Consumer electronics and automakers in India are considering reducing output starting in April, as supplies of components from China and Hong Kong have dried up in the last week, as sections of China have imposed a lockdown in response to an increase in Covid-19 cases.

From next month, consumer electronics manufacturers will be obliged to decrease production, and enterprises importing finished goods from China may encounter inventory shortages.

Given that China is one of the main component sourcing markets, automakers are likewise assessing the situation.

Pradeep Jain, managing director, Jaina Group, which retails Karbonn and Sansui brands, says, “Shipments have already been delayed by 10-15 days, which will affect production next month.

China is a major sourcing source for many goods and components for the Indian automotive sector, according to Vini Mehta, Director General, Automotive Component Manufacturers Association, and a lockout there might cause a supply chain crisis in the Indian industry. He adds that the topic was also discussed at the association's latest executive committee meeting.

Many Chinese cities are under lockdown due to record numbers of Covid-19 cases as a result of China's zero-Covid policy, including the technological capital Shenzhen. According to officials, this has caused congestion at various Chinese ports, as well as restrictions on border movement to Hong Kong, which is another significant transit point for Chinese products entering India.

The buzz in the media is that companies like Apple's iPhone manufacturer Foxconn, as well as automakers Toyota and Volkswagen, have been compelled to halt some activities in China.

Mehta says, “the auto sector is already facing a lot of constraints – from spike in commodity prices to supply chain disruptions due to geopolitical crisis due to shortage of semiconductors. This adds another element of uncertainty and cost. Will join.”

Apart from future delays in component availability, Hariom Rai, chairman of Lava International, a domestic mobile phone and computer manufacturer, predicted that costs may rise.

“Since the industry has increased the holding period of raw materials to 30-45 days, the impact on production will be felt in April”, says Kamal Nandi, business head, Godrej Appliances.