Covid-19 impact: Opportunity to boost international supply chains, says India Inc

Mumbai: The outbreak of the novel coronavirus in China, the factory of the world, could be an opportunity to acquire new markets for Indian manufacturing besides a lesson in risk management, several industrialists said at an event here on Thursday.

“We have a sudden hidden bonus in the form of coronavirus, which has created a deep awareness within people across the world about exposure and risk that they will face for being solely dependent on China,” said Amit Kalyani, executive director of Bharat Forge.

“This is the time for India to analyse and work on where we are good at, and where we have the raw materials and resources needed to quickly capture at least 10%-40% of the opportunity arising now,” he said at the annual meeting of Confederation of Indian Industry (CII).


R Mukundan, managing director of Tata Chemicals, said companies should analyse their international competitors’ supply chains and see what new places could be occupied. “This is a once in a lifetime opportunity,” he said.

One of the things that have been highlighted in the past few weeks was the over-dependence of Indian manufacturing on China. India imported about $90 billion, or approx. Rs 6.6 lakh crore, worth of good from China in 2018 alone, according to World Bank data.

Jamshyd Godrej, managing director of Godrej and Boyce, said companies need to make more in India. “There are so many components that are imported from China only because they have the scale and thus cost advantage,” he said.

The crisis following the Covid-19 outbreak is also a lesson for Indian companies in assessing risks to their business, some entrepreneurs said.

“Risk management in a business has to be done on a more comprehensive basis, and look at not just monetary risks,” said Vikram Kirloskar, vice chairman at Toyota Kirloskar Motors and president of CII.

He recounted how global manufacturing was impacted in the past due to the concentration of manufacturing of certain components in one place, like when a tsunami hit Japan in 2011. Kirloskar said many factories have started resuming operations in China and the disruption should get over soon.