US-India Business Council President Nisha Biswal believes once the economic activity and demand resumes, India could hold the potential for diversification of supply chains and manufacturing.
While many analysts have raised a red flag on the economic impact of an extension of the 21-day lockdown in India due to the Covid-19 outbreak, an American business chamber said that businesses are “adapting” in ways they can to ensure the continuity of essential businesses.
The 21-day lockdown is set to end next week but several state leaders have called for an extension or only a partial lifting of restrictions, which they say is the only way to avoid a coronavirus epidemic that will be difficult to tackle.
US-India Business Council President Nisha Biswal, in an interview, told ANI that under the present circumstances, businesses are looking at boosting work-from-home capabilities and taking measures to allow safe operation of essential businesses and supply chains.
"We'll follow the decisions and guidance of government authorities on any extension of the social distancing measures in India. Judging by what is happening in the US, Europe, we anticipate and are prepared for these measures to be necessary for a while longer," Biswal told ANI.
She further added that a safe and sustainable availability of migrant labour to keep supplies flowing to the "at home" population will be important for a more enduring lockdown.
Biswal believes once the economic activity and demand resumes, India could hold the potential for diversification of supply chains and manufacturing.
"It's an opportunity for India to play a more robust role in the manufacturing of many different product lines in the near term," said Biswal.
Even as the immediate focus for the government is pandemic mitigation, Biswal said she was confident that India could be an attractive place for more production to be housed.
"Companies are increasingly thinking about diversifying their manufacturing and supply chain, not just to have it housed in one country but to think about more regional production," Biswal said.
The American Business chamber chief praised the steps taken by Prime Minister Narendra Modi. Biswal also added that the Government of India moved very quickly to announce the first round of economic measures that were geared towards supporting the most vulnerable, by expanding the social safety net and ensuring that people who are going without a paycheck are supported.
Going forward, the chamber has recommended a "second round" of measures to be put in place by the Government of India to support businesses.
"The second round of economic measures really should focus on what do businesses need to get through this time period. We suggested that the government should think about some strong stimulus measures that can really help keep Indian businesses afloat, through this time," Biswal added.
While lauding India's move on enforcing the 'Janata curfew", Biswal insisted that there is a need to look into the provision of providing some waivers to the BPO industry and services in India, which are providing crucial support to America's critical cell centres including hospitals, insurance and banking sectors. Also, in India, the service sector accounts for a huge per cent of India's GDP.
In order to maintain business continuity, India needs to help companies adapt their operations so that they're able to function better from work from home ecosystem, she said.
"We have a relationship in the US-India corridor between our two governments and between our two countries that we can have a more collaborative approach and maybe we can in that process also have that stronger example for the rest of the world as well,” Biswal further added.
The chamber has made it clear to all governments, including India, that they have got to create an open global trading system.
"Whether it's a drug, medical equipment or PPE. There are several components and ingredients that are coming from different places, there is a global supply chain and value chain. And if every country starts putting export controls and stops goods from moving out of their country or moving into their country, it is going to affect the ability to meet demand in every country," Biswal explained.
Biswal added: "We are seeing that happen if every country starts talking about trying to nationalise supply chains, products and inventory, I think it's going to become very difficult. And I think India has understood this."