With China Being Hit By Virus, India Should Look At Positioning Itself As Alternative Supply Source: Ficci
The meeting came a day after FM said the government would soon deal with the impact of the virus domestic industry.
With many industrial sectors, including pharmaceuticals, staring at a shortage of raw materials due to the coronavirus epidemic in China, industry body Federation of Indian Chambers of Commerce and Industry on Thursday pitched to incentivise local manufacturers to exhort them towards making investments and tackle supply disruptions.
"There should be incentives and other opportunities to fast track investments in India and position India as an alternative source," Secretary-General of the Federation of Indian Chambers of Commerce and Industry Dilip Chenoy said.
He welcomed the "very responsive" approach of the finance ministry and the National Institution for Transforming India Aayog to handle the situation. Both the finance ministry and the NITI Aayog were "very responsive and the idea of doing sectoral approach to this (problem) and setting up of an inter-ministerial coordination system to address was also appreciable", he told PTI on the sidelines of an event here.
Noting that there were two or three major types of problems, Chenoy said certain companies in India were dependent on raw materials from China and inputs, and they had varying degrees of stocks available with them. "Therefore, the idea is to find out if there is any way to ensure quicker availability of products and components that have been dispatched from China and were en route India by shortening the quarantine time or doing some treatment to reduce the quarantine time so that these are available to the companies here," he said.
Chenoy noted that as different companies in China are coming on stream on different points of time, there was a need to look at developing either some fast-track air cargo or other means to get those products out to India and when these reach India, there is a need to do quick customs clearance. Asked to suggest some short as well as long-term remedy, he said products that can be procured from other parts of the world should be identified.
"Besides, there should be incentives and other opportunities to fast track investments in India and position India as an alternative source," he said. In matters like supply of solar equipment or power plant or some other capital goods projects where items are being imported from China and being delayed, he said banks and financial institutions could play a significant role by extending credit and not declaring them as non-performing assets.
He also referred to apprehensions of export firms that their financial calculations might go awry in the wake of the coronavirus problem, which was not foreseen. Chenoy said there were certain challenges in the electric vehicle and vehicle sectors which were hoping that some alternative sources would be found.
Government think tank NITI Aayog along with top executives of the pharma industry and senior officials on Wednesday discussed ways to boost domestic manufacturing of active pharmaceutical ingredients, amid concerns over supply disruption from China due to the coronavirus outbreak.
The meeting, chaired by NITI Aayog Chief Executive Officer Amitabh Kant, came a day after Finance Minister Nirmala Sitharaman said the government would soon announce measures to deal with the impact of the coronavirus outbreak on the domestic industry.
China, which is battling the coronavirus epidemic, is a major supplier of bulk drugs and drug intermediaries to the Indian market. There are concerns about supply disruptions and a possible rise in medicine prices. China accounted for 67.56 percent of total imports of bulk drugs and drug intermediates at $2,405.42 million to India in 2018-19.
According to an official statement issued on Wednesday after the meeting, Kant exhorted the industry to become internationally competitive and go for a global scale of operations.