Coronavirus: FM takes stock of trade issues, sees no impact on prices

The development comes in the wake of issues surrounding imports from and exports to China even as the Coronavirus outbreak grips that country

Finance Minister Nirmala Sitharaman on Tuesday took stock of the impact of the Coronavirus epidemic in China on trade and said prices were unlikely to rise. She added that her ministry would hold a meeting and discuss with the Prime Minister's Office (PMO) ways to formulate a response to disruption in exports and imports. Sitharaman said: "We need to ready our ports as the manufacturing sector is affected due to congestions and there might be a rush of raw materials from China when the situation improves in the coming months." 

"Tomorrow, each secretary in the Finance Ministry will collate the issues and contact others from different ministeries and with that collated issues we expect to hold a meeting at secretary level. We will talk about a on possible solution and discuss with PMO and announce a response," The finance minister said.

Describing pharma, chemical and solar equipment sectors as worst affected, the finance minister said disruptions are visible in these due to delay in shipment, "there are no concerns about price rise so far due to Coronavirus," she said, adding it is too early to talk about the impact of Covid-19 outbreak on the Make in India initiative. She also said there were no reports of shortage of medicines or medical equipment, instead the pharma industry is asking for lifting of ban on exports of certain items. 

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Earlier in the day, the finance minister interacted with leaders from various sectors of the economy on challenges and opportunities in the export-import supply chain. "The industries have raw material flowing from China and there is no shortage as per the interaction," Sitharaman said.

Business leaders have been demanding cuts in import duties on antibiotic drugs, mobile parts and other items as the outbreak of the coronavirus has disrupted supplies. The Covid-19 outbreak has hit India's manufacturing and exports of medicines, electronic, textile and chemicals as China is the biggest source of intermediate goods, worth $30 billion a year, Reuters had earlier said, quoting a Confederation of Indian Industry (CII) report. 

An employee works on a production line manufacturing protective suits at a medical supply factory in Xinzhou district of Wuhan. Reuters

The traders' body showed the presentation to Sitharaman during the day when she met over 200 business leaders to assess the impact of the virus and discuss plans to contain the damage. The government should "remove higher import duties on certain products, primarily imported from China" but available in other countries, the presentation by the CII said. "The government may offer credit with a backstop facility of guarantee for companies which have the capability to start immediate production of items that can feed into domestic consumption," it said.

The pharmaceutical industry, one of the worst affected in the weeks after the epidemic, is reeling under pressure as prices of drugs shoot up. Prices of several drugs including antibiotics have shot up by at least 15-50 per cent over the fear of supply issues. "The prices of some antibiotics, vitamins and other medicines have gone up by 15-50% following fear of disruption in the supply of ingredients," Reuters quoted Daara Patel, secretary-general of the Indian Drug Manufacturers Association as saying. 

An employee works on a production line manufacturing protective suits at a medical supply factory in Xinzhou district of Wuhan. Reuters

The pharmaceuticals industry is concerned that stocks of active ingredients for drugs like paracetamol, ibuprofen, could last for 15 days and for two-three months for other drugs, the presentation by the unnamed industry chamber showed.

The death toll in the outbreak surged past 1800 as China struggles to contain the situation in the worst affected Hubei and Wuhan provinces. The central Hubei province reported 93 deaths, while in the provincial capital of Wuhan, 72 people died. Across mainland China, there were 1,886 new confirmed infections on Monday, bringing the total so far to 72,436.