Viral Downward Spiral
As the COVID-19 outbreak spreads to more countries -- the World Health Organization (WHO) estimates there are nearly 98,000 confirmed cases in 87 countries around the world, with over 3,300 deaths -- the economic impact is becoming increasingly prominent. Markets have gone into a tizzy over the past week, with many global indices plummeting into the red as investor concerns grow. Most recently, the United Nations Conference on Trade and Development (UNCTAD) has also estimated that the outbreak could inflict near US$50 billion of damage to international trade.
Closer home, a CARE Rating report has said Indian exporters could lose almost US$13.4 billion worth of trade to China alone. Further adding to the economic pain, the government has also imposed an export ban on 26 major Active Pharmaceutical Ingredients (APIs) and formulations, in anticipation of heightened domestic demand. India confirmed its 30th coronavirus case this week, and concerns are rapidly mounting. Pharma body Pharmexcil, however, has petitioned the government to allow free export of drugs manufactured before 3rd March 2020, and for goods lying at ports.
With a lot of confusing information available online, it is recommended people refer to trustworthy sources like the WHO for steps to fight the possibility of infection, and to avoid the spread of misinformation. The Indian government should take active steps to assure citizens and businesses and stop fear from spiraling further in the country.
Coronavirus outbreak could lead to USD 50 bn trade losses: UNCTAD
The outbreak of the coronavirus disease (COVID-19) could inflict a US$50 billion damage to international trade, the United Nations Conference on Trade and Development (UNCTAD) said on 4th March (local time), citing its recent estimates of the situation. “The slowdown of manufacturing in China due to the coronavirus (COVID-19) outbreak is disrupting world trade and could result in a US$50 billion decrease in exports across global value chains, according to estimates published by UNCTAD on 4th March,” UNCTAD said in a statement.
India may lose this much in exports to China as coronavirus headwinds continue
With the Chinese economy facing headwinds of the coronavirus scare, India stands to lose billions of dollars in exports to the dragon nation. India is staring at a major fall in exports if China’s economy remains shut down for a year. “Considering that total exports in FY20 remain at the same level as FY19 and based on our earlier stated assumption of 80% loss in Indian exports to China, the total export loss would be around $13.4 billion,” a CARE Rating report said on 28th February.
Markets nosedive over coronavirus concerns
Continuing its downward spiral for the sixth straight session, the Sensex plummeted 1,448 points on 28th February following a global sell-off as investors feared the impact of the rapidly-spreading coronavirus. After nose-diving over 1,525 points during the day, the market ended 1,448.37 points, or 3.64%, lower at 38,297.29. Similarly, the broader NSE Nifty sank 431.55 points or 3.71% to end at 11,201.75.
Exports of certain APIs, formulations put under restricted category amid coronavirus outbreak
India on 3rd March restricted export of about 26 Active Pharmaceutical Ingredients (APIs) and formulations including antibiotics, vitamins, and hormones, with immediate effect, as the government explores measures to ensure there is no shortage of drugs in India due to the lockdown in China’s Hubei province, the epicenter of the coronavirus outbreak and also a major source of raw material or APIs. According to the notification dated 3rd March, the Directorate General of Foreign Trade (DGFT) restricted the export of APIs and formulations like Paracetamol, Tinidazole, Metronidazole, Vitamins B1, B6 and B12, the hormone progesterone, formulations made of Chloramphenicol, and formulations made of Ornidazole, among others.
Pharma body seeks relaxation on API exports for committed drug orders
Following export curbs on 26 drugs and active pharmaceutical ingredients (APIs) used in formulations, the Pharmaceuticals Export Promotion Council of India (Pharmexcil) under the Commerce Ministry has sought amendments to the export policy, thus allowing free export of drugs manufactured before 3rd March 2020, and for goods lying at ports. Most of these drugs such as vitamins and hormones have limited shelf life of 18-24 months and if the restrictions prolong, buyers will not accept the product and the same formulations cannot be utilized for domestic consumption.
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