containers—have popped up in 25 states.

A recent 2018 ban in Maharashtra on plastic bags, which also extended to food packaging, came down like a hammer on e-commerce companies. Zomato and Swiggy were in the trenches with Amazon, Flipkart and a host of restaurants now stuck with no packaging options. The reaction to the ban made two things clear. One, it was a knee-jerk reaction to a deep-seated, complex problem. And two, the likes of Zomato and Swiggy realise they have skin in the game since these bans make their everyday business harder. 

Jurisdictionally, however, food aggregators don’t feature on the food chain of responsibility, says Ravi Agarwal, founder of Toxics Link, a Delhi-based, nonprofit think-tank. Even restaurants are a stretch since Extended Producer Responsibility (EPR) guidelines mostly apply to FMCG brands. EPR guidelines are a global policy measure that makes brands financially responsible for collecting and treating their plastic products after use by customers. 

Agarwal has been pushing for the use of more sustainable and less toxic materials in consumer items like paint, electronics and most recently plastic. In 2016, he was part of the drafting committee on Plastic Waste Management Rules. Facing pushback from brands on EPR guidelines, little more than diaphanous plastic bags came under scrutiny. So whether establishments are procuring and using “food grade” plastic is difficult to answer. “Also, EPR extends to branded packaging. With unbranded stuff, who knows what toxicity levels they have?” says Agarwal.

Still, the bans keep coming. Despite being highly unenforceable, especially in the food and beverage industry, 80% of which, says Ravi Wazir, is unorganised. Wazir is a restaurant and food business consultant. He adds that culturally, India’s food preferences range from street-food and local eateries to fancy, high-end restaurants. This makes scrutiny of food grade packaging material almost impossible to do. Wazir, a member of several national restaurant associations, agrees that without proper enforcement, packaging compliance by food joints is uncommon.

It doesn’t help that authorities have limited manpower and expertise to catch anyone in the act. “In Maharashtra, you had police inspectors trying to book restaurants for flouting norms. But what these norms are, no one’s quite sure,” says Agarwal. 

To be fair, these norms—created by the Food Safety and Standards Authority of India (FSSAI)—aren’t easy to monitor. FSSAI, inspired by a 2017 draft of World Trade Organisation (WTO) packaging regulations on Food Safety and Standards, passed its own version in 2018. The document defines food grade as materials safe for packing food and which won’t change the composition of the food they carry. The regulations list standards for almost every possible material for food packaging, mentioning 20 different standards for plastic alone.

Additionally, there’s a chemical-wise breakdown of specific ‘migration limits’ for plastic that comes in contact with food. This means that there is a cap (measured in milligrams/kilogram of food) on materials released from the container into the food it’s carrying. The limit on barium, for instance, is 1 mg/kg, whereas iron’s limit is 48mg/kg.

These regulations are as detailed as they are obtuse. To the untrained eye, any transgressions of these packaging rules would be impossible to catch. “Everyone is excited about banning plastic. But can any of the deployed officers tell what is food grade-quality plastic?” asks Wazir. Making matters worse, FSSAI’s involvement stops at creating regulations. The onus of implementation is left to individual states. According to one report, Delhi’s food safety department had only three active inspectors for over 50,000 establishments in 2015.

No entry

The Indian government has aimed to cease all imports of plastic waste into the country by August 2019. Imports of PE and PET waste had increased by 50% between 2016 and 2017. India’s ban comes after China stopped the import of plastic waste to its shores

With authorities unable to keep pace, platforms like Zomato are also not in a position to check things like composition or migration rates of plastic containers. “If we find restaurants packing food in really low-grade plastic, then they’re an automatic reject,” clarifies Ranjan.

Wazir doesn’t want food aggregator platforms policing restaurants. For him, it’s more about self-regulation for restaurants owners and creating awareness for smaller, local vendors. He’s quick to emphasise the harsh business realities at play. A premium milkshake outlet, for example, can charge extra for glass bottles, but not every food operator will be able to absorb the cost, he says. Rather, it’s the customer who will bear the cost of knee-jerk, blanket bans.

The definition, or rather identification, of food grade plastic remains stuck in no man’s land. Ultimately, without any clear chain of responsibility, or easier explanation of standards, plastics will abound in the food packaging sector.

This shifts the onus from production and enforcement squarely back onto recycling.

Plastic’s true colours

Back in Delhi, GPWM’s Rajesh Mittal claims to incur monthly losses of about Rs 3 lakh ($4,320) recycling the colony’s plastic waste. Mittal says his 500-square metre facility could host enough equipment to process a tonne of plastic waste daily. The capacity of the existing unit is 200kg, but it’s being fed only 50kg. His request to process garbage from outside the colony was declined.

“We weren’t even being paid for our services until two years ago when we threatened to shut shop,” he shakes his head. Just then, two handcarts filled with cardboard boxes, containers, bags, and other garbage, arrive at the facility. Mittal points out that while residents have separate bins for waste segregation, segregation is rare. His employees, as a result, spend a large part of their day sifting through plastic.

The disposability of plastic and the collective indifference towards segregation has ensured plastic waste doesn’t fetch money. Why would waste collectors collect plastic that only fetches around Rs 3 ($0.04) a kilo? This is important, as no discussion of plastic generation by the food delivery juggernauts is complete without talking about the kinds of plastic and the monetisation of waste.

BBMP’s special commissioner of solid waste management, D Randeep, wants food containers banned because they’re “single-use disposables”. However, Indians tend to reuse these, and they also command higher prices than disposable trays and cutlery, which have no value for waste collectors.

And yet, there’s a kicker. If Mittal is to be believed, black food containers, the kind food delivery has made ubiquitous, have a resale value of Rs 5 per kilo at most. If this is the good stuff, think about how truly worthless styrofoam is.

“Black containers rarely sell at higher rates because the material is thinner. This is why restaurants bulk-buy them to cut costs. Black plastic is also a great way to hide defects that’d otherwise be spotted in clear and white containers,” says Hiten Bheda, former president of All India Plastics Manufacturers’ Association (AIPMA).

Think back to when you ordered food before the advent of delivery apps. The containers you got, in all likelihood, were either white or clear. Black food containers have flooded the delivery market, but there’s no India-specific data to determine how much.

“Black plastic [food containers] contains carbon black and other dyes. We can’t rule out the danger posed by black food containers in India, but we also can’t prove how toxic they are, yet,”

Suneel Pandey, TERI

A 2018 study by University of Plymouth scientists found that recycled black plastic, mostly used for food storage, is choc-full of heavy metal and flame retardants. Black container microplastics are suspected to leach into food. But, says Suneel Pandey, director of the Environment & Waste Management Division at TERI (The Energy and Resources Institute), there isn’t enough research to determine how likely hot gravies or meals are to trigger leaching. “Such plastic also contains carbon black and other dyes. We can’t rule out the danger posed by black food containers in India, but we also can’t prove how toxic they are, yet,” he stresses.

This quandary magnifies the task ahead of the FSSAI, whose 2018 packaging regulations specify plastic migration limits for just seven contaminants. There are stipulations for carbon black under IS:9833 standards for colourants, too, but no way of knowing how many manufacturers adhere to this. Not all food containers even have the IS marking at their base. Pray tell, what is food grade, and what isn’t?

Lalit Agrawal is the director of Glen Industries Pvt Ltd, a Kolkata-based plastics manufacturer. In a telephonic interview, he rubbishes claims that black plastic is an inexpensive way to hide material defects. All storage containers made in his facility, he adds, pass food contact thresholds. “Black containers first became popular abroad because they simply look better than milky and clear plastics,” he counters.

Glen Industries is export-driven, selling 30% in the domestic market. Of this, only 3% is accounted for by eateries. That’s still an average of 30 lakh units monthly. “Everyone just wants black. Judging by how things are going, I foresee double demand,” mulls Agrawal.

Manufacturer, restaurant, aggregator, regulatory body, municipal corporation. Just where does the ‘food grade plastic’ conundrum begin… and end?

Sweet spot

Definitely not with food delivery services.

“There is no clear definition of food grade packaging material passed down by the FSSAI,” says Zomato’s Ranjan. Does a roll wrapped in paper, and covered in plastic (not touching the food) make the cut? Ranjan says he understands the minimum 50-micron rule and asks partner restaurants to follow that regulation. There isn’t much platforms can do beyond that.

Zomato’s instead chosen positive incentives to trigger voluntary action by partner restaurants. “Do we penalise them for sending cutlery even though the customer opted-out? No. It would create issues on both sides,” says Ranjan. Similarly, Zomato isn’t inclined to push its partners towards more sustainable packaging, leaving it to economies of scale and technology to produce more cost-effective and sturdier packaging. 

While Agarwal, of Toxics Link, believes that these well-funded platforms have enough leverage and heft to influence a greener, more sustainable packaging channel, food aggregators are loath to push for disincentives that might hurt order volumes. 

Wazir, on the other hand, doesn’t even consider Zomato, Swiggy or any other platform as serious stakeholders in solving the plastic issue. “At best, these food delivery platforms can devise some kind of auditing process, like they did with food hygiene standards,” says Wazir. According to him, their measures are reduced to mere CSR photo-ops, because they’re neither manufacturers, food producers, part of the recycling industry or the customer. Other than being intermittent, unofficial inspectors, says Wazir, food aggregators are going to have little impact on reducing plastic waste.

While measures like notifying partner restaurants on the ‘opt-out’ option through a dashboard are easier to implement, cost and convenience make plastic-alternatives much harder to digest. The economics, without scale or support from the government, can easily snap and continue the flood of black, low-grade plastic containers. “At 1.6 items per order, at our order size, it’s just not viable to be completely plastic-free, even if we wanted to,” says Ranjan.

Aggregators are stuck in an awkward spot between arbitrary regulations on plastic containers, and a partner network that, at best, is extremely heterogeneous in its attitude towards reducing plastic waste at source. The lack of suitable alternatives makes the job even harder. By Zomato’s own account, plastic waste from online food delivery adds almost 22,000 metric tonnes to India’s garbage pile every month, most of which, they admit, is dumped sans recycling.

But the awkward position is also a sweet spot of sorts. Without any overarching regulation scrutinising them as food producers, aggregators are free to run experiments with plastic-alternatives and tiered incentive structures. And media buzz around their sustainability efforts to reduce plastic usage is just icing on the cake. These optics are great for Zomato and Swiggy, positioning them as woke leaders of an ever-expanding e-commerce universe. How much that’s preventing land-fills from overflowing or gutting marine life is another matter.

How India landed in the rabies vaccine doghouse

22-year-old Bale Hasda, who goes by the name Sumi, was bitten by a stray dog in Delhi’s upscale Lodhi Colony on 11 March. She wasn’t the only victim, or even the worst affected. A few others in the neighbourhood were bitten as well, with one senior citizen dying as a result of the dog attack. 

Fortunately for Sumi, her employer rushed her to Delhi’s Safdarjung Hospital, one of the few public health centres in the national capital that still have stocks of the vital anti-rabies vaccine (ARV). As ARV supplies at other public hospitals dry up, Safdarjung Hospital has seen its anti-rabies clinic overwhelmed with victims of dog bite cases.

Sumi received a tetanus injection and a shot of the life-saving rabies immunoglobulin—a serum administered for deep animal bites and scratches—and also a series of five ARV injections over the next few days. The last of these injections was on 8 April, nearly a month since her ordeal began. All told, the treatment cost her Rs 3,000 ($44), while the serum was given free of cost. At a private healthcare provider, this could have cost as much as Rs 15,000 ($218).

Without timely medical intervention and the availability of the ARV, Sumi’s story could have panned out very differently. Others have not been as lucky, turned away from their closest public hospitals due to the non-availability of the ARV in Delhi. Elsewhere in the country, the situation is equally dire. Karnataka, Jammu and Kashmir, and Punjab among various other states are all running out.

“Various reports in the past few months indicate that several states in the country have reported 60-80% shortage of ARV, due to a combination of factors including growing demand, imperfect demand signal, and supply disruptions”

Prasanna Deshpande, deputy managing director of Indian Immunologicals Limited

That this would be the case in India is a bit of an oddity because literally nowhere else is the need for ARV more obvious. India accounts for 36% of deaths due to rabies worldwide. Some 20,800 deaths every year, most of them children under the age of 15, according to a 2015 study published in the PLOS Neglected Tropical Diseases journal. 

India is also home to the largest anti-rabies vaccine manufacturer in the world—formerly GSK-owned Chiron Behring Vaccines, which has now been acquired by Bharat Biotech. 

On its own, Chiron Behring’s facility had a capacity of 15 million doses, almost a third of the national yearly requirement of 35-48 million doses. In fact, India’s four ARV manufacturers—Hyderabad-based Bharat Biotech and Indian Immunologicals Ltd, Ahmedabad-based Cadila Healthcare, and Pune’s Serum Institute of India (SII)—have a combined capacity of 40-50 million doses annually. (These figures are based on media reports and Bharat Biotech’s founder-chairman Krishna Ella’s estimates. There are no official figures as no official study/estimate has been done on the demand.)

But even with adequate demand, tremendous market potential, and adequate combined capacity, state governments are finding it hard to procure the vaccine. India is staring at an 80% shortage of ARV.

Government authorities have put the blame squarely on manufacturers, claiming their focus on exporting ARV is the reason for the shortfall. Government officials say this is because ARV fetches a higher price abroad—around $30 versus Rs 300 ($4.4). Consequently, manufacturers have ignored various tenders floated by state governments for the bulk purchase of the vaccine. With the state unable to procure the vaccine, public health centres have been told to deal directly with distributors who sell the vaccine at a considerable mark-up.

With a looming public health crisis in the offing, the Indian government has mulled capping exports of ARV altogether. Manufacturers, however, believe the government’s knee-jerk reaction will solve nothing in the long-term. They claim they simply do not have the capacity to meet states’ requirements and point to systemic issues with procurement as the root cause of the problem. The cap, they argue, will only hurt their international commitments. 

Meanwhile, the likes of Sumi must hope that their nearest public hospital is one of the rare ones still stocking ARV.

SOS from states

The World Health Organisation (WHO) estimates that rabies causes some 59,000 deaths worldwide each year. The overwhelming majority of these—95%—take place in Africa and Asia. This number, however, is believed to be lower than it should as widespread underreporting and uncertain estimates mean the true burden of the disease is unknown. The disease is also largely dog-mediated, with rural populations disproportionately affected.

India, with its lax animal sterilisation measures, sees 1.75 million dog bites a year according to the National Health Profile 2018. Unsurprisingly it is the worst-affected country when it comes to rabies. And things are getting worse. In 2017-18, the southern state of Karnataka reported 1,09,462 dog bites. With just over half of 2019 gone, the number of dog bites already stands at 83,837. According to government figures, Karnataka and West Bengal together account for half the country’s rabies cases.


Even so, Karnataka is woefully underprepared for the rabies situation in its backyard. Earlier this month, it asked neighbouring Kerala and Tamil Nadu for ARV supplies after public hospitals in the state began to run dry. While Kerala sent 10,000 vials of ARV and 2,000 vials of rabies immunoglobulin serum, Tamil Nadu sent 5,000 vials of ARV. These supplies, though, are like a bandaid on a bullet wound. The state announced that these supplies would only last for the next two to three months. 

The situation is similar in Delhi. Ashok Rana, the city’s director general of health services, told The Ken that ARV stocks will last for the next two months. Mere weeks ago, the state floated a tender to procure ARV; it received just one bid. Now, the state is counting on the single manufacturer who came forward to bail it out of its current predicament. Rana refused to divulge the name of the manufacturer as the tender is yet to be finalised.

Kerala and Tamil Nadu, on the other hand, were able to help Karnataka because they have three-year contracts with manufacturers for ARV supply. Karnataka’s contract was just a year-long. Since December, Karnataka has floated two tenders for ARV procurement; manufacturers stayed clear of both. The procurement is handled by the  Karnataka State Drugs Logistics and Warehousing Society (KDLWS).

Latha Pramila, chief supervisor of drugs for KDLWS, says they are unable to make centralised procurements because manufacturers are not bidding. “We have released money to healthcare facilities for local purchase, but at a higher price,” she says.

Bulk buys

With a shelf life of 12 months and at an average price of Rs 200 per vial, it costs Rs 8 crore to make a bulk purchase of 4 lakh vials for Karnataka

 Having to buy from dealers is not sustainable, as they come with a substantial mark-up. “The dealers’ margins are 30% to 35%,” Latha says. But while a tender system would allow governments to procure ARV at lower rates, manufacturers prefer doing business with dealers who require smaller quantities but are willing to pay more.

Broken tenders

Buying from dealers, however, is not a solution to the problem at hand. Karnataka’s annual requirement is 350,000-400,000 doses of ARV, a quantity no single dealer can match. At present local health centres in the state are directly dealing with different dealers in their districts to bridge the shortfall.

All of this could be avoided with a centralised system of procurement, and, to be fair, it exists. But it’s broken and antiquated.

According to manufacturers, the rate-contract system employed by states asks a lot from manufacturers while giving precious little in return. Right at the outset, the rates governments are hoping to procure at leave vaccine makers feeling shortchanged. According to Sunil K Bahl, former director of business development at SII, prices per dose under tenders are particularly low. “In the open market, the manufacturer can get Rs 250 ($4),” Bahl says. These prices are already low as ARV is listed as an essential drug, meaning its price is capped by the National Pharmaceutical Pricing Authority, he adds.

Karnataka is a great example of this price discrepancy. In 2017-18, the Karnataka government procured 250,000 vials of ARV from Indian Immunologicals at a price of Rs 172 ($3) per vial. Currently, since the Karnataka government has asked hospitals to purchase the vaccine from local dealers, they are getting it at Rs 270-290 ($4-$4.2) per vial. The market rate is higher still—Rs 340 ($5).

Waste not, want not

Used intradermally, one vial can be used to treat five patients. Intramuscularly, though, it can be used on only one patient. But once opened, it has to be used within eight hours. As a result, for facilities with low patient footfall, intramuscular injections are more preferred despite the scarcity of ARV

“If you don’t bid low, you won’t get the tender. State governments should introspect why manufacturers are not coming forward to bid,” Bahl said. As of now, only primary manufacturers are allowed to participate in tenders due to quality concerns.

But this is only the tip of the iceberg as far as tenders go. According to Prasanna Deshpande, deputy managing director at Indian Immunologicals, the rate-contracts employed by various states are riddled with shortcomings. While they fix the purchase price of vaccines, they do not specify the exact quantities of vaccines required. This is down to the fact that estimates of vaccine demand are often inaccurate—usually projections based on utilisation in the previous two years.
“This makes it difficult for manufacturers to plan their capacities properly, and this adds uncertainty and leads to demand-supply friction,” Deshpande says.

While long-term contracts gives states the assurance of supply, manufacturers are uncomfortable with this as they are liable to governments for longer periods. None of this is helped by the lack of central guidelines on vaccine procurement.

KDLWS’ Latha Pramila makes no bones about the exacting nature of these contracts. “Our contracts require the manufacturers to pay an advance amount like a security deposit (to assure quality and accountability), and contracts come with a penalty clause. They don’t have to adhere to our conditions if they sell in the open market,” she says.

The conditions of the government are getting tougher every day, Bahl points out. “Earlier, there was a one-year tender, now they want a contract for two years. Payments are delayed for 90-120 days,” he says. 

With the terms seemingly stacked against them, it’s little wonder that Karnataka’s most recent tenders for ARV have gone unanswered.


A shot in the arm

Is the current vaccine shortfall doomed to continue then? Not quite. Industry insiders say that the situation is particularly bad at present owing to recent circumstances, and believe it will improve in a few months.

The biggest change on the ARV front has been Bharat Biotech’s all-cash acquisition of Chiron-Behring from pharma major GlaxoSmithKline. Bahl told The Ken that the current shortage was because of the halting of production by Chiron-Behring. Chiron-Behring’s Ankleshwar facility previously produced 15 million doses of the vaccine, making it the single largest producer of ARV in the world. 

While it will still take another few months before the plant is up and running again, the ARV crunch should ease considerably after this happens. Bharat Biotech did not respond to The Ken’s emailed questionnaire regarding its plans.

Indian Immunologicals, which has manufactured ARV for more than 15 years now, is also looking to increase ARV production. It has a current capacity of 10-15 million doses, more than 50% of which is sold in the domestic market. “In the past, we used to supply to more than 10 state governments, but now it is down to a single digit,” he says. This was because of the difficulty of dealing with state governments—fulfilling their criteria and delayed payments. The company also exports to countries in Asia, the Middle East, and Africa.

On 24 June, Indian Immunologicals announced the setting up of a new manufacturing facility in Telangana. This will increase its capacity to supply its ARV, Abhayrab™. The new facility is expected to be ready later next year. The company currently has one operational facility in Tamil Nadu. This will also help the situation going forward, however, it will be two years before the vaccines from the new facility hit the market.

Despite the current supply crunch, Indian Immunologicals’ Deshpande insists that the situation doesn’t require drastic measures. “The problem is being solved with the government tracking supplies and manufacturers ramping up capacity. The situation will ease in the coming months,” assures Deshpande.

Cap-acity

The government, however, feels otherwise. As lines outside anti-rabies clinics grow longer, the government is mulling a 30% cap on ARV exports if not an outright ban. “The government should have a dialogue with the manufacturers before mulling a cap or ban on exports,” Bahl says. In April this year, it did just that. Still, states continue to receive no response to their tenders.

But while an export cap may force manufacturers to come to the table, an outright ban would seriously wound them. “We have contracts with international partners. If we are not able to supply, there will be financial repercussions. It will also not be good for India’s reputation as an exporter of pharmaceuticals and vaccines, as we are a bright spot in the industry. A ban will be undesirable,” Deshpande said.

Rajeev Dheere, executive director of SII, concurs. Only SII and Cadila are WHO pre-qualified, meaning they are approved by the WHO to provide their vaccines to international agencies and markets. This, understandably, makes export a very important market for both. Even so, Dheere says, exports won’t exceed 4-5 million doses for both Cadila and SII combined. 

“The government must tell us in advance what they want. One cannot estimate the number of dog bites but they have to take risk, buy stock, and replace it in two years if unutilised”

Rajeev Dheere, executive director of SII

“When the health ministry called for a meeting, we explained that if they inform us of their requirement, their tender volume, and if it is for a particular period or month, we will tackle it easily,” Dheere said. Like Indian Immunologicals, SII also maintains that at least 50% of its vaccines are sold in the domestic market.

Manufacturers suggest that adding ARV to the Centre’s universal immunisation programme could solve this problem altogether. It would ensure the Centre procures the rabies vaccine like it does in the case of other diseases. For example, the Measles-Rubella vaccine was centrally procured for the whole of India. “No state bought it. Pentavalent, Hepatitis B, Tetanus, Measles-Mumps-Rubella, Measles-Rubella, all vaccines are bought by the Centre. Rabies is the only vaccine which states procure,” Dheere points out. 

This is how it’s done the world over, Dheere adds. The central government should take inputs from states on their requirement, procure it and then distribute it, he suggests. When all other vaccines are centrally procured, there is no reason why the rabies vaccine is any different. While caps and bans may make for good optics and show a sense of urgency, they will ultimately leave the root cause of the problem untreated.

What makes a good bad bank?

Indian banks are bracing themselves for an onslaught of bad loans brought on by the pandemic. The Indian Banks’ Association, an association of Indian banks and financial institutions, has a request of the central government. It asked the government to set up a “bad bank” to reduce the impact of the losses banks will face because of provisioning for non-performing assets (NPAs). This is how it will work: An asset reconstruction platform would buy these stressed assets from banks and then try and turn them around.    The government already thinks it is a bad idea because this bad bank would end up being government-owned. And when bad loans are transferred from a government-owned bank to a government-owned bad bank, the government will end up financing both, leading to opaqueness in its dealing with NPAs.     This Mint piece lays out all the complications of having a bad bank.   But the idea is gaining traction elsewhere. European Central Bank officials are drawing up a scheme to cope with potentially hundreds of billions of euros of unpaid loans in the wake of the coronavirus outbreak.
The amount of debt in the euro zone that is considered unlikely to ever be fully repaid already stands at more than half a trillion euros, including credit cards, car loans and mortgages, according to official statistics.That is set to rise as the COVID-19 outbreak squeezes borrowers and could even double to one trillion euros, weighing on already fragile banks and hindering new lending, the people familiar with the ECB plans said. Exclusive: ECB prepares ‘bad bank’ plan for wave of coronavirus toxic debt – sources​, Reuters
But I had a few fundamental questions about this. If all the banks got rid of their bad loans to this new entity, what’s the measure of success for this “bad bank”?

The volume and value of bad assets? Or the ability to turn around these assets?

If recovery of bad loans is the winning metric, what does that say about the country’s banks? A bank’s decision to lend to a borrower is based on her credit worthiness. And the fear of making bad loan decisions makes banks responsible lenders. Now, if the recovery of a bad loan is someone else’s problem entirely, that could end up shifting a bank’s priorities. 
Time to get your own Netflix subscription   Seetharaman   Eight out of 10 Indians share subscriptions to video streaming services, according to a 2018 survey. They don’t just share them with family members but also with friends and colleagues.    That might be a little tricky now, as they are all holed up at home and trying to access these services at the same time. And some of them may be struggling to watch their favourite shows, if the plight of Netflix users in the US is any indication. 
As people spend more time at home amid coronavirus restrictions, many of them are turning to video-streaming services like Netflix, Hulu and HBO Now more than ever. The problem is, so are their families and friends. Although the services allow people to share accounts, they place limits on how many devices can stream at once, stirring tensions among loved ones. You’ve shared your Netflix password…, The Wall Street Journal
Netflix, for instance, allows a maximum of four users at once in India, but that costs a pretty penny—Rs 800 (US$10.6) a month. The Rs 650 (US$8.6) plan allows two concurrent users and the Rs 500 (US$6.6) plan, just one. Globally, streaming services are said to have lost $9.1 billion to password piracy and sharing in 2019.
  If people have to get used to lockdowns and working from home till there is a vaccine for the coronavirus, will they be forced to get their own subscriptions instead of mooching off their friends and cousins? Also, could this be an opportunity for Netflix and its competitors to come up with pricier plans to allow access to more users with just one subscription? 
Atmanirbhar masks and hospital bills   Savio   We’ve increasingly been writing about masks. But not as much about the astronomical 250% rise in prices of N95 masks in India this year. But before we go there, let’s talk about hospital bills.   The Tamil Nadu Health Department recently announced three slabs of maximum daily tariff for COVID-19 patients in private hospitals. Grade A1 and A2 hospitals can charge general ward patients a maximum of Rs 7,500 a day, while Grade A3 and A4 hospitals can charge Rs 5,000 a day, at most. If one is admitted, the bill can go up to Rs 15,000, irrespective of the hospital’s grade. But while setting the tariff, the department did not specify if this included all hospitalisation costs.   “Consumables” like crepe bandage, gowns, foot covers, slippers, and disposable gloves usually add about 10% to the total bill. A 10% that health insurance does not cover because they are non-medical items.   But due to Covid-19, these consumables now include complete PPE equipment. All of which can tag on another 25% to the hospital bill. In extreme cases, PPEs account for up to half the bill.   And no, health insurers don’t cover these costs either. Why? Well, for one, there are no clear guidelines issued by any authority on this, so it’s like the Wild West. Plus…
Dr S Prakash, Managing Director, Star Health and Allied Insurance explains why some of the consumables are not covered under mediclaim policies: “Whatever consumables are reasonably required and appropriately charged are covered under the comprehensive health insurance policy. However, the problem occurs with some of the consumables where trade margin is very high. When the trade margin is too high, naturally there will not be adequate funds to pay for it. Hence, these are not covered by the insurers,” Prakash said. Your insurance may not pay for significant part of hospital treatment for coronavirus, Economic Times
Speaking of high margins, let’s come back to N95 masks. And their astronomically soaring prices.
N95 masks, bought by government agencies at Rs 12.25 including taxes in September 2019, cost them Rs 17.33 in January 2020, Rs 42 by March-end and up to Rs 63 by the middle of May, an increase of over 250% since the beginning of the year.
Yet, the price regulator NPPA has decided not to cap the price of N95 masks as it “may disincentivise domestic manufacturing”.
Instead, on June 3, it put out a list of maximum retail prices (MRP) of N95 masks manufactured by domestic companies ranging from Rs 95 to Rs 165 as reduced prices. The ‘reduced’ MRPs are 450%-850% higher than the January price paid by a government institution.   […]   “How does NPPA justify this as a price reduction when something sold for Rs 17.33 in January is now being sold for as much as Rs 165? It is plain loot or profiteering. If it can cap charges of hospitals and even airlines, why can’t they intervene to cap price of N95 masks,” asked Anjali Damania of Voice of Taxpayers, one of the petitioners in the Bombay HC over mask pricing. N95 mask prices rise 250% in 4 months, but no cap yet, Economic Times
So, I guess patients are left to pick up the tab of an atmanirbhar (self-sufficient) India.
Private schools: India’s own education bogeyman
Olina   Parents have had a hard, hard lockdown. The economy is plummeting, jobs are scarce, and now they also have to homeschool their children since there’s no clear timeline for reopening schools.   Irate parents have taken to Twitter and online petitions to make their feelings about learning online abundantly clear
The government of Karnataka, a southern Indian state, finally acted on this collective plea, banning online live classes for students upto grade 7.
 A State Cabinet meeting chaired by Chief Minister B.S. Yediyurappa took the decision following parents’ outcry against several hours of online classes for students by private schools. The Primary and Secondary Education Department too received a number of complaints against conducting online classes for school students. With Karnataka ministers not in sync, confusion prevails on online classes ‘ban’, The Hindu
Live classes aren’t allowed, though pre-recorded video links are. Parents aren’t satisfied with that either. They’re now calling for a complete ban, citing far too much screen time for kids.
Online learning has been divisive to say the least. The huge digital divide, for one, has drawn a clear line between families who have access to multiple devices, rooms and robust internet connections, and those who don’t. Parents in low-income settings are especially hard-pressed as the schools they send their kids to aren’t prepared for online teaching either.
On the flip side, online classes are the only way a majority of private schools can keep their fires burning: retain their teachers, staff, pay rent.
It’s also the only way to retain students after an inordinately long summer break. It will disrupt a process that so far has been going smoothly, claims one private school founder.   But parents, who are being made to pay for these online classes, think this  is a calculated ploy for private schools to keep charging money. It’s a collective virtue-signalling act that’s roped in state governments in Delhi and now Karnataka, who are encouraging schools to cut fees instead of hiking them.
There’s no doubt that online learning, at such a massive scale, is unprecedented. It’s also unlikely that anyone—governments, schools, parents, teachers—know how much to charge for online classes.   But instead of finding market-based solutions for this academic gap, the government has turned to what it does best: form a committee.
“The expert committee… will discuss how to use technology for children, how much technology should be used and other ways to engage children of all ages.” Karnataka bans web classes from LKG to Class 5 in all boards, The Times of India
Better yet, the government has its own dedicated TV channels and online platforms like SWAYAM and DIKSHA, which broadcast classes all day. Seems like the battle-cry against limited screen time doesn’t apply here.
It’s protein Vs protein    Arundhati   The meat industry in the US is bleeding. The cramped working conditions have cast gloom on the industry as over 10,000 people have been infected from just meat plants, reports Bloomberg. This has pushed prices for meat up, making Americans turn to protein alternatives. 
Pulmuone, a South Korea-based food maker boasting a 78% share of U.S. tofu sales, with brands like Nasoya, Wildwood and Azumaya. Jay Toscano, Pulmuone’s executive vice president of sales, said three of its U.S. plants are going six days a week. Sales are so good, he said, that Pulmuone has been forced to import tofu from Korea to meet demand.   Based on Nielsen data for the four-week period ending March 28, tofu sales were up 66.7% over the same period in 2019. Sales were still up by 32.8% in May. Tofu Goes Mainstream Thanks to Big Meat’s Covid Crisis, Bloomberg
As the Asian plant protein is winning over fans in the US; Beyond Meat Inc, the US-based fake meat company valued at $12.1 billion in 2019, is heading to… China. 
Yum China, the country’s largest restaurant operator and sole licensee of Kentucky Fried Chicken, Pizza Hut, and Taco Bell from former parent company Yum! Brands said it will debut the Beyond Burger in some of its stores starting June 3. China Gets Its Introduction to Beyond Meat’s Beyond Burger on June 3, The Motley Fool
In this protein versus protein fight, all I can say is that the world has not tasted enough paneer (Indian cottage cheese). 
Hoist the Jolly Roger   Savio   With everything locked down and shuttered, there likely were fewer cases of robbery on land in the past couple of months. Not so on the high seas.   The number of incidents involving piracy and armed robbery against ships in Asia doubled to 49 in the first five months of 2020, compared to 25 in the same period last year, according to the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP), reported The Business Times.    Twenty of those 49 cases were in the past two months (9 in April and 11 in May) alone.
While Bangladesh, India, Indonesia, the Philippines and Vietnam all saw a rise in piracy, the most concerning was the jump to 15 incidents in the Singapore Strait from seven last year.
You say potato, I say community transmission   Olina   Community transmission has been the dreaded phrase since Covid first hit India. Admitting we have reached the community transition phase would mean the virus has organically taken root in the population. No authority wants to admit that, obviously.   So they just didn’t. Or called it vague names like “local community transmission”. But with over 200,000 cases, and daily record jumps in infection numbers, governments can’t ignore it either. Instead, the definition has become something of a Kafkaesque centre-state battle.

No countries for young companies and small competitors

The last decade has seen what is arguably one of the most dizzying periods of innovation and competition in technology. The next decade will most likely look very different, unless regulators in the world’s largest economies—like the US, India and Indonesia—decide to take on the growing concentration of tech power.
Amazon, Apple, Facebook, Google and Microsoft are together sitting on cash reserves of $557 billion, says Mike Isaac in the New York Times. And while both their smaller and nimbler competitors as well as entire economies struggle to cope with the multi-year impact of Covid-19, the tech giants Amazon, Apple, Facebook, Google and Microsoft see an opportunity to entrench their power even further as they have become near-essential services. 
The [their] expansion is unfolding as lawmakers and regulators in Washington and Europe are sounding the alarm over the tech giants’ concentration of power and how that may have hurt competitors and led to other issues, such as spreading disinformation. This week, European Union officials were preparing antitrust charges against Amazon for using its e-commerce dominance to box out smaller rivals, while Britain began an inquiry into Facebook’s purchase of the GIF company.
[…]
In doubling down on growth in a time of economic pain, the largest tech companies are continuing a pattern. In previous recessions, those that invested while the economy was at its most vulnerable often emerged stronger. In the 1990s, IBM used a recession to reorient itself from a hardware company into a software and services company. Google and Facebook both rose out of the dot-com bust about 20 years ago. The Economy Is Reeling. The Tech Giants Spy Opportunity, New York Times
If the combination of tens of billions of dollars of free cash, hundreds of millions of existing users for their products, and armies of behind-the-scenes lobbyists and PR firms wasn’t enough to deter ambitious startups from taking on these giants, add marriages of convenience with the largest local players to the mix.
For instance, Facebook’s investment in Gojek in Southeast Asia, or in Jio Platforms in India. Imagine the “kill zone” that exists around a Facebook-Gojek or Facebook-Jio combine.
There’s a reason why there’s been a virtual parade of global PE and sovereign investors pumping billions of dollars into Reliance’s Jio Platforms each week, topping Rs 1 trillion at last count. Because not only is Jio India’s largest mobile operator, but it also has Facebook and Microsoft as partners.
There is no alternative
Unless the alternatives are, say, rumoured Google-Vodafone-Idea or Amazon-Airtel combines.
That task would be up to India’s lead competition regulator, the CCI. Anupam Sanghi, a competition lawyer, covers these issues in his piece for The Wire:
There are a number of issues at play here. Firstly, the strong network effects of digital platform economies. Second, the relevance of volume and variety of data as a key factor to provide high quality service and how that serves as a competitive advantage. Third, whether the mere combination of both types of user data (WhatsApp and Jio) will allow the new entity to achieve a position that could not be replicated by competitors leading to foreclosure of the market(s).
The success of the business model of various (multi) two-sided virtual platforms like Google, Facebook, and Uber among others depends on collecting user data. The data as input may be used to get ad-revenue or improve internal algorithms for the paid side of the platform. The potential of data analytics gives a crucial competitive advantage to the advertisement-driven business model.  Facebook-Jio Deal: What India’s Competition Regulator Will Have to Consider, The Wire
Malls open while shops remain shut?   Samiran Chakrawertti   Earlier this week, some rather confusing headlines about malls in the north Indian state of Uttar Pradesh made the news. The malls were reopening whilst all the shops in them would remain shut. Fortunately, there was a sensible explanation at hand to dispel the confusion.   Sanjay Gupta, state president of traders’ association Adarsh Vyapar Mandal, told IANS that shopkeepers had requested mall owners to waive rent and maintenance fees for the lockdown period. The mall owners said no. As a result, the association said a majority of shops in these commercial hubs in the state remained closed on June 8 in support of their demands on the issue.   Gupta said that shops would remain closed until their demands are met. This isn’t all, the shopkeepers want the rent and maintenance fees to be slashed for the next 12 months as they suffered significant losses owing to the coronavirus-induced lockdown.   You might wonder why malls would choose to open and incur operating costs if they knew shops were likely to remain closed. The timing of the decision to open malls across the country—while cases continue to mount and indoor air conditioned spaces are particularly vulnerable—has raised eyebrows.    As it turns out, the fine print in some rental agreements states that commitments to long-term leases can be opted out of should the mall remain shut for 90 days or more, said an executive at a fashion retailer which has several outlets in Delhi. We’re currently around 80 days removed from when the lockdown kicked in.   Even shops that have opened in malls elsewhere in the country are reporting dramatic reductions in footfalls and revenue.
The Covid sanitation dovetail

Olina
  We’ve all been reading enough news to figure out that Covid is a fire roaring through a house of wax. Well, houses, to be more precise.   According to an IndiaSpend article, almost 50% of households share a common drinking water source, and 41% use common toilet facilities. For a virus that spreads through touch and close contact, this is exactly the kind of fodder it needs to rip through a community. 
According to an IndiaSpend article, almost 50% of households share a common drinking water source, and 41% use common toilet facilities. For a virus that spreads through touch and close contact, this is exactly the kind of fodder it needs to rip through a community.   Reverse migration, due to Covid, might be making things even more difficult. Migrant workers, who fled their temporary homes in cities, have predictably carried the virus to more remote parts of the country. Chandra Ganapathy of WaterAid India points out that open defecation could be extremely harmful if it is discovered that Covid can spread through the fecal-oral route. The implications don’t end with open defecation though.   “Even in households where toilets and bathrooms exist, the load may be very high [due to the recent reverse migration] and it may become difficult to maintain proper hygiene and sanitation,” said Ganapathy. “This may be increasingly important in the case of confirmed COVID-19 patients and those in home quarantine.” 
Level up, not down, to equality
Olina   It was a busy Sunday afternoon for a group of parents, private schools, and educators in the city of Bengaluru. A twitter discussion—#Righttolearn—saw pointed criticism of the Karnataka government’s recent ban on online classes. The parents protested the ban, calling it “bureaucratic dictatorship” by the state government. Ironically, there is no ban on the government’s own broadcast edtech TV channels or online content. 
The ban, seemingly, is overkill. It’s also a reaction to how quickly the economic and social fault lines of the physical world transferred online—access to tech, quality of teaching, and good bandwidth for an immersive learning experience. But a blanket ban is too wide a hammer for the problem.   In fact, philanthropist Rohini Nilekani argues the opposite in a Deccan Herald opinion piece.
“We need plans, not bans. For the state, bans are the easiest exercise of its authority. But it is a blunt, ineffective instrument. This ban will not prevent the elite from giving their children the best online resources the world can offer. It will not prevent any children from accessing too much screen entertainment.   […]   Instead, the government could post guidelines on the size of the online class, the amount of screen time children should have, and the preferred methodologies for making the screen time engaging. Online classes need not count for academic grades; they could be voluntary, not mandatory. There are many possibilities for positive regulation.    We cannot level down in the name of equality. We must level up.” Lockdown: Online Classes – Let’s plan, not ban, Deccan Herald
Nilekani’s main argument is that while online isn’t a perfect medium yet, it’s a canvas for future possibilities. Especially when it comes to accessing more quality teaching. Otherwise, warns one parent, the inevitable might happen.
If the ban continues, the government would have unwittingly pitted the online and (previously) offline world in a battle for more users. The challenge is, one side knows how to play this game very well. Is it time to regulate them too?
India has a wheat-ish challenge
 
Samiran Chakrawertti
  Ever since the lockdown began, some people turned into master chefs to sate their hunger (or just pass the time). Others turned to shortcuts like readymade rotis and parotas to fill their bellies while saving time and effort.    If your tastes veer towards parotas, the flaky flatbread, rather than simple rotis (just flat bread) be prepared to shell out a bit more.    Parotas are not rotis, according to the Authority for Advance Rulings, which ruled against the applicant, ID Fresh Foods. Parotas will be subject to a Goods and Services Tax rate of 18% and will not be considered in the same category as ‘Khakhra, plain chapati or roti’ which are taxed at 5%.    The logic is that ‘(rotis) are already prepared or completely cooked products. On the other hand, parotas need to be heated before consumption.’ This nuanced reasoning found no vocal takers, with some comparing it to a previous litigation in India involving Nestle’s KitKat bars— the court had to rule on whether it was a wafer or a chocolate—and a well-known case involving Jaffa cakes in the UK.    In the Kitkat case, in 1999, the court ruled in favour of Nestle at the time, saying it was a wafer. Soon after, the rules were amended to increase the tax rate on chocolate-covered wafers, so Nestle’s joy was short-lived.    In a similarly quirky 1991 case in the UK, tax authorities challenged British snack food maker McVities’ contention that Jaffa cakes were cakes and not biscuits. That’s because, for some reason, chocolate-coated cakes attracted no value added tax (VAT), while chocolate-coated biscuits attracted a 17.5% VAT. That case was finally decided by some pretty airtight logic. The court ruled that when biscuits go stale, they turn softer, but when cakes go stale they turn harder. Jaffa cakes indeed turned harder when they were left outside, so the court ruled in favour of McVities.
Image source: Eldriva
In the roti vs parota case, a clarification made its way to the media over the weekend, attributed to an unnamed ‘government official’. While frozen or preserved parotas cannot be considered a staple food item and will be taxed at a higher rate as a luxury item, ordinary parota served at a restaurant or for takeaway would attract a 5% rate just like plain roti. But what does that mean for frozen or preserved rotis? The suspense is palpable. 
Corona cycleways   Jum   Lockdown measures may be paving the way for the Philippines to finally become bike-friendly.   With public transportation operating at limited capacity, Filipinos have been turning to bicycles to get to work in recent weeks.   That has forced authorities to install bike lanes along major Manila roads, which are super dangerous for two-wheelers. Motorcycle riders are the most frequent victims of vehicular accidents in the country, according to authorities. If mechanically propelled motorcycles are vulnerable, bicycles are even less protected. That’s why bicycles were largely banned from major roads before the pandemic.   The new bike lanes are only for the duration of the quarantine. But if all goes well, this could lead to something permanent. Who knows, it may even give birth to a new industry—bike sharing.   Groups have long been advocating for cycling to become a proper mode of transportation in the country. Not only is it environmentally friendly, it also has a good chance of easing Manila’s traffic congestion, said to be the second worst in the world. With coronavirus, bikes also allow commuters to exercise social distancing.
Image source: Daisy Chen/Unsplash
It’s a long way off, but if bike sharing does emerge, hopefully the Philippines avoids the pitfalls seen in China, where piles of impounded and abandoned bicycles have become a familiar sight.
“Gradually, and then suddenly”
Rohin   The quote is from Ernest Hemingway. The graphic is from Gautam John, a subscriber, who combined two important systems thinking models – the Iceberg Model and Pace Layers framework.