India Extends Nationwide Shutdown through May 3

Kegler Brown Global Business News

Smart Summary

  • India has extended its nationwide shutdown order through May 3.
  • All passenger flight and rail operations in India are accordingly suspended, though export/cargo operations are still permitted.
  • As demand continues to soften, businesses should be re-evaluating their manufacturing operations and disaster continuity strategies.

As I covered in a March 27 article, “ What U.S. Businesses with India Operations Need to Know about Modi’s Shutdown,” the pandemic had crippled the Indian market, meaning U.S. businesses with investments in the subcontinent had to reconsider supply chain strategies.

Prime Minister Narendra Modi and the Government of India have now expanded the nationwide shutdown through May 3, which includes not only local commercial operations, but also extends to all passenger air and rail travel. The restriction however does not apply to cargo operations to and from India, so U.S. companies can continue to export goods for sale.

While American companies will still face the same strategic obstacles, their current struggles exporting goods to and through the country may worsen as the delays continue to weaken the supply chain and soften demand. On a positive note, Modi did indicate that some states and districts that have successfully avoided the pandemic thus far may be allowed to slowly and conditionally resume some activities.

U.S. companies with international operations have been seeking alternative manufacturing facilities and labor options, but have found them hard to come by. Those companies would be wise to also re-imagine their manufacturing disaster continuity plans, as well, in order to prepare for similar supply chain disruptions in the future, as India and other countries will be much more cautious going forward about containing any potential pandemic.

More detailed guidelines are expected soon from India and we will continue to update our clients and partners on the developments.

Vinita Mehra is a director and chair of Kegler Brown’s Global Business team, where she works with clients on their India market strategies. She is licensed to practice law in Ohio and India, speaks fluent Hindi and offers years of practical, hands-on legal, business and personal experience in India.

Vinita can be reached directly at [email protected] or (614) 255-5508.