Since it was first reported on 31st December 2019 in Wuhan, China, the Coronavirus disease (COVID-19) outbreak has gone global. Classified as a “high risk” threat globally by the World Health Organization (WHO), COVID-19 has infected 75,748 globally and caused 2,129 deaths worldwide, virtually shutting down China, one of the largest engines of the global economy -- and the effect on global trade is beginning to show. Indian exporters, particularly in the seafood sector, have been hit particularly hard, and now FIEO has warned that the pain might spread to other sectors too as the global supply chain gets disrupted. Pharma, in particular, has faced a lot of scrutinies, with the government banning exports of several drugs and medical equipment to prioritize them for domestic consumption. However, industry stakeholders, such as Biocon’s Kiran Mazumdar Shaw, feel that the ban will do more harm than good, and that trade should be allowed to continue alongside domestic stockpiling. As fear and uncertainty spread in the coming weeks, the government needs to ensure it is safeguarding Indian trade as well as the health and safety of its citizens. Meanwhile, US President Donald Trump is scheduled to arrive in India for a two-day visit on 24th and 25th February. This is Trump’s first official visit as President and it comes at a particularly tumultuous time in the bilateral relationship. While Trump and Indian Prime Minister Narendra Modi share a good personal relationship, the US President has publicly stated he’s “saving a big trade deal with India for later”. It remains to be seen whether the bilateral trade between the two nations will receive a shot in the arm from Trump’s visit, or not.
Trade Update
22ND FEBRUARY
# 59
The effect of coronavirus on the Chinese economy, global demand, and supply chains are starting to be felt and the big question now is does this get contained within a quarter or does it go beyond? Talking about the impact it is having on India’s external trade, Mahesh Keyal, Vice President of the Federation of Indian Export Organisations (FIEO) said, “Indian exports have been very badly impacted. There are two parts – one is the direct exports from India to China -- the majority of the manufacturing facilities in China have either stopped production or are working at a very low level.”
Indian authorities need to make sure that all people entering the country are screened in the bid to counter the spread of coronavirus, Kiran Mazumdar Shaw, the Chairman and Managing Director of Biocon told CNBC-TV18 in an interview at the sidelines of the 17th Bio-Asia Convention. “We need to be in a state of preparedness and that state of preparedness starts with screening people, with making sure that all visitors entering India are properly screened and that is happening at our airports. I am sure it is happening at all entry points in India, which is the first step that we need to take,” she said.
GlaxoSmithKline India (GSK), one of the largest manufacturers of branded paracetamol in India, said it does not anticipate any supply shortages “at the moment” due to the Covid-19 outbreak in China. There has been some panic over the shortage of essential medicines in India and across the world. GSK India manufacturers Crocin. “We don’t foresee any shortage -- at least till May,” A Vaidheesh, Head, India, GSK, told ET.
President Donald Trump cast doubts over the likelihood of an anticipated trade deal with India on 18th February, just days before a scheduled visit to the South Asian power. “Well, we can have a trade deal with India, but I’m really saving the big deal for later on,” Trump told reporters as he left the White House for a trip to California. Trump last year kicked India out of a program for developing countries that gave some Indian exports tariff-free access to the US market.
MSME Minister Nitin Gadkari has urged the industry to use waterways as a mode of transportation for goods to reduce costs and become competitive in the export market. Speaking at a conference on ‘Developing A Roadmap for Low Carbon & Sustainable Mobility in India’, organized by FICCI, Mr. Gadkari said, “This is the appropriate time. We have the best technology; economic viability and we need public-private investments. To support these, we have government policies.”
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