Finance Minister assesses coronavirus impact, promises to help India Inc

Finance Minister Nirmala Sitharaman on Tuesday said the government will soon announce measures to deal with the impact of Coronavirus outbreak on the domestic industry.

Addressing media after meeting representatives of the industry to review the impact of coronavirus outbreak, Sitharaman said she would hold a meeting with the secretaires of different ministries tomorrow and then announce steps to deal with the situation in consultation with the Prime Minister's Office.

"There are no concerns about price rise so far due to coronavirus," she said, adding it is too early to talk about the impact of Covid-19 outbreak on the Make in India initiative.

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Sitharaman also said there were no reports of shortage of medicines or medical equipment, instead the pharma industry is asking for lifting of ban on exports of certain items.

However, there could be some disruptions in supplies and concerns have been expressed by the representative of pharma, solar and chemical industries, she added.

Indian drug manufacturers are to a large extent dependent on China for sourcing their drug ingredients or the active pharmaceutical ingredients. According to industry expert, the government should consider steps like waiver of import duties to manage supply from alternative sources.

"Even though the impact of the coronavirus on Indian economy has been limited so far, there is a risk that industries like pharma and electronics may be seriously impacted if the disruption in supply chains persists for long. It is important that the government take precautionary steps to look for alternative sources of supply. Steps like waiver of import duties may be considered since imports from alternative sources will be costlier," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

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As per data from the Pharmaceutical Export Promotion Council (Pharmexcil), the cost of active pharmaceutical ingredient (API) Penicillin has surged to Rs 639 per unit compared to Rs 454 per unit in January. Reports suggest that Indian suppliers of key drug ingredients have increased prices amid looming fear of shortage stoked by the coronavirus outbreak in China.

Keeping in view the country's over dependence on import of APIs, the central government has constituted a Task Force on APIs under the chairmanship of Minister of State for Shipping and Chemicals and Fertilizers Mansukh Mandaviya to formulate a road map for the enhanced production of generic drugs in India.

The fifth meeting of the Task Force was held on Monday in which pharma industry assured government that there are enough drugs and medicines to deal with any contingency arising out of impact of deadly virus. Some key issues that were discussed in the meeting include policy relaxations to small, medium and large API units and simplification of the process for environment clearance for production and availability of medicines.

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By Chitranjan Kumar with PTI inputs