India plans to relax restrictions on certain businesses after April 20 amid the extended coronavirus-related lockdown. However, market participants told SSESSMENTS.COM that it would unlikely to boost petrochemical demand in the country as downstream plants were expected to remain shut or operate at lower rates.
The government categorizes the oil and gas industry under essential services and allows them to operate during the lockdown. However, refining industry sources informed SSESSMENTS.COM that both state and independent refiners are operating at around 50% of capacity as downstream industries were forced to close. As a result, refiners’ petrochemical inventory continues to rise, the sources added.
Despite the relaxed lockdown restrictions, only approved manufacturers operating in special economic zones and areas designated as green zones will be allowed to resume operations. Besides, they will have to follow guidelines from both the central and state authorities, according to the president of the Automotive Components Manufacturers Association of India (ACMA), Deepak Jain.
Some packaging producers have reopened their factories but faced labour shortages and logistical bottlenecks. Ecoplast, a producer of co-polymer films and co-extruded polyethylene, in its notification to the Bombay Stock Exchange (BSE), said that it might resume production at its Valsad site in Gujarat after May 3 when the lockdown is expected to be fully lifted.
The chair of Indian automaker Maruti, R C Bhargava suggested that the company might not be able to reopen soon as many of its suppliers and vendors are in the containment zones. Most auto producers in the country have not indicated that they would restart operations after April 20, when the relaxation is planned to take place.
The Indian Chemical Council said in a recent statement that even if manufacturers are granted permission to resume production, they will likely face workforce issues. As SSESSMENTS.COM noted, India’s lockdown prohibits people from moving across the country, making it impossible for migrant workers to return to their workplaces.
