COVID-19 pandemic might have wrecked the global economy but on a positive side it has unlocked new opportunities in exports for Indian businesses, creating growth and new markets in multiple product categories, Drip Capital, a trade finance company which provides working capital for such businesses said in a report.
As per this report items like Personal Protective Equipment (PPE), sanitizers, disinfectants, and test kits have seen significant growth in value and depending on the trajectory of the pandemic in key export markets, these products may continue to contribute to export growth in the coming years as well, it said.
During the January to July period India reported a total export revenue of an estimated $532 million from a total of 14 medical- related products.
“The largest component of the $ 150 million in growth comes from the textile sector, specifically a class of impregnated and coated fabrics used in the PPE equipment for medical professionals, as well as masks,” the report said.
While ventilator exports are expected to rise, the recent research showing the durability of the COVID-19 virus on surfaces like phones and currency notes, items like sanitizers (and the unadulterated alcohol needed to make them) and soap will continue to be relevant, the report added.
Other categories that have seen significant growth include classes of rubber used in surgical equipment and gloves, as well as the gloves themselves, and medical equipment, as countries build up healthcare infrastructure and capacity to provide the care needed for recovery from the pandemic.
Out of $114 million, a fifth of the total exports during the selected period went to North America, with the U.S. contributing $98 million and Canada accounting for $16 million.
In the list of India’s top 20 exporters, EU countries like Germany, France, the Netherlands, Belgium and Italy account for $ 93 million, with the U.K. bringing that total to $103 million.
Other major export destinations include India’s traditional trading partners, such as China, UAE, Vietnam, South Africa, Singapore, Thailand, and Turkey. Together, these contributed $ 103 million worth of exports during the January-July 2020 period.
“Over the last four years, on average, India exported around $ 539 million annually in these selected categories. From January-July of 2020, India exported $ 532 million, and could come close to doubling the average if the pandemic worsens,” it said.
Exports for these commodities have also focused on the major manufacturing and textile hubs, with Gujarat, Maharashtra, Tamil Nadu and Karnataka accounting for almost 70% of the total value of exports.
These States compete with a number of countries in the different product categories that India exports.
Asked how sustainable these exports would be Pushkar Mukewar, co-founder & Co-CEO, Drip Capital said “With places like the U.S. and Europe reporting the second wave of COVID-19 clubbed with the upcoming flu season in these regions, the healthcare system will be under fire again. Both the diseases have similar symptoms and diagnoses, healthcare workers will need to be extra cautious to make sure that they are not getting sick. However, the demand will be led by how effective governments are at procuring PPE.”
He said as long as the pandemic would continue, PPE volume are sustainable. “Having said, we may still see a market post the pandemic due to behavioural changes in the public. There's going to be a market for masks and many countries have revamped their disease control organisations (like CDC), which is likely to be a regular buyer of PPE,” he said.
