Now, the Confederation of Indian Industry
(CII) has asked the finance and external affairs ministries to take urgent steps to battle the crisis. Among other things, it has argued that import duties on Chinese goods which were raised earlier should be rolled back. The prices of such items are expected to shoot up.
“The longer Chinese factories remain shut, the more we are seeing a global scramble by every country to source crucial goods from alternative sources. In the meantime, it would be doubly expensive for Indian consumers to import those items, given the current high duties in place,” a senior CII functionary said.
Industry also wants micro, small and medium enterprises to get a one-time three-month-long emergency waiver from the NPA regulations, so that risk of default on loan obligations reduce at a time when supply chains are crippled. This will also benefit exporters to China which are suffering from heavy revenue loss.
Expanding credit to manufacturing units with quicker loan sanctions is also suggested. According to industry bodies, sourcing from other countries where prices of inputs and final goods are higher will elevate costs for manufacturers in India. Similarly, capital will also be required for setting up domestic manufacturing to compensate for the China gap.
Officials said the domestic industry has demanded that the government force shipping liners — currently refusing to dock in China — to do so through incentives and other means.
For pharmaceuticals, imports
of which may be choked by the end of the month, companies have asked the government to take active measures by procuring key starting materials, APIs, and intermediate or basic chemicals, and fast-tracking approval processes with coordination between various ministries.
Though Indian players have technical capabilities, they have been more focused on value-added products or formulations and face a cost disadvantage with China.
In the solar equipment sector, CII has said 2-4 gigawatts of upcoming projects are likely to be affected because of reduced supplies from China. India's solar power project award took a back seat in the current year because of the imposition of safeguard duty on imported solar panels last year. With uncertainty looming, project developers stalled the purchase of solar panels, hurting the domestic industry even more. Because of the slowdown in imports, the targeted tendering capacity is likely to be missed this year.