The spread of coronavirus is likely to increase the prices of goods in India as China is a key exporter of several raw materials, spare parts etc. "The over-dependence on China for finished products, spare parts and raw material will cripple the trade and small industries in India... The scarcity of goods may also result into inflation in prices," BC Bhatia, National President and Praveen Khandelwal, Secretary-General of the Confederation of All India Traders (CAIT), said in a statement on Monday. The trade body has now sought a meeting with Union Commerce Minister Piyush Goyal to assess the impact of coronavirus.
Why China is crucial to Indian trade
In India, products from China come under three categories. While China sends finished goods which are later sold in India, it also exports raw material which is then used for producing goods. China also exports spare parts to India and the same are used in assembling the goods by traders and small industries. Items such as toys, footwear, clothing fabric, furnishing fabric, consumable goods, FMCG products, electrical items, medical and surgical equipments, surgical goods, pharmaceuticals etc are also imported in India via China.
"Since coronavirus broke out in January, the trade and industry in China is closed and there is no manufacturing or supply of goods," BC Bhatia and Praveen Khandelwal said in a statement. The importers have also cancelled their visits to China while cutting down imports. Also, as these importers keep a buffer stock of two months only, the supplies are drying up. Further, even if China begins production now, it will take months for these supplies to become regular, they added.
Meanwhile, the death toll crosses 1770 in China. The virus originated in the Wuhan city of Hubei province of China. Three cases in India have also been reported so far.