The protests in China against the restrictions under its Zero-Covid policy could impact India’s consumer goods including gold, electronics, and engineering goods. The fall in demand due to the lockdown as well as disruption in the supply of inputs from China may impact several sectors, a report in the Economic Times (ET) said.
In October, India’s engineering exports to China fell 64 per cent. There has also been a fall in demand for cut and polished diamonds as well as gold.
There is also a slowdown in the supply of components from China. India’s industry representatives told ET that the situation is manageable as the supply has fallen post the festive season, and it could get worse if supply constraints continue.
China has been under strict lockdowns under its Zero-Covid policy. Yet, Covid cases have reached unprecedented heights in the country. On November 29, it recorded over 71,000 cases. There have also been widespread protests in the country against the lockdowns.
“The agitation in China is going to impact demand in the Far Eastern countries. It has slowed down a bit but if the agitation continues for long then the January-March quarter of FY23 will not be very bright for the country’s gem and jewellery exports,” Vipul Shah, chairman of Gem & Jewellery Export Promotion Council, told ET.
China is India’s second-biggest importer of diamonds followed by the US. Out of India’s total diamond exports, China and countries from the Far East account for 30 per cent.
Due to the upcoming long holiday in China due to the Chinese New Year, the shipments are expected to stay slow.
“China will go into a long holiday after January’s first week due to the Chinese New Year and hence this is when we import the components. There is no problem in the Shenzhen factories, but work has slowed down in the ports,” Avneet Singh Marwah, chief executive of SPPL told ET. Business Standard