As the coronavirus concerns rise across the globe, India Inc is starting to feel the heat. The Indian chemical sector is closely monitoring the outbreak as it imports a significant portion of its raw material from China. A prolonged trade halt will impact margins and Indian firms are hoping that the situation in the neighbouring nation improves soon.

CNBC-TV18 caught up with Manish Kiri, MD of Kiri Industries, RV Bubna, CMD of Sharda Cropchem and Rajesh Aggarwal, MD of Insecticides India to understand the impact on their business.

While talking about his exposure to China, Bubna said, “Our sourcing is about 97 percent from China and if the things go on like this, we will have some adverse impact. We are also very confident about the flexibility and resilience of the Chinese people and factories and the next 10 days will be crucial because some of the factories have started production today, some will start after three days, some will start after a week.”

Manish Kiri of Kiri Industries said, “In the dye industry it is generally a positive impact. Prices of both the products H-Acid and Vinyl Sulphone have moved up in a very short time. Around 20-30 percent. We are expecting that the prices would further go up.”

He further added, “In general dye industry, 20-30 percent import is Chinese raw materials, while the majority of the raw materials that we produce are India based. So for that reason, the net effect would be that the export prices would go up, domestic prices of dye as well as of intermediaries will go up. The impact can go up to as high as 60-70 percent temporarily in terms of price increases of finished products.”

Talking about coronavirus impact Rajesh Aggarwal, MD of Insecticides said, “The imports from China are about 25-30 percent of our total purchases so it is a big number that way. We are covered for 2-3 months, but there are a lot of things which are important. Prices which were going down for the last 3-4 months continuously have suddenly seen a surge."