Status check: Week after rules eased, industry mostly locked out

Lack of local clearances, shortage of workers and raw materials, piled up inventory and regulatory confusion are all contributing to Indian business still remaining largely locked down.

AP
Industrial activity is at beast limited a week after the Centre allowed some economic operations to resume.
Industrial activity is at best limited a week after the Centre allowed some economic operations to resume. Lack of local clearances, shortage of workers and raw materials, piled up inventory and regulatory confusion are all contributing to Indian business still remaining largely locked down.

ET spoke to businesses across sectors in major industrial centres for this story. Here’s a sector by-sector report card, and industry views on how to unlock production more effectively.

AUTO

Situation : Production hasn’t resumed due to shortage of supplies and labour. Vendors who supply to companies such as Maruti, Hyundai and M&M haven’t started work. Even after operations at auto companies resume, there will be an inventory pileup unless dealerships open.

Way Forward: States need to have uniform rules for auto and component makers across Chennai, Pune and Gurgaon-Manesar. Government help required for easing labour supply, particularly in Pune belt.

REAL ESTATE
Situation: Realty developers are waiting for green signal from states. Maharashtra has asked industry not to start work till further instructions. Telangana has extended the lockdown till May 7. Haryana may start work in green zones soon. Uttar Pradesh and Tamil Nadu have not greenlighted construction activity. And most pockets of key markets like Mumbai, Delhi, Thane and Pune are in red or containment zones.
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Way Forward: Realty needs local clearances as soon as possible as work can resume only for around 45 days till the onset of monsoon. Shortage of raw material is expected to be a big challenge. Government help needed to get labour back to sites.

ELECTRONICS
Situation: Foxconn and Wistron have suspended production.

They face shortage of imported parts such as PCBs, chips and displays. Production of medical electronics is also hampered by absence of critical imported spares. Plants of Samsung, LG, Vivo, Oppo, Realme, OnePlus, Godrej Appliances and Panasonic remain shut.

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Way Forward: Foxconn and Wistron need state and district administration clearances to open manufacturing in Tamil Nadu and Karnataka, respectively. Industry body CEAMA said some consumer electronics makers will wait till lockdown is over to resume production. This is also because there’s an inventory pileup.

INFORMATION TECHNOLOGY
Situation: Despite Centre allowing 50% staff to work from office, majority IT services employees are still working from home. Most companies are unsure about the ramifications of opening up office spaces.
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Staggered Opening
Way Forward: Industry body Nasscom has told TCS, Infosys and Wipro that they should look at staggered opening of campuses. But employers will need local permissions in some states as well as clarity on use of cabs for employee transport.

ECOMMERCE
Situation: Ecommerce majors Flipkart and Amazon are still only clocking around 10% of their average daily orders and even less overall sales compared with pre-Covid period. Continuing ban on ‘nonessentials’ has hit operations.

Way Forward: Companies say they can increase social distancing and are increasingly partnering with kirana and local stores in an attempt to get authorities to allow them to start delivering nonessential items. Globally, ecommerce is allowed to sell products across all categories.

FOOD PROCESSING
Situation: Better than most other industries. Production has resumed more substantively across sugar and rice mills, tea and other plantations. But labour availability is a problem. Many operations are running below 50% capacity due to labour shortage.

Way Forward: Food processing companies say many businesses will need government help in fixing the labour problem even after the lockdown is over.

TEXTILES
Situation: Only 15-20% spinning mills are currently operational across states, since only those units that have space to keep workers within premises have got clearances. Mills are running at around 20-30% capacity.

Way Forward: Sector says it needs domestic demand revival. But worries are that even if demand picks up, labour supply may prove to be a constraining factor.

(Sharmistha Mukherjee, Kailash Babar, Dia Rekhi, Ayan Pramanik, Writankar Mukherjee, Alnoor Peermohamed, Sutanuka Ghoshal, Prashant Krar, Jayashree Bhosale and PK Krishnakumar contributed for this story)
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