international analysis and commentary

India’s moment of reckoning – even beyond tackling the pandemic

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In India 1.3 billion people have been under complete lockdown since March 24th when Prime Minister Narendra Modi announced a 21-day complete ceasing of activity, except the movement of essential goods and services.

In the world’s biggest ever quarantine, infamously crowded cities like the capital New Delhi, the financial capital Mumbai, and Bengaluru, home to the country’s tech industry and legendary traffic snarls, have efficiently, if a bit eerily, emptied. What New York has still failed to do; New Delhi has done – almost the entire city is staying at home.

India’s number of Covid-19 infections is just reaching 900 with 20 deaths, but the rate is rising swiftly and some fear that the country is entering its most critical phase. Some questions have been raised about whether India is testing enough, but with the size of its population, it is impossible to accurately estimate how large the testing sample would have to be to make any significant prediction. At the moment, Indian infection and death rates are a small fraction of those in the US, Italy or even Iran, but only the weeks ahead would determine whether that trend would last.

So, India is experimenting with a shutdown unlike any other in its, and perhaps the world’s, history. It has announced relief measures worth $22.6 billion, and on the monetary side, its central bank has introduced other measures like deferred payment of loans and cut in rates to boost liquidity of nearly an equal amount. Using its evolved financial technology architecture, India plans to provide sustenance cash to millions of its most vulnerable people – from low income farmers to underprivileged female workers.

Every Indian state is following the rules of a complete lockdown alongside major efforts to distribute food and essentials to the poorest on a massive level (by some counts the Delhi government is looking to feed 200,000 underprivileged people every day for free). Even Indian railways, one of the largest rail networks in the world, is making use of its stationary trains by converting many of them into temporary quarantine units for patients and medical staff.

Many of India’s famed engineering colleges and their incubation centers have created teams that are working to speed the process of manufacturing two critical things – ventilators and masks.

As deadly as the coronavirus is, it has provided, ironically, a rare moment of common ground between political parties in India’s usually cacophonous politics. From major Indian corporations like the house of Tatas, Reliance Industries run by the Ambani family or auto-to-tech major Mahindra, have loosened their purse strings – from putting together a private hospital for Covid-19 patients (Reliance) to mass funding to manufacture of relief items (Tatas and Mahindra).

India has sent special airplanes around the world to help evacuate citizens stuck in Covid-19 affected areas, and transported relief material in February to Wuhan in China, the site where the virus originated.

On the international stage, India has been part of a historic G20 conference via video-conferencing, which committed $5 trillion towards the recovery of the global economy, and in the neighborhood, there was a rare moment of South Asian nations coming together in another video conference to discuss ways to combat the disease together.

There is an abiding sense in India that this pandemic marks both a real crisis – the biggest of Prime Minister Modi’s career – and a signal of a trade opportunity. With two televised addresses to the nation within a week, Modi has shown that he is not shying away from the challenge (in his first address, he asked people to stand and cheer for health workers, and stay at home; in his second address, he beseeched people to stay at home for three weeks, hands folded), but new worries have surfaced as the lockdown has led to a mass migration of low skilled workers from major cities to their native small towns and villages. The fear that such a migration could spread the disease rapidly has led to India’s biggest state announcing that around 100,000 people returning to the state would be tracked and quarantined in every district of the region.

The opportunity lies in a possible revamp of global supply chains after the crisis recedes. As deep questions arise about the world’s dependence on the factories in China, could India step in and provide a new haven for manufacturing? Many in India believe they could.

From the manufacturing of mobile phones to medicinal cloth and organic food, India hopes that the world will look at it afresh, as a more stable and indeed more trustworthy destination to park capital.

But first the world, no doubt, will wait and watch how the Covid-19 pandemic finally plays out, also in India. What will be the final extent of its spread and how will India handle it? Will three weeks, for instance, be enough, or will more lockdown be needed to completely control the spread of the disease? This is most certainly a moment of reckoning that will decide if India transitions into the global leadership position that it has longed for by showcasing its prowess in controlling and defeating what even the US is struggling to overcome.