Endeavor Careers Choicest Blogs: Weekly Current Affairs: January 2022, Week 02

Welcome to the Endeavor Editors’ Weekly Current Affairs Choicest Blog series. Get a weekly roundup – on news from business, economy, markets, policy, and more. A quick capsule format news summary and update to keep you abreast with all the latest current affairs.

1) International News and Global Economy

Kazakh president gives shoot-to-kill order to quell protests

Security forces appeared to have reclaimed the streets of Kazakhstan’s main city on Friday after days of violence, and the Russian-backed president said he had ordered his troops to shoot to kill to put down a countrywide uprising. A day after Moscow sent paratroopers to help crush the insurrection, police were patrolling the debris-strewn streets of Almaty, although some gunfire could still be heard. Dozens have died and public buildings across Kazakhstan have been ransacked and torched in the worst violence the ex-Soviet republic has experienced in 30 years of independence. The demonstrations began as a response to a fuel price hike but swelled into a broad movement against Tokayev’s government and former President Nursultan Nazarbayev.

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Russian troops in Kazakhstan as deadly violence grips country over fuel price surge

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China targets Lithuania over Taiwan, hits global supply chains

With China blocking imports from tiny Lithuania including those with Lithuanian parts as retaliation for allowing Taiwan to open a representative office in Vilnius, the Middle Kingdom’s wolf warrior diplomacy has started targeting global supply chains. The Chinese import sanction on tiny Lithuania is a veiled threat to other members of the European Union (EU) not to question Beijing. Fact is that the Xi Jinping regime is targeting global supply chains to punish a small country. While a Chinese spokesperson denies blocking imports containing Lithuanian components, the hit is on German automotive suppliers as their precious cargo is said to be languishing at Chinese ports. The German automotive industry players as well as multinational companies, reeling under Chinese potent action, are already putting pressure on Lithuania to rename the Taiwanese office in Vilnius and warning the tiny EU country to back down as German subsidiaries are at risk.

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Angry Xi Jinping uses trade muscle to hurt Lithuania for backing Taiwan; Hits global supply chains

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Russia rules out any concession at Ukraine, security talks with US

Russia ruled out any concession at talks with the United States on soaring tensions over Ukraine as Moscow seeks a wide-ranging new security arrangement with the West but faces strong pressure to pull back troops. Russia’s deputy foreign minister Sergei Ryabkov told Russian news agencies ahead of his talks in Geneva the Kremlin was also “disappointed” with signals coming from both Washington and Brussels, where NATO and the European Union are based. The high-level discussions start a week of diplomacy in which Russia will meet with NATO and the Organization for Security and Cooperation in Europe (OSCE), with the US trying to assure European allies they will not be sidelined.

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Sri Lanka seeks Chinese debt reschedule for crashing economy

Cash-strapped Sri Lanka sought to reschedule its huge Chinese debt burden in Sunday talks with visiting foreign minister Wang Yi, the president’s office said. The island’s tourism-dependent economy has been hammered by the pandemic and its depleted foreign exchange reserves have led to food rationing at supermarkets and shortages of essential goods. Key ally China is Sri Lanka’s biggest bilateral lender and Wang’s visit comes after a warning from international ratings agencies that President Gotabaya Rajapaksa’s government could be on the brink of default. Sri Lanka’s foreign reserves had dropped to just $1.5 billion at the end of November — enough to pay for only about a month’s worth of imports. China accounted for about 10 percent of Sri Lanka’s $35 billion foreign debt to April 2021, government data shows.

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Federal Reserve puts wheels in motion for balance sheet reduction

The Federal Reserve at its December meeting began plans to start cutting the amount of bonds it is holding, with members saying that a reduction in the balance sheet likely will start sometime after the central bank begins raising interest rates, according to minutes released. While officials did not make any determination about when the Fed will start rolling off the nearly $8.3 trillion in Treasurys and mortgage-backed securities it is holding, statements out of the meeting indicated that process could begin in 2022, possibly in the next several months. Market expectations currently are for the Fed to start raising its benchmark interest rate in March, which would mean that balance sheet reduction could start before summer. The minutes also indicated that once the process begins, “the appropriate pace of balance sheet runoff would likely be faster than it was during the previous normalization episode” in October 2017.

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What investors need to know about the Fed’s December meeting minutes

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World tops two million new daily Covid cases

The world recorded more than two million daily coronavirus cases on average between January 1 and 7 with figures doubling in 10 days, an AFP tally showed on Saturday. New global case numbers have soared by 270 percent since the highly contagious Omicron variant was discovered in South Africa in late November. But Covid-related deaths were at their lowest level since October 2020, with an average of 6,237 per day recorded in the period between January 1 and 7. Although early studies suggest Omicron causes less severe illness, experts have warned the sheer volume of cases fuelled by the strain could still overwhelm health systems. Europe, as well as the United States and Canada, are the world’s infection hotspots. The two regions respectively represented 49 percent and 33 percent of global Covid cases in the past week. Covid cases skyrocketed by 47 percent in Europe and 76 percent in the United States and Canada compared with the previous week.

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China’s Chang’e 5 lunar probe finds first on-site evidence of water on moon’s surface

China’s Chang’e 5 lunar lander has found the first-ever on-site evidence of water on the surface of the moon, lending new evidence to the dryness of the satellite. The study published on Saturday in the peer-reviewed journal Science Advances revealed that the lunar soil at the landing site contains less than 120 parts-per-million (ppm) water or 120 grams water per ton, and a light, vesicular rock carries 180 ppm, which are much drier than that on Earth. The presence of water had been confirmed by remote observation but the lander has now detected signs of water in rocks and soil. The Chang’e-5 spacecraft landed on one of the youngest mare basalts located at a mid-high latitude on the moon. It measured water on the spot and retrieved samples weighing 1,731 grams.

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Cyprus detects new ‘Deltacron’ Covid variant, says report

Cyprus has detected a new variant dubbed as “Deltacron”, that has a similar genetic background to the Delta variant, coupled with 10 mutations from Omicron. Studies have shown that the co-existence of Delta and Omicron increases the chances of a new variant as a result of them trading genes. In line with this, France recently detected a variant with 46 mutations, and was dubbed as IHU. The new variant from the lineage named B.1.640.2 is believed to have infected 12 people in the country, according to the yet-to-be peer-reviewed study supported by the French government. While it may pose a greater risk than Omicron, touted as highly transmissible but mild in infections and less lethal than previous the Delta variant, researchers said, “it is too early to speculate on virological, epidemiological or clinical features of this IHU variant based on (just) 12 cases”.

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2) India 

Covid update

Daily Covid cases could hit 3 million if India goes US way: Nomura

India’s daily Covid-19 cases could hit as high as three million a day if the Omicron-driven third wave follows the same trajectory as that in the United States, financial services firm Nomura said, warning that the healthcare system could be overwhelmed. The caseload could be smaller at 740,000 a day if the per million infection are similar to South Africa, it said.Nomura cautioned that the third wave will not only lower growth, but also raise inflation, which will push the Reserve Bank of India (RBI) into policy normalisation (repo rate hikes) from April onwards.The firm sees growing macro risks for India going forward. Nomura said in some countries in emerging Asia such as India, the Philippines and Indonesia, where the fully vaccinated share of the total population was only around 45%, healthcare systems could be overwhelmed owing to the sheer number at risk of being infected with the Omicron variant.

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Is Omicron mild or should we worry, here’s what data & science from South Africa & UK tells us

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Other updates

Ex-RBI Governor Urjit Patel appointed Vice President of AIIB

Former RBI Governor Urjit Patel has been appointed as a Vice President of the Beijing-based multilateral funding institution AIIB, according to sources in the bank on Sunday. India is a founding member of the Asian Infrastructure Investment Bank (AIIB) with the second highest voting share after China. It is headed by former Chinese vice minister for finance Jin Liqun. Patel’s posting to AIIB is regarded as significant as India has emerged as its biggest beneficiary by obtaining USD 6.7 billion funding for 28 projects. Also, the AIIB along with the Asian Development (ADB) is processing a USD two billion loan for India to purchase COVID-19 vaccines. The AIIB had recently granted USD 356.67 million loan for the expansion of the Chennai metro rail system. It is also considering funding several other infrastructure projects for the development of Chennai city and its suburbs. The bank has also funded the Bengaluru metro rail project.

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3) Economy

Domestic ratings agencies lower FY22 growth estimate to 8.5-9.3% on 3rd wave

Two domestic ratings firms cut their projections on India’s fiscal 2022 economic growth to 8.5-9.3% from 9.4-10% estimated earlier, citing a possible impact of the third wave of Covid-19 led by a more infectious Omicron variant. Brickwork Ratings revised its estimate on India’s GDP to 8.5-9% from 10%, while India Ratings & Research cut its forecast to 9.3% from 9.4%. “For the full fiscal, we expect agricultural activities to be resilient as usual, while the manufacturing and services sectors will bear the brunt if the current situation prolongs further, Brickwork Ratings said. For the fourth quarter, India Ratings estimates GDP growth to be 5.7% year-on-year. The new outlook is 0.4 percentage point lower than its earlier estimate of 6.1%. On Wednesday, ICRA shaved 0.4 percentage point off its previous estimate for January-March, and now projects the economy to grow 4.5-5% this quarter.

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Indian GDP may grow 9.2% this fiscal on base effect

India’s economy is expected to grow 9.2% in the current financial year, aided by the base effect of 7.3% contraction last year, according to the first advance estimates by the National Statistical Office (NSO) released on Friday. The strong growth will lift real gross domestic product (GDP) 1.3% over the pre-Covid levels of FY20, but the underlying data showed consumer stress and weakness in the contact-intensive services sector. The estimated growth is below the Reserve Bank of India’s pre-third wave projection of 9.5% last month. The nominal gross domestic product (GDP) is forecast to rise 17.6% in the year against the budget estimate of 14.4% for the current year, underscoring high inflation. Gross value added (GVA) is projected to grow 8.6% compared with a contraction of 6.2% in FY21.

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India to overtake Japan as Asia’s 2nd largest economy by 2030: HIS

India is likely to overtake Japan as Asia’s second-largest economy by 2030 when its GDP is also projected to surpass that of Germany and the UK to rank as world’s No.3, IHS Markit said in a report on Friday. Currently, India is the sixth-largest economy in the world, behind the US, China, Japan, Germany and the United Kingdom. “India’s nominal GDP measured in USD terms is forecast to rise from USD 2.7 trillion in 2021 to USD 8.4 trillion by 2030,” IHS Markit Ltd said. “This rapid pace of economic expansion would result in the size of Indian GDP exceeding Japanese GDP by 2030, making India the second-largest economy in the Asia-Pacific region.” By 2030, the Indian economy would also be larger in size than the largest Western European economies of Germany, France and the UK.

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4) Markets, Banking and Finance

Smaller firms wary amid shift away from Libor, say banks

Despite the move away from the London Interbank Offered Rate (Libor), several corporate borrowers, especially smaller Indian companies, are reluctant to embrace alternative reference rates, fearing changes in borrowing cost and, to some extent, due to lack of awareness, bankers said. The global transition from Libor was necessitated after British financial authorities decided to phase it out in 2017 after discovering that some large banks manipulated the reference rate up or down by providing false data. Traditionally, the interest rates for most Indian corporates availing of external commercial borrowings (ECBs) are benchmarked to the three-month or six-month Libor rate.

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5) Business

Eyeing agri market, Australia offers tariff sops on 99% Indian imports

Australia has offered to offer tariff concessions to 99% of its traded items with India beneath the proposed bilateral unfastened trade agreement in lieu of starting India’s dairy and agriculture sectors via low or zero price lists. Canberra is eager to export dairy products, grains, oilseeds, and processed meals to India. the two aspects intend to complete the talks for a meantime deal, referred to as early harvest in exchange parlance, by the end of the month. “Australia has indicated to make their import duties zero on 99% goods at the time of entry into force of the agreement,” stated an official. Piyush Goyal who is the Commerce and industry minister on Monday stated that the interim agreement with Australia will cover “large areas of interest particularly our labor-oriented sectors like textiles, pharma, footwear, leather products, and agricultural products”. The two nations have accepted to conclude a long-pending FTA known as a comprehensive economic cooperation agreement by the end of 2022.

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$240 million delivered, Mukesh Ambani-led Reliance Retail picks up 25.8% stake in Dunzo

Reliance Retail said it has led a $240 million funding round in quick commerce firm Dunzo and will now own 25.8% stake in the Bengaluru-based startup, marking the oil-to-technology conglomerate’s entry into the ultra-fast commerce sector. Post this deal, Reliance Retail is now the largest shareholder in Dunzo. Kabeer Biswas, cofounder and chief executive of Dunzo, told ET that partnering with the largest retailer in the country will give it a ‘massive leg-up’ against competitors and that both the companies are looking to collaborate on the supply chain side. Reliance’s entry into the rapidly expanding quick commerce space comes at a time when significant investments are being poured into startups such as Blinkit (earlier Grofers), Mumbai-based Zepto and Swiggy’s Instamart. Tata-owned BigBasket is also expected to start its 15-30-minute delivery service soon.

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Dunzo exclusive interview on Reliance Retail buying 25.8% stake

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Auto retail remains in the slow lane in December led by poor two-wheeler sales

Vehicle retail in the country during December was lower compared to last year for the fourth straight month led by tepid demand for two-wheelers, vehicle registration data show. Vehicle registrations with regional transport offices, which are a good proxy for retail, declined 16% year-on-year during December. Two-wheelers, the most popular mode of personal transport in India, saw a 20% decline in registrations. Sharp price increases over the past two years, high fuel costs, poor rural sentiment and work from home kept customers away from showrooms, especially in the entry-level segment.

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Maruti Suzuki lines up its biggest annual product onslaught

After a hiatus of almost two and a half years and braving through two waves of Covid-19, Maruti Suzuki has lined up more product launches in 2022 than the market leader has done ever during a year in the past. The maker of the Swift and Baleno will be launching more than half a dozen products this year. Half of these will be in the fast-growing SUV space and the rest in its core area of small cars. An updated product range at Maruti Suzuki would mean its global alliance partner, Toyota Motor, too would spruce up its portfolio in 2022. The new products could help the local unit of Suzuki Motor seize its lost market share, but also help the automaker reach the 2-million annual sales mark which has been alluding it for the last few years.

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6) Technology

RBI sets up fintech department to focus on the ‘dynamically’ growing sector

The Reserve Bank of India (RBI) has set up a fintech department to focus on the “dynamically” growing financial sector, reports said on January 9, citing an internal circular of the central bank. “With a view to give further focus to the area and facilitate innovation in fintech sector in keeping pace with the dynamically changing financial landscape, it was decided to set up a fintech department in the Bank,” states the internal circular, which has been accessed by media publications. The new department has been created with effect from January 04, 2022, by subsuming the FinTech Division of Department of Payment and Settlement Systems, Central Office (DPSS, CO). The department will not only promote innovation in the sector, but also identify the challenges and opportunities associated with it and address them in a timely manner, the circular stated. It will also provide a “framework for further research on the subject that can aid policy interventions by the Bank.

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“Groww brings on board Microsoft chief Satya Nadella as an investor, advisor

Online investment platform Groww’s founder Lalit Keshre said that Microsoft CEO Satya Nadella has joined the company as an investor and advisor. In April last year, Groww raised $83 million led by Tiger Global, making its way into the coveted unicorn club. Within the next six months, the investment platform raised another $251 million in a new round of funding, tripling its valuation to $3 billion, or about Rs 22,500 crore. Groww joined the likes of leading fintech unicorns like Razorpay and Pine Labs which grew their valuation to $7.5 billion and $3.5 billion, respectively, through successive fundraises, last year.

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PhonePe claims one in four Indians now uses its app

PhonePe logged an annualised total payment value of $651 billion in December from a user base of 150 million monthly active users, the fintech platform said on Friday. The company has signed up 350 million users so far, meaning one in four Indians now use PhonePe, according to a statement. The registered user base has grown 28% over the past 12 months—from 273 million in January 2021 to 350 million in December 2021. Sonika Chandra, PhonePe’s head of consumer platform and payments, said, this “phenomenal growth”, was driven by PhonePe’s technology team and its relentless pursuit of delivering the highest end-to-end transaction success rates in the industry, as well as its offline sales efforts in building the largest merchant acceptance network in India.

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Zomato-backed Shiprocket to acquire 75% stake in Wigzo Tech

Ecommerce shipping firm Shiprocket said it has “committed” to acquire a 75% stake in customer data platform (CDP) Wigzo Tech. The proposed strategic acquisition will enable Shiprocket to expand its product stack for online retailers onboarding its platform, among others, the startup said in a release without disclosing the deal size. Wigzo Tech specifically caters to the dynamic needs of ecommerce and D2C brands. Shiprocket had last month raised $185 million in Series E-round, and said that the proceeds will be utilised for acquisitions and business expansion, among others. According to Shiprocket, the two brands will complement each other to deliver a superior customer experience by solving critical pain points faced by e-commerce sellers.

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B2B payments fintech Rupifi raises $25 million led by Bessemer, Tiger Global

Digital payments startup focused on business-to-business payments, Rupifi has raised $25 million as a part of its first round of institutional funding led by Bessemer Venture Partners and Tiger Global. Existing Investors Quona Capital and Ankur Capital also participated in the round, along with Silicon Valley-based early-stage investor, Better Capital. Rupifi’s Series A funding of $25 million signals the increasing size of early-stage rounds being raised by Indian startups. This is Rupifi’s second investment round within a span of nine months after the company raised $4.1 million led by Quona Capital in March 2021. Rupifi now plans to use the proceeds from the fundraise to build the complete B2B checkout product for marketplaces as well as launch omnichannel mobile-first B2B payments solutions for merchants, distributors and sellers.

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7) Politics

Explained: Germany’s election year 2022 — What’s in store for German politics?

There are four state elections set for this year for the German parties to fight. While the high-flying Social Democrats want to consolidate their power, the conservative Christian Democrats need to win back voters. Last year, Angela Merkel’s conservative party gave up a healthy lead in the polls to record its worst-ever result and dump the party into opposition for the first time in 16 years. The shock precipitated internal recriminations, the resignation of senior party figures, and a new leadership battle, which will be resolved in January. Meanwhile for the election winners, the Social Democrats (SPD) under new Chancellor Olaf Scholz, the next elections cannot come soon enough: Now would be an excellent time for the center-left party to take advantage of its success by expanding its power in the upper house of the German parliament, the Bundesrat, which is made up Germany’s 16 state governments.

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PM’s security breached: What went wrong in Punjab?

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8) Sports

England shuttlers pull out of India Open badminton after 2 positive cases in contingent

The entire England badminton contingent has withdrawn from the upcoming India Open after the country’s doubles specialist Sean Vendy and coach Nathan Robertson tested positive for the COVID-19. England’s decision to pull out was made public by the Badminton Association of India (BAI). The organisers, however, said that COVID tests of all players conducted this morning at the team hotel came out negative. The India Open will be held at the national capital from January 11 to 16 amid a spike in COVID-19 cases across the country.

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Khawaja twin centuries lifts Australia to big lead

Usman Khawaja’s stunning return to test cricket continued with a blistering century in Australia’s second innings on day four which led the hosts to 265-6 declared and set England an unlikely 388 runs to win the fourth Ashes test. Openers Zak Crawley and Haseeb Hameed then survived a nervous 11 overs in fading light to get England safely to stumps at 29 without loss. Khawaja is playing this test only because of Travis Head testing positive for COVID-19 ahead of the match, but has surely put in a undeniable claim to be retained for the fifth test in Hobart after back-to-back centuries.

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Australia rushes to file defence of Djokovic ban as court battle looms

Australian authorities scrambled on Sunday to file a legal defence of their decision to bar entry to tennis world number one Novak Djokovic over his COVID-19 vaccination status, as the Serbian superstar spent his fourth day in immigration detention. Djokovic was hoping to win his 21st Grand Slam at the Australian Open, starting next week, but instead of training has been confined to a hotel used to accommodate asylum seekers. He is challenging the decision to cancel his visa after being stopped on arrival at Melbourne Airport early on Thursday. A vocal opponent of vaccine mandates, Djokovic had declined to reveal his vaccination status or reason for seeking a medical exemption from Australia’s vaccine rules. The Melbourne drama has rocked world tennis, caused tensions between Serbia and Australia and become a flashpoint for opponents of vaccine mandates around the world.

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Bharath Subramaniyam becomes India’s 73rd Chess Grandmaster

Fourteen-year-old Bharath Subramaniyam on January 9 became India’s 73rd chess Grandmaster, securing the third and final GM norm at an event in Italy. The Chennai-based player scored 6.5 points from nine rounds along with four others to finish seventh overall in the event held at Cattolica. He obtained his third GM norm and also touched the requisite 2,500 (Elo) mark. Bharath achieved his first GM norm after securing 11th place at the Aeroflot Open in Moscow in February 2020. He secured the second norm after placing 4th in the Junior Roundtable Under 21 tournament in Bulgaria with 6.5 points in October 2021. To become a GM, a player has to secure three GM norms and cross the live rating of 2,500 Elo points.

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9) Opinion

New variant ‘IHU’ identified: Is the B.1.640.2 strain riskier than Delta or Omicron?

The Covid variants Delta and Omicron have played havoc in India and around the world. Adding to the worry is the new strain – ‘IHU’ – that was identified in France. It was named IHU because it was first identified at the IHU Mediterranee Infection institute in Marseille. Also known as the B.1.640.2 strain, the World Health Organization (WHO) said that it may be of Cameroonian origin. The new strain was seen in 12 people living in the same geographical area of southeastern France. One man, who returned from a Cameroon trip last month, was the first to get detected with IHU. Experts believe it’s too early to predict and speculate the virological, epidemiological, and clinical features of this variant with limited available data. However, if the IHU variant is reported to have a significantly large number of mutations, Dr Dipu, TS, Associate Professor, Division of Infectious Diseases, Department of Internal Medicine, Amrita Hospitals, Kochi, said that it could have a serious public health complication in any country. “The emergence of the new variant clearly reflects the requirement of increasing the genomic surveillance of SARS-CoV-2 for detection and closely following up for knowing the epidemiological trajectory of the spread of infections,” he added.

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Automotive Industry at full throttle as Dubai enters a New Growth Phase

Dubai has successfully positioned itself as an international automotive hub. This is evident in the spectacular growth of the automotive sector in recent times notwithstanding the Covid-19 pandemic which has disrupted the global economy in more ways than one. Ideal location, increasing domestic demand for high-end cars and a robust logistics sector have turned the emirate into a major exporter and re-exporter of vehicles, observe industry analysts. Dubai’s growing significance as the world’s leading automotive hub gained further strength when DP World recently acquired the US-based specialists in global automotive and supply chains – Syncreon – for an enterprise value of $ 1.2 billion. The move further strengthens DP World’s end-to-end logistics. “The acquisition will add significant expertise in the wider supply chain and excellent relationship with cargo owners,” said group chairman and CEO, DP World Sultan Ahmed Bin Sulayem.

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‘Bulli Bai’ case, why it’s rooted in the unpunished ‘Sulli Deals’, young suspects & what’s GitHub

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10) Weekly special

Edtech industry on the course to a Grade A future

The edtech industry in India is buzzing with big players making it to the news every day. Listen to an interesting panel discussion who share insights on the same.

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With that, we come to an end for our Weekly Current Affairs January 2022 -Week 2. Hope you have liked it. Write your feedback in the comments below and let us know if there is anything else you would like us to cover.

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