Commerce ministry to assess coronavirus impact on businesses

With a substantial increase in cost of production of drugs in India and shortage of life-saving medicines looming large, the commerce ministry is holding a meeting with manufacturers and exporters of medicines, textiles, electronic devices and electrical machinery among others to assess the impact of coronavirus outbreak and explore alternative sources to help businesses.

According to industry sources, the cost of production of medicines has increased upto 40% in the past fortnight but consumers are not feeling the heat due to price control of essential drugs by the government.

“The meeting chaired by Commerce Minister Piyush Goyal will discuss challenges and opportunities arising out of the coronavirus outbreak. The government will explore a sector-wise solution to industry problems. Import duty cuts are very much on the discussion table,” according to sources attending the Tuesday's meeting.

The government may reduce customs duty on pharma, electronic goods and other imports to help industry cope with the shortfall arising out of the crisis in China.

An estimated 68% raw materials for pharmaceutical were imported from China in in the financial year 2019. Around 40% of India's electronic equipment came from China last year and 80% of solar cells and modules which absorb sunlight to generate electricity were shipped from the neighbouring country.

India gets 14% of total imports from China. A slowdown in imports of inputs could have an impact on domestic production as India has a high dependency on China for manufacturing inputs.

The sectors that already have held discussions with Finance Minister Nirmala Sitharaman are information technology, textiles, pharmaceuticals, automobiles health, telecom, metals, mobiles, edible oil and marine food among others.

Among these, the sources said, chemicals, solar and pharma, have flagged potential price rise issues.

Meanwhile, India has been getting queries from the European Union and the United States for textiles, homeware, ceramic tiles, engineering goods, furniture among others, seeking to replace China as a supplier.