Fear grips MSMEs in K’taka as sector suffer huge loss following slowdown
The manufacturing sector in Mysuru fears that the COVID-19 pandemic could add to the general slowdown in the industry if the situation does not ease early. Mysuru has a huge network of ancillary units manufacturing automobile components but if the vehicle manufacturer suffers a slowdown then it will disrupt the production of local MSMEs that are part of the supply chain.
Similarly, the city has emerged as a centre for electronic hardware and supplier of components, But a disruption at one level could have a cascading impact down to the local units. Sudhakar Shetty, former president of the Federation of Karnataka Chambers of Commerce and Industry (FKCCI), told UNI that MSME units in Mysuru would suffer as they import most of the components in bulk from China and assemble it locally.
With the supplies taking a hit, the MSMEs had to brace to source raw materials from other places. He warned that if the pandemic does not ebb within the next 15 to 30 days then even the manufacturing sector would begin to feel the heat of the COVID-19 pandemic. “Most manufacturers, as a rule, maintain a buffer and inventory of the raw materials for about 90 days to tide over any uncertainty.
But these are already being utiliSed in the interim and once the stock exhausts and the COVID-19 situation does not ease, then the industry will begin to feel the heat,” Mr Shetty added. Meanwhile, the manufacturing units have begun to scout for raw materials from fellow-Indian suppliers as the imports from China have slowed down or stopped as a fallout of the pandemic, Suresh Kumar Jain, secretary, Mysore Industries Association told UNI.
However, he said fellow-Indian suppliers couldn’t match the cost of Chinese suppliers given their scale of production. But with no option the manufacturers would be forced to opt for Indian suppliers to meet their requirements though it may be at a higher cost, Mr Jain added. Earlier, the bulk of raw materials used to be procured from China, especially the electronic items, sanitary fittings and electrical gadgets besides chemicals.
Also, whether domestic suppliers can meet the sudden surge in demand and shore up their production to meet the orders is a question that is haunting the stakeholders. While there is no immediate fallout of the COVID-19 pandemic on the manufacturing sector, there is no escaping from its medium- to long-term impact, according to the stakeholders. It was pointed out that there has been no closure of units because of the prevailing situation but the same could not be said if the disruption in supply continues.
“This is a lesson for us not depend only on one country for raw materials and instead encourage India-made products,” said Mr Shetty. However, he ruled that apart from impressive slogans coined by the government, there was nothing on the ground to give a boost to Make in India concept by way of reduced interest rates or creating an infrastructure for mass production.