Indian exporters are keeping their fingers crossed against the backdrop of rising Covid-19 infections in China and other countries as it could disrupt supply chains and demand for goods.
Major goods imported from China included electronic items, organic and inorganic chemicals, medicinal and pharmaceutical products, fertilisers, crude and manufactured and dyeing/tanning/colouring materials.
Also Read | Five foreigners test positive for COVID-19 in Bodh Gaya
Ajay Sahai, Director General at Federation of Indian Export Organisation (FIEO), said if COVID cases continue to increase in the coming days, it may have implications on imports. “We are keeping our fingers crossed,” he said.
Also Read | India’s agri & allied commodities export up 12% in April-October to $ 30 billion
Sahai mentioned if Chinese industries start shutting down due to rise in Covid cases, it would impact imports of key components for sectors such as pharmaceuticals, electronics and automobiles. “If the situation persists, then there would be issues,” he added.
China, India’s largest trading partner, reported an 11 per cent decline in imports in November, and the latest outbreak could further hit exports of Indian goods, according to a report by Mint.
Track latest updates on Covid, here.
Anil Devli, chief executive at Indian National Shipowners Association (INSA), told Mint, “There is no delay as far as cargo movement is concerned. One thing that we need to bear in mind is that we are post-rush. Usually, in September and October, there is a huge rush. December, in any event, is a very light moment as far as container cargo is concerned. So, there is no stress on the system as of now.”
Tea exports
Tea exports to China fell over 28 per cent between January and September to $ 8.29 million, compared with $ 11.6 million a year ago. Tea exporters dealing with the China market said the covid outbreak in China would add to the concerns already faced by tea traders, the report added.
Sujit Patra, secretary (exports) of the Indian Tea Association told Mint, “China is the largest tea consumer, but they are basically green tea consumers. In the past few years, black tea consumption in China has been gaining popularity and India happens to be a prominent black tea producer. Exporters have not yet complained about orders, but there is a fear of the impact on orders due to the covid outbreak in China.”
Also Read | Tea exports rise 14.8% to 140.28 mkgs in Jan-Aug period this year
An exporter, requesting anonymity, told Mint, China is lucrative for tea but also challenging because of political tension and deliberate blocking of shipments due to alleged pesticide levels. This has had a negative impact on tea exports from India, the exporter said, adding that Indian companies are still getting orders from China.
Pharma
Indian drugmakers have reported no shortages, but have warned of a potential increase in the prices of key raw materials for drugs, the report further said.
Uday Bhaskar, director general of Pharmexcil, told Mint, “There are no reports of shortages. It is too early to assess the situation, but the impact on Indian pharma manufacturing cannot be ruled out. But barring a few weeks during the first wave of covid-19, China has refrained from stopping the supply of pharma items. Prices could rise, particularly of APIs, key starting materials and solvents.”
Whereas, Saket Dalmia, president of PHDCCI, told Mint, “Export orders are typically placed 3-4 months in advance and, currently, exporters’ order books are full. We will only be seeing covid’s impact by the first quarter of next fiscal. Engineering goods, agri-related commodities and iron ore could be hit.”
Also Read | Gems and jewellery industry achieved its annual export target of $ 48 billion till last quarter of FY23
Engineering exportsArun Kumar Garodia, chairman of the engineering exporters’ body EEPC India, told Financial Express, “Our exports to China in December may fall at a steeper pace than in November.” Engineering exports to China crashed by 40% in November, far worse than a 0.3% fall in total such exports during the month to $ 8.1 billion.
Also Read | Indian engineering goods exports to China drop 40% in November, shipments to US rose 14%
Thanks to the global turmoil and the Covid surge in China, India’s engineering exports, which account for roughly a fourth of the overall merchandise despatches, may even drop from the last year’s level of $ 112 billion, he added. However, Garodia expected Covid cases in China to ease from January, which should bring back some normalcy in exports to the neighbour.
According to a PTI report, Hand Tools Association President Subhash Chander Ralhan said that if Covid cases increase further, it would pose problems for industry here.”We import key raw materials for sectors like chemicals and engineering from China,” Ralhan said.
He suggested that the government should consider stopping flights from China to contain the spread of the Covid cases.
Sharad Kumar Saraf, founder chairman of Technocraft Industries India, shared similar views and said the exporting community is concerned due to rising infections in China.
“Rising cases are cause of concern for us. Our pharma industry is dependent on China. In my factory there, we are witnessing 40 per cent absenteeism,” Saraf said.
According to a report by Financial Express, the fall in overall exports to China until October this fiscal was driven by a plunge in supplies of ores, slag & ash (80.8 per cent), iron & steel (79.2 per cent), aluminium and such articles (83.9 per cent), cotton (94.4 per cent), copper and articles (67.9 per cent) and electrical machinery, equipment, etc (40.1 per cent).
Moneycontrol could not independently verify the report.
Prime Minister Narendra Modi on Sunday asked people to be vigilant and take precautions against COVID-19, as he noted that the virus is spreading in many countries.
The central government has stepped up measures to prevent spread of the virus as cases rise in the country, especially after China lifted the zero-Covid policy which caused a wide spread of the virus.
India saw 196 new coronavirus infections on Monday, while the active cases marginally increased to 3,428. The case tally stands at 4.46 crore. The death toll now stands at 5,30,695.
With inputs from agencies
