Coronavirus And Its Effect On The Indian Healthcare Economy
COVID-19, also known as coronavirus has claimed nearly 3000 lives worldwide as per statistics updated on Feb 28th 2020. News reports are still pouring in everyday with a new country being added to the list where the virus outbroke claiming another patient, a new number amidst the approximate 83, 733 cases around the world.
The effect of COVID-19 is a double-edged sword. On one hand, there are human casualties, while on the other hand, there are consequences on the economy, especially healthcare. Talking about the Indian healthcare economy, it can be said that the industry has kept its foot firmly on the accelerator in a bid to meet with the rising market demand of personal protection equipment. At first, the Indian government banned the export of all personal protection equipment in accordance with its plan to supply the growing demand of the same in the domestic market. However, the government then fine-tuned this verdict which allowed the export of surgical masks and gloves, with the exception of synthetic rubber products.
How did this happen? The tweaking of the verdict happened after the Directorate General of Foreign Trade (DGFT) understood that the Harmonised System (HS) Codes which was under the export prohibition order comprised of numerous products which can be used for general and non-medical purposes.
Domestically, the Indian manufacturers faced what is being termed by experts as “binge fear buying” where people are crowding shops to get their hands on N95 masks or simple surgical masks to protect themselves from the virus. Medical shop owners have gone on record to state that they sold nearly 10,000 masks in a week while exhausting stocks of N95 masks.
The demand reached peak level domestically, couple that with the loosening of the export regulations, it was feared that there might be a dearth of protection equipment for the internal market.
This fear was justified with reason.
In the international market, the wholesale rate of face masks had taken an upward price curve of about $8-10. This rise made catering to the international market a more worthwhile prospect for the Indian manufacturers. Pertaining to the price rise, news reports state that domestically, a normal face mask which was being sold at Rs. 5 was being sold in Rs. 10 whereas the rate of N95 masks grew from Rs. 100 to Rs. 150.
Indian manufacturers have increased the production of masks exponentially which has resulted in economic experts estimating the market size (domestic and international) of personal protection equipment at nearly $1 billion. India exported around $966.54 million worth of products between April-December 2019-20.
However, the flipside of the story was imports. There are many significant industries in India which depend on Chinese imports. They took a hit when the production stopped in China due to the outbreak of coronavirus. Reports say that industries such as electrical and telecom machinery, nuclear reactors, plastics and organic chemicals have taken a hit as these industries comprise of India’s top imports in FY 2019.
It is believed that, although the imports from China have been adversely affected due to coronavirus, this situation can lead to the upliftment of the “Make In India” project where India can walk towards attaining self-sufficiency in terms of manufacturing.
