India’s pharmaceutical industry hit hard by epidemic

More than half of the local governments in India have implemented the “city closure” order, and many pillar industries of India’s manufacturing industry have suffered a serious impact. Among them, the operating rate of pharmaceutical middlemen and API enterprises is only about 30%. Both China and India are major suppliers of APIs, and there is the possibility of order transfer. At present, China’s API supply accounts for 9% of the world’s total and India’s 12%.

The API produced in India, known as the “world pharmaceutical factory”, is an important link in the whole pharmaceutical industry chain closely linked with upstream and downstream. However, according to Indian media reports, India’s import dependence on Chinese APIs has a great impact on its entire pharmaceutical industry. Before the nationwide blockade in March last year, India imported about 53 different kinds of APIs and key starting materials from China“ One of the significant impacts of this dependence is the more severe price fluctuations. “The price of raw materials exported to China has increased by 50% to 200% due to the rise in China’s labor costs and the impact of COVID-19,”.

India’s economy has shown an accelerated pace of recession in this earlier year, but the second wave of new crowding is seriously bruising India’s economic recovery. India’s GDP grew by 1.6% in the first quarter of this year, compared with 0.5% in the first quarter of last year, according to official data released on the same day. In the fiscal year to March, India’s economy as a whole shrank by 7.3%.

Last year, affected by the first wave of COVID-19, India’s economy saw its first recession in nearly 25 years. Subsequently, India implemented the measures to unseal, and its economy began to recover. After the second wave of COVID-19 attacks this year, the local government of several important manufacturing bases in India announced the launch of a local blockade, which will certainly impact India’s economy. Meanwhile, the unemployment rate in India is also increasing. The unemployment rate in May has soared to over 10%, even exceeding the level of the last year’s outbreak.

The OECD this week lowered India’s economic growth forecast for this fiscal year to 9.9%. The OECD pointed out that although this figure is the highest among the group of twenty, the momentum of India’s economic growth is the farthest away from the new crown. It is predicted that India’s economy will slow down sharply in the second quarter of this year.