Localised lockdowns may cause supply chain disruptions | Mint
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Business News/ News / India/  Localised lockdowns may cause supply chain disruptions
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Localised lockdowns may cause supply chain disruptions

India’s daily average covid-19 case count neared 1.5 lakh on Saturday, the most since the pandemic hit the country last year. Maharashtra, Chhattisgarh, Uttar Pradesh, Delhi, Karnataka, Kerala, Madhya Pradesh, Tamil Nadu, Gujarat and Rajasthan accounted for around 83% of the cases

India has seen a fresh surge in covid cases, posing a risk to its economic recovery. (Photo: PTI)Premium
India has seen a fresh surge in covid cases, posing a risk to its economic recovery. (Photo: PTI)

NEW DELHI: Localised lockdowns, restrictions, and night curfews imposed by some states to stem the recent spike in covid-19 cases could cause supply chain disruptions, according to an India Ratings and Research report.

“India Ratings and Research (Ind-Ra) believes that the recent spike in COVID-19 cases and associated lockdowns, though localised, could disrupt supply chains, foreign portfolio investments and domestic credit markets," the 7 April report said.

Mint reported on 7 April about hundreds of migrant workers fleeing Indian cities as new restrictions in some states to contain the pandemic have stoked fears that they will be left jobless again. Companies fear another mass exodus, like the one last year, will trigger a shortage of workers at factories and derail their revival. The shortage of workers may not only disrupt production schedules just as plants were nearing capacity but also push up labour costs.

“The renewed surge in cases has brought to fore the fear of localised lockdown, if not nationwide with varied restrictions. This could pose a moderate challenge to the supply chains of various sectors," the report said.

India’s daily average covid-19 case count neared 1.5 lakh on Saturday, the highest ever since the pandemic hit the country last year. Maharashtra, Chhattisgarh, Uttar Pradesh, Delhi, Karnataka, Kerala, Madhya Pradesh, Tamil Nadu, Gujarat and Rajasthan accounted for around 83% of the cases.

There are also concerns about vaccine shortage, with Maharashtra, Punjab and Andhra Pradesh having formally informed the Centre about depleting stocks. Chhattisgarh and Odisha have also said they were facing a shortage. The union government on its part has denied any scarcity of covid-19 vaccines and have assured of adequate supplies.

“The agency believes that the ecosystem of handling a partial lockdown has reasonably geared up in the last one year. Corporates have developed inventory management practices and accelerated automation in handling supply chain logistics amid a restricted environment. However, the cost of transportation is bound to further rise, which has already been facing challenges owing to high fuel costs. In this regard, anecdotal evidence suggests that corporates are now choosing supply chain providers based on their ability to adapt to changing circumstances rather than cost alone," the report said.

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Published: 10 Apr 2021, 02:28 PM IST
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