<story><title>To Understand Jio, You Need to Understand Reliance</title><url>https://diff.substack.com/p/to-understand-jio-you-need-to-understand</url></story><parent_chain></parent_chain><comment><author>reactspa</author><text>This article delivers a very good understanding of what it&amp;#x27;s like to be an entrepreneur in India. Kudos.&lt;p&gt;One of the coolest things I&amp;#x27;ve read about Jio is something I read on a previous post on HN: that the name and logo were designed to be the mirror image of oiL.&lt;p&gt;&amp;gt; Later, Reliance profited from other parts of India’s protectionist regime. Their synthetic fiber arbitrage worked like this: to make manufacturers self-sufficient, the Indian government allowed them to import raw materials only in proportion to the goods they exported. Ambani persuaded the government to let him import polyester filament yarn in proportion to the nylon goods he exported. Nylon was available cheaply in India, polyester filament was 600% more expensive when locally sourced in India than its cost when imported. So Ambani set up a closed loop: make nylon clothes from locally-sourced materials; sell them abroad; use the import quota to import polyester filament; sell it at home. And, just to be safe, he took care of the demand side, too: at least according to The Polyester Prince, Ambani sent money abroad to buy his own products at duty-free ports, and then sold them for cheap, gave them away, or even dumped them in the ocean.&lt;p&gt;All true except in many cases, the exporters didn&amp;#x27;t need to actually export anything. If the right bribes were paid (Congress Party&amp;#x27;s modus operandi), it was all a &amp;quot;receipts game&amp;quot;... you just needed receipts that &amp;quot;proved&amp;quot; that you had sent goods abroad, that money had hit the bank, etc.&lt;p&gt;There was a huge fertilizer subsidies scam in India a couple decades ago which was another case of &amp;quot;receipts game&amp;quot;. (The scam involved subsidies [given by the government] for using fertilizer [similar to Agricultural Subsidies in the USA]. Turns out that most of the subsidies were going to politicians who weren&amp;#x27;t using any fertilizer, they were just providing the correct receipts that &amp;quot;proved&amp;quot; that they had bought -- and presumably used -- fertilizer.)&lt;p&gt;Finally, I worked at a bank in India for a short while, just after the major devaluation of the currency in the nineties (the Indian Rupee was devalued by over 50% in two phases). Around midnight, the day before the surprise announcement by the Reserve Bank of India (and the Government of India), a bunch of treasury operations staff at the bank got marching orders to go to the office and sell off, as much as they could, the Indian Rupee, and buy foreign currencies. They worked all night. The client made millions from this bank&amp;#x27;s operations alone. The client? Reliance.</text></comment>
<story><title>To Understand Jio, You Need to Understand Reliance</title><url>https://diff.substack.com/p/to-understand-jio-you-need-to-understand</url></story><parent_chain></parent_chain><comment><author>samdung</author><text>For those looking for the banned book &amp;quot;The Polyester Prince: The Rise of Dhirubhai Ambani&amp;quot; ... here&amp;#x27;s the link to donwload: &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.dropbox.com&amp;#x2F;s&amp;#x2F;e1kdqqnqpl9uhfv&amp;#x2F;The-Polyester-Prince.pdf?dl=0&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.dropbox.com&amp;#x2F;s&amp;#x2F;e1kdqqnqpl9uhfv&amp;#x2F;The-Polyester-Prin...&lt;/a&gt;</text></comment>