File photo:.Reuters
File photo:.Reuters

COVID-19: Electronics industry comes to a standstill in India after lockdowns

  • E-commerce services have been told to direct their resources towards essential deliveries, like groceries etc. They are not taking any inbound or outbound orders for electronics items.

NEW DELHI: The electronics industry has come to a grinding halt in India as states shut down all non-essential services to stem the growth of COVID-19 in the country. Retailers and distributors have stocks in warehouses but cannot sell them, while manufacturers had to shut shops in accordance with the lockdowns.

“Right now all stores are closed, so all the stocks we have are lying there. We have stocks for another 25-30 days from April 1 if the stores are allowed to open after that," said Manish Khatri, partner, Mahesh Telecom. He added that putting products online doesn’t make sense either, since “nobody knows what the situation will be in April".

While most manufacturing units in the country are shut till 31 March, the Uttar Pradesh government has asked factories to be shut till 25 March, to be reviewed on that date. On the other hand, e-commerce services have been told to direct their resources towards essential deliveries, like groceries etc. They are not taking any inbound or outbound orders for electronics items.

“Inventories are stuck not only in our warehouses, but also in transit, customs and imports, because flights are also shut now," said Rajesh Goenka, director, Sales and Marketing at RP Tech India. He said a lot of customers from IT and ITES companies bought laptops last week to provide employees devices to work from home but since then, consumer demand has also come to a standstill.

Goenka said the situation could spell real trouble for small businesses and retailers. He added that while the government has provided some relief to big businesses and below poverty line citizens, these retailers will also struggle to pay their employees if stores are shut for weeks on end.

Avneet Singh Marwah, CEO of Super Plastronics Private Limited estimated a total industry loss of Rs. 3000 crore in the long run due to the COVID-19 crisis. However, he agreed that “it’s better to cure this right now" than to continue operations. He said he looks at 2020 as a 11 month financial year now and will try and achieve his targets in that time.

However, Goenka and many others agreed that the impact on business will not be huge in the short term. Pankaj Mohindroo, chairman, Indian Cellular and Electronics Association (ICEA), said that “a closure for a few days will not impact business" due to high demand post the lockdowns. He said manufacturing would return to normal by 1 April, though not everyone in the industry seems to be sure.

The electronics industry has been dealing with tough times over the past two months. The outbreak of the virus originally led to mass shutdowns in China, which in turn led to supply shortages in the industry. “Now that China is coming back up, the rest of the world is shutting down," said Arjun Bajaj, Director of Videotex, a LED television manufacturer.

S.N. Rai, co-founder and director of Indian mobile company Lava International said the industry had finally been able to bring components from China to manufacture products here at high costs, but now they have had to shut down here. “For the last two months we have been surviving on the war chest, but I don’t think anybody has a war chest to survive for the long term," he said.

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