India’s COVID crises threaten the global supply chains

India’s COVID crises threaten the global supply chains

May 11, 2021 0

In recent days, India has seen a devastating surge in the COVID crisis. Hundreds of thousands of new cases are reported every day, and economists are rethinking their forecasts for double-digit growth this year. This is especially a problem for India that was plunged into recession last year for the first time in nearly a quarter of a century after the government imposed a nationwide lockdown.

Supply Chains

An approximate 80% volume of the world’s goods traded is carried on ships and India provides a majority of the crew. More than 200,000 of an estimated 1.7 million seafarers globally are from India – the crew holds important roles and skills, which can negatively impact global supply chains.

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Vaccine and pharmaceutical supply:

India is the world’s largest supplier of generic drugs. In the United States, 90% of all prescription drugs are generic drugs, and one in every three pills consumed is produced by an Indian generics manufacturer. The Indian drug makers, however, get almost 70% of their raw materials from China, a link in the supply chain that can have a harsh impact given the coronavirus surge.

At the end of last month, China’s Sichuan Airlines suspended cargo flights to India for 15 days. This had prompted India’s top pharmaceutical export group to call on India’s ambassador in Beijing, urging him to intervene.

Textile:

India is the largest clothing manufacturer in the world has faced severe labour shortages in recent weeks due to the surge in COVID cases.

Delhi and Bangalore, which are considered garment production hubs have seen a high number of Covid-19 infections. Over half of workers have not been inside factories. For many manufacturers who are still recovering from last year’s downturn, the safety of workers has become a huge concern. Domestic clothing industry consumption and exports last year fell by 30% and 24%

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