India- Coronavirus will impact export-import, say MSMEs
Coronavirus has infected hundreds since the outbreak began in Wuhan, China, in December last year and has brought Indian industries to its knees, who are largely dependent on China for several raw materials to manufacture their finished products and goods.
There is also decline exports in January by 1.66 per cent at USD 25.97 billion during the month.
With major global players including China, which is now facing an epidemic like situation, is not only losing its sheen in exports but has dented its economy in a big way.
To get into more details, KNN India spoke to President of the Federation of Indian Micro and Small & Medium Enterprises (FISME) Animesh Saxena who asserted that it”s going to ruin Micro Small and Medium Enterprises (MSMEs) in the coming days.
”It will impact the import industry badly and to some extent it will disturb export industries also because many raw materials also come from China,” said FISME president.
”Imports include materials like Pharmaceutical and auto parts while exports include materials related to textiles which we export. So, there will be a disruption in both sectors long with prices of the commodity going up,” Saxena added.
When being asked that instead of depending on China, shouldn”t India develop such parks or base from where raw materials can be produce to feed the India industries, Saxena replied, ”as of now, we haven”t develop such a big base in manufacturing sector.”
”The world is moving towards the global value chain. Wherever, the best commodities price is available let it be there and the other activity of theirs should be in another country. So, expecting everything is one country is a tough task and this won”t be competitive,” he asserted.
”Producing everything in our country is a wishful thing but it”s not logical and practical,” he said.
On the other hand, a Lucknow based industrialist VK Aggrawal who is also past president of FISME opinined that industries like Pharmaceutical, electronics, renewable energy and telecom are heavily dependent on China due to which they will be brought down to their knees in the coming days.
”India will suffer a lot during this virus outbreak. Can”t say about the Gross Domestic Product (GDP) but banks will suffer, too” he said.
Aggrawal, further said that some are people of the view that in this scenario some Indian industries will bloom but what i feel is that we are not ready for that.
”If the opportunities come then also we won”t be able to make use of that because we are not prepared,” he added.
Meanwhile, Confederation of All India Traders (CAIT) has written to Union commerce minister Piyush Goyal urging him to convene a meeting of trade and industry immediately to discuss the current situation of Coronavirus impacting the trade and commerce of India.
The over-dependence on China for finished products, spare parts and raw material will cripple the trade and small Industries in India, if prevented steps are not taken by the Government to carve out alternate measures and bringing out an immediate policy to empower domestic trade and industry to maintain the supply chain.
Both B C Bhartia and Praveen Khandelwal, the President and Secretary General of CAIT, said that India”s trade and Industry is highly dependent upon China for broadly three reasons. We import finished goods which are re-distributed in the country, raw material which is being used for producing goods and import spare parts used in assembling the goods by traders and small Industries.
They further said, ”Since, coronavirus broke out in January, the trade and Industry in China is closed and there is no manufacturing or supply of goods. Because of the deadly virus, the Indian importers have stopped imports of China and have cancelled their visits to China or other coronavirus affected Countries. Generally, the importers keep stocks of these goods as a buffer stock for two months and now the situation has arisen when supply chain will get affected badly. The situation will become more vulnerable as it appears that even after resuming production in China, it will take months to have regular supplies from China.
They further said, ”Under long term measures, the government should also carve out ways and means to ensure that over-dependence on any country should not happen as it will cripple our economy