India lockdown could have 'severe impact' on supply chains

30 March 2020

India’s lockdown to prevent the spread of the coronavirus puts machinery, pharmaceuticals and textile supply chains at risk, according to analysts. 

The 21-day lockdown, announced by prime minister Narendra Modi, is “likely to have a severe impact on manufacturing including downstream supply chains”, said S&P Global. 

Analysts said there are “already signs of disruptions to the logistics industry” with Indian ports declaring force majeure and cutting activities. 

According to data firm Panjiva, the largest Indian export lines in 2018 were energy, in particular refined fuels, worth $44.8bn (14.1% of total exports). Those shipments “will likely already be in decline ... as a result of the collapse in the oil price”, S&P said. 

The next largest exports were precious metals (12.4%), manufactured goods apparel and textiles (6.6%), machinery (6.4%) and vehicles (5.7%).

In terms of US imports, the most exposed industry is vehicle chassis, where 72.3% of imports came from India in 2019, data showed. Among consumer goods, India represented 32.1% of US imports of carpets and 16% of textiles.

The largest import to the US by value is pharmaceuticals. India represents 9.4% of total US pharma imports but supplies are concentrated in generic pharmaceuticals. 

“Data shows pharmaceutical imports to the US already dropped by 14.2% year over year in the first two weeks of March after falling 8.2% in the first two months of the year,” S&P added. 

“Shipments from India were substituted for those from Europe and China, with shipments from India having increased by 10.2% in the first two weeks of March and by 11.0% in the first two months of the year. Losing imports from India could therefore exacerbate the existing supply chain downturn.”

 Want to stay up to date with the news? Sign up to our daily bulletin.

LATEST
JOBS
Cambridge, Cambridgeshire
circa £55,000
Cambridge Assessment
London
GBP60000 - GBP80000 per annum + Benefits
Bramwith Consulting
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE