Goa retailers of Chinese goods will find it difficult to get supplies from China if the Coronoa Virus stays beyond July this year. In fact, many of the retailers have the stock which they had procured much before the outbreak of this virus in December last year but the worry will start emerging from October this year if this trend continues. Yes, apart from health this virus has affected business too.
Drug and pharmaceutical companies in India heavily depend on China’s Active Pharmaceutical Ingredient (API). These include manufacturing units in Goa too which manufacture about 11 per cent of total production in the India. Normally two-three month inventory is being kept by any drug manufacturer.
The president of Goa Pharmaceutical Manufacturing Association (GPMA), Praveen Khullar said, “The China import of API which is taking place in India but because of the supply restriction, it may have an adverse impact on the formulation availability. We have a buffer of about three months and the impact will surface if the supplies are not restored. Also, the Union government in a smart move is also now providing fast track licenses so that APIs can be produced in India itself under Make in India.”
CMM Arena Retail Pvt Ltd, general manager, Hari Kaul who is a also the chairman of the Retail Trade Committee of the Goa Chambers of Commerce and Industry said that CMM Arena does import some furniture from China but since their planning was on time they got their supplies early.
“We had recently got the two containers of furniture from China which was one of the last containers arriving before the import was closed down. Now we have enough inventory of furniture and there should not be any shortage till October this year. However, we can expect the price of components which was earlier sourced from China to go up from 5-10% since April. Also, the China International Furniture Fair which was scheduled from March 18-20 has been cancelled which means none of the purchasers from all over the world will be able to strike a deal for their next supply,” said Kaul.
Kaul added that the focus will now be either on Malaysia Fair which will now be held in the end of June or on Chennai Fair which will be held in September this year. Also, in India some of the small manufacturers of various components are scaling up their production in a bid to fill-in the shortfall from China but the price will surely escalate and it will be very difficult for them to match on the price what China presently supplies to India.
Proprietor of Solar Enterprises which deals in white goods, Rohit Mehta said, “We do import some components from China and we got our supplies well before December last year. However, we have enough stock of those components. We are expecting price rise and the components may run short if the supplies are held up in the supply chain. Now the imports from China have been stopped as no one is willing to take the risk. I can predict safely that there will be shortage in months ahead if import from China is not restored.”
However, Goa’s largest retailer in mobile phones and computers Jamsons Enterprises does not see any problem with this Corona virus effect on its business. Jamsons has nine mobile retails shops and six computers retail shops in Goa. The proprietor of Jamsons Enterprises, Muzaffar Kadri said, “We are not affected by restriction of Chinese goods as our products are manufactured in India now and we get our supplies from Indian manufacturers.”
This Holi, the Corona virus had become the reason which kept away people from Chinese goods including not only the consumers but even traders across country, who are not turning up for Holi and other purchases resulting into importers of Chinese goods in a fix who have a piled up inventory of Chinese goods imported even before the virus was detected.
“As per an estimate Holi related Chinese goods worth about 500 crore of rupees are lying with importers of Delhi, Mumbai, Bangalore and Chennai whereas as per an estimate Chinese goods worth about Rs. 3000 crore are lying in supply chain across country,” Praveen Khandelwal, Secretary General of Confederation of All India Traders (CAIT), said.
The CAIT regretted that much hype has been created in the County on Corona virus which has generated an unnecessary panic across the country which has badly impacted Indian market as slowly the consumers are refraining in visiting markets resulting in loss of business. Appliance industry will get a major hit as most of the appliances and their components are manufactured cheap in China for exports.
B C Bhartia, national president and Praveen Khandelwal, secretary general of Confederation of All India Traders (CAIT) said that the impact of coronavirus is quite visible on other products also which have been imported from China. Taking a safe passage, the consumers are totally staying away from Chinese goods having a fear that the goods might be infected from the virus. Even the retail traders are least interested in procuring Chinese goods due to shift in consumer behaviour. Though the goods are not necessarily affected by virus, the market at large is keeping a distance with Chinese goods so also the consumers.
CAIT officials further added that as a normal business practice, the importers keep a buffer stock from 45 days to 60 days with them and in proportion to that procure Chinese goods shipments at regular intervals. The Corona virus broke in late December 2019 and came into limelight in first week of January when China locked down its industries and about 18 cities were completely closed bringing a complete lockdown in production of goods.
India is a prime importer of Chinese goods which plays a significant role in maintaining supply chain in India. So far the buffer stock of 45-60 days has kept the supply chain uninterrupted. However, such buffer stock is now going to be finished and thereafter the supply chain may get affected.
