Covid wave in China sends shock waves through Gujarat
Concerns over the possibility of shutdowns in China are once again haunting Gujarat’s industrialists
State’s pharmaceutical and chemicals manufacturers procure a huge chunk of raw materials from China. the latest covid outbreak in that country has badly hit the supply chain.
As China’s zero tolerance to Covid-19 compels businesses to prioritize virus containment over economic productivity, the industrial output in China was dealt a huge blow in the past few months.
Concerns over the possibility of shutdowns in China are once again haunting Gujarat’s industrialists, as they fear a decline in the demand and drying up of raw material supply chains.
While Gujarat’s pharmaceutical and chemical industries procure a huge chunk of raw materials from China, many tend to supply to China too.
According to estimates, the annual trade between Gujarat and China stood at $17 billion in the last fiscal. Certain sectors here are already witnessing the temporary impact of the latest Covid wave in China.
On the contrary, other sectors like ceramic and engineering goods are resilient to the impact. Pharma APIs get costlier by 15% Even though Gujarat-based pharma manufacturers are moving towards API manufacturing locally, the industry is dependent largely on China for APIs and key starting materials (KSMs).
With grey fabric prices crashing and fresh orders being put on halt, textile processing units are once again in a tizzy. Most of the textile processing houses resumed their operations almost three weeks after the Diwali holidays, due to the lack of demand.
