A parliamentary panel has expressed concern on the possible implication of the coronavirus outbreak on import of electronic goods in India, which is heavily reliant on China for our supply.
In its report, the standing committee on information technology headed by Shashi Tharoor has noted that India had reserves for just a few weeks and the ministry should quickly carry out a comprehensive evaluation and work on a contingency plan to mitigate any adverse effect.
The ministry of IT, asked if the manufacturing shutdown in China due to the coronavirus outbreak would affect availability of electronics goods, said the impact will depend on the severity and persistence of coronavirus. The ministry also said India is dependent on China for about 37% of its requirements, most of it goes into manufacture of sub-assemblies and final products.
“At present, it has been ascertained from the industry associations and major manufacturing companies that sufficient inventory is available for the next few weeks. Steps are being taken to explore sources of import of such components from other countries,” said the ministry.
The committee noted that India was too dependent on imports of electronic goods from China.
“Too much dependency on a single country for sourcing electronics goods is a cause for concern,” the committee noted.
Electronic goods imports into India from China stood at Rs 1,48,555 crore or 55% of India’s total hardware imports in 2015-16. This increased to Rs 2,06,086 crore in 2017-18 before coming down to Rs 1,59,165 crore in 2018-19.
The committee recommended that the government carry out a review of the short to medium term impact of the outbreak in China on the electronics hardware sector in India.
In the long-term, the committee advised the government to encourage industry to broad base sourcing of electronics hardware imports and promote indigenous production at the same time in order to reduce dependency on a single market/geographical region so that any unforeseen event such as the coronavirus outbreak in China do not cause any large-scale shortage of inventory in Indian market,” the committee noted.
