Indian exporters are concerned about the covid-19 spike in China as it may result to a decrease in demand in Western countries. The biggest trading partner of India, China, reported an 11% dip in imports in Nov. And the most current outbreak may have an even greater impact on exports of further Indian goods.
Although experts emphasised that the outbreak inside China will not have an immediate effect on Indian exports as orders for the following quarter have already been receive. China decision not to continue reporting daily covid-19 figures has significantly raised doubt about the extent of the spread.
Concern have been expresse over both direct exports by India and the short-term uncertainty that the current COVID crisis in China causes “said Arun Garodia, chairman of Engineering Export Promotion Council India.
Exports of engineering products. Which constitute over a fourth of all exports of goods, have been particularly hard hit by the drop in demand among the West and China. In Nov, it saw a fall for the sixth month in a row.
The International Monetary Fund (IMF) warned that there is a “medium likelihood” anything more contagious COVID-19 will arise in its Article 4 report. Which was published on Friday “may have an effect on India’s trade and economic growth.
“As far as moving cargo is concerned, there is no delay. We must keep in mind that there is no rush right now. Usually, there is a significant rush between Sept and Oct. But whatever circumstances, December is a relatively weak period for container traffic. Therefore, the system is not currently under stress “Anil Devli, the chief executive of Indian National Shipowners Association (INSA), said.
An official from the department of commerce noted that although imports of pharmaceutical raw materials have not been affecte thus far. It is closely monitoring the situation. “In light of the covid outbreak in China, the relevant divisions are monitoring the supply chain situation, “added he.
“The slowdown in China was pretty obvious for the previous few months, affecting the shipments of major products including mineral, iron ore, cotton, aluminium, copper, etc.,” said Ajay Sahai, director general & CEO of the Federation of Indian Export Organizations.
Due to Sri Lanka’s setback as well, we will be boosting tea exports to Russia to compensate for the loss.
How COVID-19 Outbreak in China can Impact the Indian Exporter?
Tea exports for China declined by nearly 28% in value between Jan and Sept, from $11.6 million – $8.29 million. The covid breakout in China, as per tea exporters working with the Chinese market, will further increase the concerns already carried by tea traders.
“China is the world’s largest consumer of tea, yet they primarily drink green tea. India continues to be a major producer of black tea. And consumption of black tea has been rising in China over the past few years.
Although exporters have not yet expressed issues about orders. They are worries about how the covid outbreak in China may impact them, according to Sujit Patra, secretary (export industries) of the Indian Tea Association.
China being lucrative for tea. But it’s also hard because of political chaos and deliberate late deliveries caused by alleged pesticide levels. According to an exporter who asked to remain anonymous.
The exporter claimed that this had a negative effect on Indian tea exports while pointing out that Indian businesses continue to collect orders from China.
As of the time of release, queries forwarded to the spokesmen for the ministry of commerce and industry and finance had not been answer.
Indian pharmaceutical companies, meanwhile, have not reported any shortages. But have issued a warning about a possible rise in the cost of essential medicine raw ingredients.
“There have been no shortage reports. Although it is too soon to judge the situation, it is possible. That it will have an effect on Indian pharmaceutical production. But except from a few weeks during the initial surge of COVID-19. China has avoided disrupting the supply of pharmaceutical supplies.
Uday Bhaskar, general director of Pharmexcil, warned that prices could increase, notably for APIs, essential starting materials, and solvents.
“Export orders are normally place three to four months in advance, and exporters currently have no open orders.
The effects of covid won’t be felt until the first quarter of following fiscal year. Iron ore, agricultural products, and engineering goods could be impacted, according to Saket Dalmia – President at PHDCCI.