India readying multi-pronged action plan to contain Corona impact on economy

Looking to contain impact of Coronavirus epidemic on Indian economy, the Union Government is in the process of finalising a multi-pronged strategy after assessing the situation and involving the stakeholders in the deliberations. The strategy is expected at the earliest as the real impact on the ground will be visible starting from March.

India, which depends heavily on China for raw materials in key sectors like pharmaceuticals and auto, still feels confident of getting less harmed as the manufacturing companies are yet to report heavy stress and shortage of raw materials.

The efforts are on to put in place short-term and medium-term measures with a multi-pronged strategy involving exports and imports. On the import side, the country will look to minimize risks to key sectors and on the export side, it will look to alternate destinations.

Finance minister Nirmala Sitharaman held wide-ranging talks with government secretaries and senior executives of various companies to assess the impact of the epidemic. She will chair another meeting with the secretaries and the action plan would be finalised in consultation with the Prime Minister’s Office in the coming days, sources said.

“The manufacturing sector, which depends on raw materials from China, is worried that while some of them are receiving the stocks but because necessary paperwork is not coming from China, their stocks are being held at Indian ports,” Sitharaman said after meeting the industry representatives.

“It might be that in the next few months after the virus effect diminishes, there could be a rush of all the materials coming to our ports, which have been delayed in the last few months and therefore industry also wanted us to be alert to the fact that if today it is getting staggered, sooner there will be a time when all of it will come almost at the same time. Our ports should be in a position to handle that congestion,” Sitharaman said.

About 45% of total electronics imports in India come from China, according industry reports. China’s share in imports is more than 25% for automotive parts and fertilizers, while 60-70% of pharmaceuticals in India are also sourced from China. India imports goods worth more than $1 billion from China in pharma, fertilizers, medical devices, inorganic chemicals and textiles sectors.

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