No need for panic for industry, trade: Assocham on coronavirus impact

Indian industry and trade, including pharmaceuticals, are ready to manage the "evolving" coronavirus situation without causing any major impact on the supply chain and no major challenge is foreseen in the near term, according to industry body Assocham.

Stating that there is no need for panic, Assocham Secretary General Deepak Sood said the Indian government and industry have been reacting in a pro-active manner in close coordination with each other.

"Yes, in a highly integrated economy, global supply chain is a reality but there are adequate cushions available to deal with temporary disruptions.

"Both the Indian government and the industry have been reacting in a pro-active manner, in close coordination with each other, to face any economic, technical or even contractual impact of the coronavirus on the world economy," he added.

He pointed out that so far, there has been no major disruption in supply chain on the Indian industry and no major challenge is foreseen in the near term.

Sood said while India imports substantial amount of APIs (active pharmaceutical ingredients) to the extent of 60-70 per cent from China, there are several domestic and global firms that have set up API units in India as well.

Depending upon the evolving situation, they may be encouraged to ramp up their production in India, he said.

He added that in the long run, it is both an opportunity and a wake-up call for boosting domestic production of essential generic drugs along with APIs for the Indian and global markets.

For other industries like electronics, there are no immediate threats but alternative supply sources like Taiwan can be explored, Assocham said.

"There has been an increased focus on domestic production of IT hardware and electronics and the initiative like 'Assemble in India' can be ramped up," Sood said adding that Assocham is in constant touch with its members and keeping a close watch on the situation.

The virus, which broke out in China in December, has infected nearly 77,000 globally and killed over 2,200 in China, according to reports.

"We should not get very negative on sporadic headlines reporting disruptions. Such events have to be tackled pragmatically," Sood said.

He lauded the government to have clarified that in such events, companies can invoke clauses such as 'force majeure' (clause in contracts that frees both parties from liability under circumstances beyond control of the parties) and protect themselves against any contractual lapses, if any.