Index > Briefing
Tuesday, May 18, 2021
India's Deteriorating COVID-19 Outbreak Changes Global Pandemic Battle

The condition of India's COVID-19 outbreak remains in a critical condition. Data released by the Health Ministry of India on May 16 showed that there were more than 310,000 new confirmed cases in India in a single day, with a total of more than 24.68 million accumulative confirmed cases, which means that India had more than 300,000 daily cases for 25 consecutive days. As of the 17th of May, India has had more than 263,000 new confirmed cases, 4340 new deaths and a total of 278,700 deaths. Indian Prime Minister Narendra Modi has announced that the Indian government was "on a war footing" in containing the virus.

Figure: Trend of newly confirmed COVID-19 cases in India in the past 30 days

More worryingly, India's novel coronavirus has mutated and its mutant strain B.1.617 is spreading across India and abroad. As tracked by ANBOUND, India's new coronavirus variant B.1.617 exhibits the two genetic mutations of E484Q and L452R. Individual mutations such as the E484Q and E484K are similar; the latter of which previously mutated in the United Kingdom, South Africa and Brazil. On the other hand, L452R appeared in the California variant CAL.20C. The bigger problem is, for the first time in India, these two virus mutations appeared at the same time, hence why it is called a "double mutation". ANBOUND has already emphasized that this particular virus mutation from India deserves special vigilance by China. This is because the deterioration of the outbreak in India shows that the "temperature sensitiveness" of the coronavirus has changed, and also because China's vaccine technology development has to deal with the challenge of the mutated Indian strains.

We believe that the deterioration of the outbreak in India is very likely to change the existing trajectory of the global battle against COVID-19, potentially even posing great challenges to some countries that have previously handled the pandemic well.

The severe COVID-19 outbreak in India has caused a very serious humanitarian disaster. India is a country with a large population with more than 1.3 billion and relatively backward economy, thereby giving great pressure on India's limited medical resources. When the virus becomes more resistant to higher temperature than it previously was, India would become a hotbed for the spread of the virus. Compared with India, the population of the United States numbers 330 million while Brazil 200 million. India has the second largest number of confirmed cases in the world, just behind the United States, as well as the third largest number of deaths in the world comparing to about 600,000 deaths in the United States and 436,000 in Brazil. However, due to India's large population base and rapid rate of new infections, if the current trend continues, it is estimated that in the near future India may become the country with the greatest number of new confirmed cases and deaths. Such a huge scale of cases and death toll will have an unavoidable impact on the world today.

It is not only India that is worried, the worsening outbreak in India has put a lot of pressure on Southeast Asian countries. India's geographical proximity to Southeast Asia means there are higher personnel exchanges between the two regions, and this will cause Southeast Asia to face a higher risk of importing new cases. On the 18th of May, the Center for Covid-19 Situation Administration (CCSA) of the Thai Government announced that a Polish engineer which had recently departed from India and entered Thailand on a ship to undertake drilling services in the Gulf of Thailand had developed symptoms and was later diagnosed to be infected by the Indian variant. There are many similar examples and if the outbreak in India maintains its current pace, countries around the world may continue restricting travel to and from India.

If the situation continues to deteriorate, it will have a devastating impact on the Indian economy. More than half of the local governments in India have now chosen to impose lockdown measures and recently such measures have been extended to better control the situation. Economically, many main industries in India are at risk. The Indian textile industry for instance, occupies a pivotal position in the global textile industry and is the world's second largest textile producer; it is also the world's fifth largest garment trading country. Because of the COVID-19 outbreak however, the industry is currently facing many problems such as labor shortages and the suspension of production activities. According to statistics from the consulting firm Wazir Advisors, the rate of absenteeism among the workers in Delhi and Bangalore, India's main garment production centers, is as high as 50%. President of the Federation of Gujarat Weavers Welfare Association (FOGWA) Ashok Jirawala also mentioned that the textile production in Surat has fallen by 22% compared to March 2021. In 2020, the consumption and exports of India's domestic apparel industry have fallen by 30% and 24% respectively.

The seriousness of the coronavirus outbreak in India has also disrupted the global vaccine production. In the past, vaccines produced in India accounted for 60% of the global market share. The Serum Institute of India (SII) is the world's largest manufacturer of vaccines and could produce 1.5 billion doses of vaccines each year, which can be exported to more than 170 countries around the world. The SII announced in 2020 that it will produce up to 200 million doses of the new crown vaccine for 90 countries and regions. However, since India suspended the export of vaccines in March, as the largest supplier of the COVID-19 Vaccines Global Access (COVAX) led by the World Health Organization, the SII has yet to have any supply plan.

In addition, the outbreak in India too, has caused a considerable blow to the global industrial ecology and supply chain. In terms of the global supply chain, according to data from the United Nations Conference on Trade and Development (UNCTAD), approximately 80% of global commodity trade is carried out by ships and more than 200,000 of the approximately 1.7 million seafarers in the world are from India. In recent decades, India's lower labor costs have attracted various multinational companies and a large amount of information technology and operations have been outsourced to India. According to data from the National Association of Software and Service Companies (NASSCOM) of India, nearly 4.4 million people in the country are employed in the IT industry and business process management. The Indian outsourcing industry has a total value of nearly US$200 billion with nearly 5 million employees. Many young people were unfortunately infected in the second wave of the pandemic, and most of them are English-speaking skilled workers who are difficult to replace.

Final analysis conclusion:

The outbreak and continued deterioration of the COVID-19 pandemic in India is not just affecting the country itself. Since India has a population of more than 1.3 billion and plays an important role in some of the global industrial and supply chains, the effect of the outbreak in India on many areas cannot be underestimated. Not only will both India and Southeast Asia feel the impact of this, it will also affect the gradual reopening of some countries in the post-pandemic recovery process.

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