Residents queuing for essential items at a store in Mumbai, Maharashtra State, May 8. Most Indian states are imposing strict business and movement curbs through May due to increased COVID-19 activity, prompting significant disruptions.
Source: Ganesh Dhamodkar/Wikimedia Commons
Ongoing Measures to Curb Disease Spread
India has reported over 22 million COVID-19 cases with over 240,000 deaths. The country is facing a new peak of around 400,000 daily infections fueled by new disease variants in recent days. Despite key urban centers like Delhi and Mumbai seeing a slight decrease in cases since early May, multiple eastern and southern states are facing a rise in infections. Several hospitals in COVID-19 hotspots, mainly in northern Indian states, are unable to meet demand for beds, intensive care units, drugs, and medical oxygen. Although the central government is augmenting medical supplies through foreign aid, increased local production, and modified distribution mechanisms, the situation is unlikely to improve through early June. Potential hindrances include a lack of trained healthcare personnel and medical infrastructure, in addition to poor enforcement of preventive measures. Reports estimate that just over 2 percent of the Indian population has completed vaccination. A supply shortage, as well as disagreements between state and central governments over funding and procurement, have stalled inoculation progress.
Overview of Ongoing Measures
Several states in India are imposing business, movement, and transport controls due to increased COVID-19 activity and concerns on new disease variants. Typical measures comprise office closures, on-site workforce limits to a maximum of 50-percent capacity, as well as nightly and weekend curfews that affect public movement and business operations. Cargo transport, industrial areas, and strategic economic sectors such as the IT/BPO sectors are largely functional. Affected locations include major cities such as Ahmedabad, Bengaluru, Chennai, Delhi, Mumbai, Noida, and Pune. Regional variations in adherence to and enforcement of "lockdown" measures that limit nonessential activity will continue.
Business Impacts
Resurgent COVID-19 activity has prompted most countries to restrict travel for passengers and carriers from India. The curbs are significantly affecting employee mobility, especially in the shipping sector. Maritime crews with Indian citizens, as well as vessels with travel history to India are not allowed to enter multiple ports as of mid-May, potentially disrupting shipping and port operations.
A ban on all or nonessential e-commerce delivery services is ongoing in Chhattisgarh, Delhi, Haryana, Jharkhand, Maharashtra, and Tamil Nadu. There is no imminent standardization on such rules through at least May, despite discussions by central government officials. Local traders have also threatened protests if the government allows full resumption of e-commerce services. In addition, strict curbs on commercial activities - mainly in urban centers - have triggered an exodus of workers, possibly causing shortage of low-skilled workers in industries and ports. Multiple regions like Delhi, Maharashtra, and Tamil Nadu also obligate employers to provide transportation and/or accommodation for employees, as well as ensure on-site manpower are either vaccinated or undergo COVID-19 testing every two weeks. Although the Indian government has announced any workplace with 100 beneficiaries can apply for vaccination camps, vaccine availability is likely to be affected due to increased demand. Workforces may be limited due to vaccine availability and compliance with testing routines. Further business and travel restrictions are likely to affect employee availability, delivery schedules, and operational logistics in the medium term.
India is likely to continue prioritizing resumption and maintenance of economic activity despite higher caseloads. However, short-lived recurrent "lockdowns" are probable in the coming months, mainly in urban centers. Contingency plans for site closures, shifts to work-from-home policy, as well as compliance with dynamic local pandemic rules will remain a priority for most businesses through 2021.
Related Intelligence Alerts
Author(s)
