“Exports ban ties hands of N95 mask producers” Critical Analysis

 
“Exports ban ties hands of N95 mask producers” article by Teena Thacker, published on
February 12, 2020, in The Economic Times, talks about the ban on the personal protective
equipment, including surgical masks, gloves and N95 respirators by the Indian Government
owing to domestic shortage and how the ban affects the export-driven businesses in India.     
 
The N95 respirator, an industrial-purpose face mask, is in huge demand as people seek to protect
themselves from the Coronavirus. Due to the spread of coronavirus and in order to curb it, the
demand for protection equipment has increased manifold, not only in China where the outbreak
is at a rise but all over the globe. India's manufacturing industry has gone into overdrive to
produce more such personal protective equipment to leverage the growing domestic and global
market. There are only two companies in India, namely Venus Safety and Magnum
Medicare that manufacture these N95 respirators that have largely been exported for industrial
usage to countries in Europe, the Middle East, and the US for the last 20-25 years. Recently due
to Coronavirus, in order to meet the mass global demand, the Indian manufacturers are producing
more N95 and surgical face masks in order to cash in on the opportunity. The average cost of
manufacturing the N95 mask is about ₹10-12. But due to market dynamics, these are being sold
at a much higher price. Indian manufacturers and distributors of surgical face masks are in
overdrive to meet a surge in global demand for protective gear amid the coronavirus outbreak.
With an eye on enormous profits, these suppliers turned their focus to exports, particularly China
– causing a chronic local shortage of masks due to the relatively lower margins in the domestic
market. 
 
Export norms are relaxed by the government to facilitate exports but in this case, it leads to
scarcity of such protection equipment in India itself. Globally, governments keep a stock of these
personal protection items for use during emergencies. However, in India, there is no such system
and therefore there was a need to build reserves of these protection equipment. Hence, the Indian
government tightened the export norms for protective equipment to build a national reserve of
personal protection.

As per Abhay Pandey, National President, All Food and Drug Licence Holder Foundation
(AFDLHF), “In the international market, the wholesale going rate of such face masks have
climbed to $8-10. This makes exports far more remunerative for manufacturers than supply to
the domestic market. Given the high and lucrative demand in international markets,
manufacturers are ignoring the need in local markets and busy in meeting the export demands.
These trade activities have put Indians at the risk of not getting the masks to be safe from this
virus. Hence, we demand that the government should stop exports of these masks and control its
price in the local market”

A ban on such products that are in high demand will cause a lot of loss to the exporting country
as it can’t cater to a potential market even though it has the required resources. The international
business environment is changing constantly so you need to develop adaptability, flexibility and
innovation capabilities to quickly respond to the business environment changes. Like in this case
the outbreak of Coronavirus in China is a good opportunity for Indian manufacturers to increase
their revenue by meeting the high demand for masks by China. Such temporary bans by the
government of India put the manufacturers at a disadvantage and affects the international
business market at large.