India, the world’s second most populous country, ranked fifth in the global economy last year and has significant weight in several industries. Unexpectedly, this time the Indian variant of the virus has a huge impact on the world as well! The country’s epidemic is rampant, many regions have successively implemented various restrictions, along with major industries are also in crisis, as the market believes that the epidemic has not seen the top, meaning that the global industrial ecology is likely to usher in a “major reshuffle”!
Pharmaceuticals] Fear of hindering 62% of the world’s vaccine supply
India has always been known as the “world’s pharmaceutical factory”, with more than 3,000 pharmaceutical companies, more than 10,000 pharmaceutical factories, but also the world’s largest supplier of generic drugs (that is, drugs that can be produced after the protection period of patented drugs), accounting for 20% of the world’s supply, but also to meet 62% of the global demand for vaccines. Before the epidemic, India’s pharmaceutical industry had an annual trade surplus of more than US$11 billion (about HK$85.8 billion) and occupied a key position in the global API (also known as active pharmaceutical ingredients, which are processed into drugs for direct use afterwards) industry chain.
CITIC Securities pointed out earlier that the new crown pneumonia (CCP virus) epidemic continues to be prevalent in India, which could disrupt the global drug supply chain and exacerbate supply shortages.
Pesticides] Agrochemicals output value reached 31.2 billion
India is the world’s fourth largest pesticide producer and sixth largest pesticide exporter, before the epidemic local agricultural chemical output value of about 4 billion U.S. dollars (about 31.2 billion Hong Kong dollars). India’s production capacity accounted for a higher proportion of the original drug, mainly including daidzein (fungicide), pyrethroids (insecticide), carbamates, etc., of which daidzein accounted for 70% of production capacity, and its global market sales of about 800 million U.S. dollars (about 6.2 billion Hong Kong dollars).
The continued spread of the epidemic has led to local pesticide production restrictions, and affect the layout of the global pesticide supply chain.
Food] Production efficiency is low to support exports
India is the world’s second largest agricultural country after China, with 58% of the country’s population engaged in agriculture, and agriculture contributes about 15% of the gross domestic product (GDP). The country is also a major rice exporter, accounting for 27.1% of global rice exports. In other words, the country has an influence on food security issues.
The Newcastle pneumonia epidemic is now out of control, and a large number of farmers and agricultural processing plants in India have been forced to shut down. As the local agricultural production technology is backward, low production efficiency, harvesting all rely on farmers’ manpower, the degree of mechanization is not enough to support demand, farmers disguised hand stop mouth stop, the country is facing a food crisis, not to mention exports.
[Cotton] planted area or down 2% add inflation
When the global debate on the occasion of Xinjiang cotton, India’s disaster situation, such as clothing and footwear prices rise, adding to the suffering of inflation! India as the world’s largest cotton producer, the 2020 production accounted for about 24% of the world. According to the U.S. Department of Agriculture report, India’s cotton acreage next year or will decline by 2%. In the current situation, the epidemic led to labor shortage in India, as well as cotton farmers planting willingness to reduce, will affect the cotton sowing, production is expected to decline.
Sugar] Sugar cane arrears exceed 23.9 billion
India’s edible sugar production accounts for about 17% of the world, is the world’s second largest producer of white sugar after Brazil, white sugar production in 2020 reached 28.9 million tons.
Given the decline in production in major sugar-producing countries such as Brazil and Thailand, demand for Indian sugar exports has surged. However, there are currently more than 100 sugar mills in the region that have not been crushed, and the resurgence of the epidemic may lead to a slowdown in India’s sugar exports. In addition, as of February this year, the Indian sugar mills sugar cane arrears have exceeded 230 billion rupees (about 23.92 billion Hong Kong dollars), can be described as a disaster.
Textile and apparel] tired of exporting textile enterprises failed to deliver
India is one of the world’s largest cotton-producing countries mentioned above, but also the world’s largest jute and the second largest silk producer, its yarn production capacity accounted for 22% of the world, the textile industry accounted for about 15% of India’s total export revenue.
Since the second half of last year, the country’s epidemic has gradually heated up, a number of large export textile enterprises due to the epidemic can not guarantee normal delivery, European and American retailers will be a number of orders originally produced in India to China production to ensure supply. Transferred from India to China among the orders, towels, bed sheets and other products orders, as early as the end of last year, some manufacturers have revealed that the number of new orders received from India transfer will be scheduled to the second quarter of 2021. In the current situation, the situation is even worse.
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