CovID Impact on SCM

1. AKESH KUMAR
(IBS PUNE)

2.  India has now restricted imports of chines colour televisions to encourage
domestic manufacturing.
 India has a Rs 15,000 crore TV industry and over 36% of that is imported
primarily from China and South East Asia.
 Chinese TV sets were routed through a third country with which India has a free
trade agreement (FTA).
 India’s production of electronics grew from $29 billion in 2014 to $70 billion in
2019. India is ready for a shift of manufacturing to India with cost-effective
imports of essential parts.
 India has taken a series of actions against China after the violent brawl
between Chinese and Indian soldiers.
India puts restrictions on colour TV imports

3.  A trade war happens when one country
retaliates against another by raising import
tariffs or placing other restrictions on the
other country's imports.
 Supply chains based on comparative
advantage a country’s ability to produce
certain goods and services more efficiently
and cheaply than its competitors remains
powerful.
 India gained about $755 million in
additional exports, mainly of chemicals,
metals and ore, to the US due to the trade
war.
US-China trade war

4.  India posted a trade surplus of $790 million.
India imports plunging as the coronavirus
pandemic depressed domestic demand for
crude oil, gold and other industrial products.
 There are particular issues with keeping food
supply chains flowing. The latter resulted in
large scale disruptions in supply chains and
demand resulting in cancellation of orders
Impact of the COVID-19 lockdown on Import and
Exports.

5. Bajaj Auto has a huge export market in Africa
 Bajaj auto has a huge export market in Africa, have more or less replaced the Chinese two
wheelers
 The number of Chinese companies present in the African market has come down from more than
200 a decade back to less than 40 now
 Chinese held 95-100% of the market a decade ago, now they share it almost equally with the
Indian manufacturers. Bajaj Auto is the No. 1 or 2 in more than a dozen African markets, with a
cumulative market share of 40% of the 2.4-2.7 million two-wheelers sold there.
 Bajaj has been able to compete and win in Africa based on its product strengths, local assembly
operations, quality assurance, network of distribution partners, dealers and service centres.
 With a long-term focus, a huge effort has been put in training tens of thousands of mechanics and
establishing customer engagement programmes, which is yielding results.

6.  India’s exports of two-wheelers grew 13.4% annually in value between 2008 and 2019, compared
with 6.4% for China’s companies, according to Kotak Institutional Equities.
 Africa is a growing market primarily due to the large population, increasing affluence and the
desire for personal mobility.
 For African customers Indian products are aspirational in terms of positioning pricing and quality.
 Africans have used Chinese products, but the word of mouth from riders about robustness of
Indian products coupled with very strong distributors on the ground with financial muscle is
making them win more customers.
 Bajaj has been able to compete and win in Africa based on its product strengths, local assembly
operations, quality assurance, network of distribution partners, dealers and service centres.

7. Impact of COVID and LAC standoff over imports of critical
components from China
•Covid-19 virus outbreak has disrupted supply chains, automakers and manufacturers of electronic goods in India are paying exorbitant rates
to fly down spares and components from China and South Korea on chartered flights.
•Makers of automobiles, consumer electronics, and pharmaceuticals in India, especially rely on China for supply of several raw materials and
parts like compressors, electronic components and various sensors.
•India’s trade dependence on China is huge. Being one of the leading trade partners of India, China’s share in India’s total export and import
are 9% and 18% respectively in 2019-20.
•The input-output table of India indicates that India tends to export raw material or ingredients to China’s manufacturing sector, and imports
more of final products with higher value-added

8. • The Indian auto industry is dependent on imports from China and also from
countries that depend on Chinese companies for raw materials and the COVID-19
outbreak is set to have an adverse impact on the sector.
• The border standoff, which saw 20 Indian soldiers killed, has triggered a wave of anti-China
sentiment in India with calls for a nationwide boycott of Chinese goods and renewed efforts to
promote domestic manufacturing alternatives in order to reduce India's supply chain
dependence on Beijing.
• The latest border dispute between China and India adds to greater uncertainty at a
critical moment in which Indian manufacturing activity and industrial production
has seen historic drops amid the COVID-19 crisis.

9. Despite pandemic, India set to record highest
sugar export in 10 years
 India became the largest producer of Sugar in the world surpassing Brazil which
earlier has always been the largest Sugar producer on consistent basis.
 About 15 lakh tons of sugar have been contracted for exports, which includes
contracts made with port based refiners by sugar mills. Major destinations for
sugar exports are Iran, Sri Lanka, Afghanistan, African countries.
 The country's top two producers Bajaj Hindusthan and Balrampur Chini have
together got a quota of more than 33,000 tonnes.
 India will end up producing 305 lakh tonnes of sugar for the next season. So, we
are hoping for a quota of 60-70 lakh tonnes for exports.

10.  Asia's Number 1 and World's Number 4 integrated sugar company It has an
aggregated sugarcane crushing capacity of 136,000 tonnes crushed per day (TCD),
The company is a leader in the Asian and Indian sugar industry and is also one of
the largest producer of green fuel ethanol in India.
 Bajaj hindusthan sugar ltd., has a total of 1,41,155 hectares of culturable land under
their command area. This area covers 1,344 villages and has over 95 centres. It
purchases cane from over 1,13,577 farmers. Assuming a family of 5 per household
the economy of over half a million households is dependent on Bajaj hindusthan
sugar ltd.

11. THANK YOU