COVID-19 | Steps soon to deal with coronavirus impact on Indian industry, says Nirmala Sitharaman

Finance Minister meets industry leaders.

Disruption in supply of raw materials from China due to the coronavirus outbreak could have a serious impact on several Indian industries, especially the pharma sector, industry leaders told Finance Minister Nirmala Sitharaman at a consultation on the issue on Tuesday.

Speaking to journalists after the meeting, Ms. Sitharaman downplayed fears of any immediate price rise of medicines or other products, saying there were no reports of immediate shortages. However, official sources present at the meeting said most sectors have three to four weeks of raw materials available, adding that the longer-term impact is still uncertain.

In fact, the pharma sector has suggested that if necessary, active pharmaceutical ingredients (APIs) could be airlifted to India, sources said. As this would push up prices, industry representatives requested that customs duties be reduced if such a situation occurs, said officials.

Ms. Sitharaman said the Secretaries of the Finance Ministry would coordinate meetings with secretaries of other stakeholder Ministries on Wednesday to chart a government response to the outbreak and the issues raised by industry leaders.

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Measures would be announced “soon”, after consultations with the Prime Minister’s Office, Ms. Sitharaman said.

Some of the major issues raised include quarantine paperwork blocking the import of goods, worries about congestion at ports in the future due to the staggered and disrupted supply lines and requests that banks be flexible with regard to repayment receipts, said Ms. Sitharaman. However, she added that several industries, including pharma, chemicals, fertilisers and solar energy promoters and manufacturers, saw opportunity in the crisis. They felt this would be the best time for them to start up new units, so that India is not dependent on imports from China, and can use this as an excuse to expand capacity, she said.

According to an analysis by the Confederation of Indian Industry (CII), submitted to the Centre, China supplies 43% of India’s imports of the top 20 goods, that India buys from the coronavirus-affected country, including mobile handsets ($7.2 billion import from China), computers ($3 billion), integrated circuits, and other inputs ($7.5 billion), fertilisers ($1.5 billion), APIs ($1.4 billion) and antibiotics ($1.1 billion).

The industry body requested that a task force be set up to address the spillovers of the epidemic affecting China. “The coronavirus pandemic in China is impacting critical inputs for Indian industry which may adversely impact small businesses and some jobs. A joint government-industry task force can institute risk mitigation measures on an immediate basis,” said CII Director-General Chandrajit Banerjee. “While the situation is serious, there is no call for panic as Indian industry is resilient and can enhance domestic production to meet temporary shortfalls,” he added.

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