Experts discuss the coronavirus crisis in India. We spoke to Rajesh Nath, Managing Director, VDMA India (Mechanical Engineering Industry Association)
The coronavirus lockdown in India has been extended until May 3, 2020. In common with other countries in the world, the government has taken that decision in order to slow down the further spread of the virus. While the strategy is almost certainly the right one, India faces a lot of issues in terms of the comprehensive availability of health care and COVID-19 tests especially. Outside metropolitan areas, infrastructure is poor and the even basic health support can be difficult to find. On the other hand, extremely densely populated areas in India’s mega cities, mostly inhabited by poorer people, can see the pandemic situation escalate. With the imposition of virus-related provisions and restrictions, the economy of the world’s largest democracy slowed down heavily and led to countless employee dismissals nationwide, especially in the informal segments, which currently account for nearly 90% of the entire economy.
We spoke with Rajesh Nath about the overall and personal situation and about his estimation of the situation in India.
PETplanet Insider: Dear Rajesh. It is really kind of you to take the time to talk to us about what is happening in your country during these very challenging times. We have known each other for more than 10 years and worked on many joint projects together in and around India. Now we find ourselves in the middle of the COVID-19 crisis. We are due to be back in Mumbai as a partner of the Drink Technology India (DTI) exhibition in December, depending, of course, on how the virus develops. So far, India has received little in the way of press coverage here in Europe. However, as a regular visitor to India, I am familiar with the often-unhealthy living and sanitation conditions experienced by the lower social classes, e.g. in densely populated big-city slums and in poorly educated rural communities.
As Managing Director of the VDMA in India, you are essentially the link between Europe and India for the mechanical engineering industry with its over 3,300 associated members. We would therefore really like to hear your views on what the situation is currently like on the ground. Is the Indian healthcare system prepared for a possible pandemic and to what extent would companies who count on daily wages and poorly educated people be affected if workers were absent due to illness?
Rajesh Nath: The system is completely unprepared for a pandemic. There could be problems, especially in rural areas or where there is a rapid increase in the number of people contracting the virus. The current lockdown is affecting this group of people particularly badly. They are not working at present and have left their jobs during the lockdown in order to be with their families.
PETplanet Insider: What are the economic and health risks posed by the virus for India and how best can they be addressed?
Rajesh Nath: India is one of the most populous countries in the world which means that, in health terms, it is almost inevitable that the virus will spread. The country’s population is relatively young which could buck the trend. However, general healthcare provision is inadequate across India and the number of people with pre-existing conditions may be a sign of increased mortality rates due to the virus. The trouble is that even the experts are divided on this. The main danger to the economy is a rise in the number of unemployed in a country that is not particularly affluent. It is also unclear when life in India will return to normal.
PETplanet Insider: To what extent could coronavirus affect industrial relations with India, particularly between Europe and India?
Rajesh Nath: Border closures, production shutdowns and lockdowns will all have an impact on both supply and demand. However, the Indian economy has an advantage given its relative isolation and the fact that it is not so deeply embedded within global supply chains with limited exports going to world markets.
PETplanet Insider: What steps can the Government take to ensure the survival of small companies in India, particularly the PET packaging industry such as converters and bottlers?
Rajesh Nath: India is putting together an economic stimulus package worth US$ 19.6 billion to address the impacts of the economic downturn which is expected to be agreed by the end of March.
The Reserve Bank of India is also following the example of other global central banks by announcing a cut in interest rates in order to provide liquidity to the markets. These measures will certainly help the PET consumer industry.
PETplanet Insider: Could there really be a shortage of PET for packaged drinks and food if supply chains were interrupted?
Rajesh Nath: We have heard nothing so far which would suggest that. However, it can be assumed that there will be a strong demand for these items as people who are staying indoors to follow lockdown and quarantine regulations are increasingly consuming food packaged in PET.
PETplanet Insider: The Indian market is renowned for its ingenuity. What good could or will come out of this global crisis? For example, we are seeing a stronger shift in many countries to online transactions during and after lockdowns. During the demonetisation of the Indian currency at the end of 2016, there was hardly any cash available at times, with huge numbers of people queueing outside banks. As a result, many large and small shops were quickly able to pay digitally using the Paytm money transfer app, a kind of PayPal for the local market which, in the end, made cash virtually irrelevant. In fact, apps for various services are in use everywhere.
Rajesh Nath: That’s right. India, particularly in the large conurbations, is an excellent example of how everyday life can be made easier with the use of apps. For example, you can now do your shopping, order a taxi or groceries by simply using your mobile. It does not really matter if you are in a supermarket or at a street food stand. However, the coronavirus will inevitably result in an increased shift towards online outlets. In the B2C sector, this will mainly involve restaurant orders, food deliveries from supermarkets and traditional online trading. The coronavirus can, of course, offer opportunities by enhancing our ability to quickly assess problems and come up with effective solutions. The Indian Government has an additional interest in supporting the economy’s resourcefulness. Labs are being established and invitations for tenders issued, with smaller bars, hotels and restaurants now switching to supplying services on the ground, e.g. from meals to alcoholic drinks, as a result of the lockdown. The ability to react quickly to events is certainly there. Where all this will lead, however, remains to be seen.
PETplanet Insider: How can and will the VDMA support its members in India?
Rajesh Nath: We offer support by providing them with the latest news on political developments and individual business sectors, both from India and Germany. Furthermore, the VDMA, as it has done previously but particularly so now, offers special added value for its members through its close networking activities with political decision-makers and in individual sectors. It is important, especially during such times of separation and isolation, to have a central point of contact acting as a conduit for providing members with a flow of valuable information despite current working difficulties.
PETplanet Insider: How much longer do you think the coronavirus will preoccupy India and the rest of the world?
Rajesh Nath: This is a question which has been occupying the thoughts of experts all around the world. However, I think it is unhelpful to put any timescale on when the crisis might end. Current thinking would suggest at least six months.
PETplanet Insider: Looking ahead to the DTI event in Mumbai, what real impact or opportunities do you see coming out of the exhibition or from other trade fairs and conferences where the industry will be represented?
Rajesh Nath: We are assuming that all the events will take place as usual. Business difficulties often result in new ways of thinking coming to the fore. The very fact that people and companies are having to limit their activities worldwide enables innovative solutions to pressing issues of the day to be discussed at trade fairs. The DTI exhibition will also offer opportunities for attendees to meet experts from their own industries after lengthy periods of working restrictions.
PETplanet Insider: Finally, I would like to ask what personal protection measures you and your family are taking and how real your everyday life is. What is the mood among friends, from the economy – what positive developments are you seeing?
Rajesh Nath: Everyday life here is similar to that in other countries. People only leave their homes to go shopping, or alternatively, you can have food delivered to your home. However, you have to get used to lengthy delivery times which are typically 4-5 days. VDMA India staff are currently home-working, with issues that normally require face-to-face meetings being discussed using video-conferencing. Support is being provided within local communities and food shared during the crisis.
PETplanet Insider: Thank you very much for talking to us and sharing your thoughts, Rajesh. We wish you and your family continued good health and wellbeing during these difficult times!