While exports of engineering, electronic, and pharmaceutical products have shown recovery in key markets such as the US and Europe in October, exports of these items have registered a sustained decline in China due to the deepening property sector crisis. Exports to China slipped by a sharp 28 per cent to $15.32 billion in FY23, while imports jumped by 4.16 per cent to $98.51 billion.

“Exporters are concerned as China is already facing headwinds that have hit demand. Although there is no immediate threat as two to three months worth of inventory is maintained, it is crucial that the spread is contained,” Ajay Sahai, head of the Federation of Indian Export Organisation (FIEO) said.

India’s engineering goods exports to China in October, as per official numbers, slipped over 18 per cent to $213.24 million compared to $260.30 million in the previous month. The share of engineering exports in India’s total merchandise exports stands at 24 per cent.

“Engineering exports to China have been declining even as it has improved in other regions such as Australia, Russia, Saudi Arabia, the United Kingdom and the US after eight months. That is the reason the already declining exports could be hit due to the rising respiratory illnesses in China,” Arun Kumar Garodia, Chairman of the Engineering Export Promotion Council of India (EEPC) said.

That apart, India hugely depends on the supply of Active Pharmaceutical Ingredients (APIs) – key element for parma manufacturing in India. Exporters said that a disruption in the supply of APIs from China was a key fear during the outbreak of coronavirus disease (Covid-19) in China.The percentage of API imports from China has spiked from around 1% in 1991 to about 70% in 2019.

However, imports have not faced disruption yet.

“The imports remain unhindered at the moment but the last time there has been an impact in the way we conduct business with China after COVID-19. There has been about 80 per cent drop in physical travel by traders and most meetings are conducted on zoom calls. Except for the non-tariff barriers announced by the government such as quality control order on toys and other products imports from China are uninterrupted,” Atul Kumar Saxena, President of the Indian Importers Association (IIA) said.

Reuters reported China’s National Health Commission spokesperson Mi Feng stated that the surge in acute respiratory illnesses was linked to the simultaneous circulation of several kinds of pathogens, most prominently influenza. Moreover, Chinese health authorities have not detected any unusual or novel pathogens and provided the requested data on an increase in respiratory illnesses and reported clusters of pneumonia in children, as per the World Health Organization (WHO).

Union health ministry on November 26 asked the state governments to review hospital preparedness, even as it reiterated that there is “no need for alarm”.

The fresh wave of illness has, however, renewed fears of the experience of the global pandemic that saw governments imposing harsh lockdowns across the globe and millions of dead.The global economy contracted by over 3 per cent, according to the United Nations World Economic Situation and Prospects (WESP) sparking massive unemployment.