FOCUS INDIA

ONCE THE CURRENT CRISIS IS OVER, AUTO COMPANIES EXPECT SOPS TO MAKE PARTS IN INDIA. THE AIM IS TO DIVERSIFY SOURCING AWAY FROM A SINGLE DESTINATION LIKE CHINA

- SUMANT BANERJI

If one has to understand the chronology of the spread of the COVID-19 pandemic in India, one needs to just look at developments in the domestic automobile industry over the last two months. When reports of the first casualty came from China in mid-January, they were ignored. It was then just a local virus after all.

Things became serious when China's Wuhan province was quarantined and the World Health Organization (WHO) declared a public health emergency in late January. Then, the worry was more about the virus jeopardising the biennial Indian Auto Expo in early February. This year, there was a significant Chinese presence, but after contemplating a cancellation, the organisers took a chance, helped by the fact that no cases had been reported in India till then. While the gamble paid off, the first strain on business became evident as shipment of parts from China started getting impacted.

It has quickly gone downhill since then. With the virus gaining a firm foothold in the country, operations started getting impacted at the start of the month. The 21-day country lockdown that came into effect from March 25 was only the next logical step. Not only has the $120 billion industry, which accounts for 49 per cent of the country's manufacturing GDP, been brought to a grinding halt, the future is also very hazy. Battling a protracted near two-year slowdown in the domestic industry, the sector was hoping for a revival and sustainable growth from the second half of fiscal 2021. That is history now. In its latest report, research firm Crisil has said it does not foresee a recovery across the sector in FY2021.