NEW DELHI: The surge in Covid-19 cases in China has Indian manufacturers and traders worrying about another disruption in the supply chain like the one witnessed during the earlier Covid waves in 2020 and 2021.
Indian trade bodies are monitoring the Covid situation in China as there has been a massive surge in Covid cases there. China is the biggest trading partner of India and the latter imports important items such as mobile phones, electronic items, automotive parts, semiconductors, chemicals, pharmaceutical products, among others.
“So far, whatever we had ordered, we got it on time. However, we are monitoring the situation closely. We will have to wait for a few more days to know the exact impact,” said A Sakthivel, president, Federation of Indian Export Organisations.
Sudarshan Jain, secretary-general, Indian Pharmaceutical Association, said the Covid outbreak in China is a matter of concern and pharma firms are watching the supply chain and inventories of medicines.
“Learning from the lockdowns in three years has been immense and companies have been keeping adequate stock of active pharmaceutical ingredients, finished product formulations and channel availability… The API prices have increased significantly ever since Covid hit us. We are anticipating fluctuations in API pricing,” Jain added.
India imported $60 bn worth of goods from China in the first seven months of the current financial year, compared with the $8.8 bn it exported to China. The operations of automobile manufacturers, especially of electric vehicle makers, may get impacted if the situation in China deteriorates, but industry insiders say that as of now, the impact is not prominent.
Some firms have diversified their supply chain to minimise impact but most of the sector is still dependent on China for crucial parts, said a senior executive of an auto component company, who did not wish to be named.
China accounts for 25% of auto components import
The auto components imports in the Indian market grew 17.2% to $10.1 billion (Rs 79,815 crore) in the first half of FY23 from $8.7 billion (Rs 64,310 crore) in the first half of FY22, according to recent data shared by auto component body ACMA. China accounts for more than one-fourth of these imports. Telecom equipment and mobile manufacturing companies have maintained that the current situation in China is not going to hamper India’s telecom or mobile production.
They are of the view that China implemented a zero-Covid policy, not a lockdown. China recently eased its zero- Covid policy and from January 08, inbound travellers will no longer need to go through quarantine norms. People from the hotel and restaurant industry are also saying that there is no reason to panic. Pradeep Shetty, executive committee member, the Federation of Hotel & Restaurant Associations of India, told TNIE: “The government is aware of the developments across the world and if there were a concern with an increase in the number of Covid cases, we are sure that it’ll take the necessary measures.
However, as of now, there are no booking cancellations and hotels are proceeding with optimism. But yes, we will be taking necessary precautions and may bring back the Covid safe practices,” added Shetty. The hospitality industry, according to him, registered 125% growth this season compared to the pre-pandemic levels and is all set to ring in the Christmas and New Year festivities.