Some Indian states are reimposing lockdown as COVID-19 spread fast in the country, threatening the recovery in the country’s energy demand. India recorded 38,902 new confirmed cases on Sunday, with total cases reaching 1.08 million, the third-highest in the world, behind only the US and Brazil. The surge follows a gradual lifting of the lockdown, starting in early May.
The current federal lockdown is due to be lifted by the end of this month, but state governments are already moving to tighten measures. Bihar, where a large number of Indian migrant workers come from, imposed a 15-day shutdown until July 31 amid a spike of new COVID-19 cases. India’s technology hub Bengaluru will likely extend lockdown by another week after cases surged following business reopening. Chhattisgarh on Saturday decided to reimpose lockdown for one week after some parts of the region saw new cases increasing.
Other states such as Kerala, Tamil Nadu, Uttar Pradesh, Uttarakhand, Assam, West Bengal, and Maharashtra, are implementing partial shutdowns, which disrupt businesses and weigh on consumer confidence. Maharashtra, Tamil Nadu, Delhi, Gujarat, and Karnataka accounted for more than 65% of COVID-19 cases in India.
India’s fuel consumption reached about 85% of normal levels in June and had been expected to recover further this month. However, diesel and gasoline demand fell by 18% and 6% month-on-month, respectively, in the first half of July. Some economists expect India’s economy to contract by as much as 7.5% in the fiscal year of 2020-2021, with the IMF projecting a 4.5% contraction.
