Coronavirus: How virus & vaccine play sways business | India Business News – Times of India

MUMBAI: After an extreme shortage in April, India now faces an oversupply of surgical and N95 masks. More than half of the manufacturers (over 100) have either downed shutters or are planning to shut shop. Most players, which entered the industry to fulfil the government’s vision of self-reliance or ‘Atmanirbhar’ after Covid, are now saddled with huge inventories, and under-utilised plant and machinery.
Industry experts and multiple companies whom TOI spoke to blame red-tapism, poor domestic demand and unethical market practices, resulting in just one-third capacity utilisation. When the pandemic struck, a sudden spike in demand for protective masks had created a panic situation. Between April and June, new players entered and companies ramped up production pinning hopes on rising domestic and global demand.
“The installed capacity to produce N95 masks is over 20 crore pieces per month, with the utilisation being a meagre 10%. For 3-ply (surgical) masks, capacity is over 60 crore units per month, while 30% is utilised. Established players were able to use their full capacity for a brief time, but once exports were banned, demand started dropping drastically, and supply kept getting created just as fast, resulting in extreme oversupply,” All India Mask Manufacturers Association president Anshumali Jain told TOI.
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The government had banned exports of all types of masks in March to avoid a shortage in the country, at a time when Covid infections had started rising.

The slump in prices was triggered in June by the deluge of low-priced duty-free Chinese imports. “The government opened up restrictions on exports of N95 masks in October, a bit too late. The Indian market had a glut of overcapacity, falling prices, low-quality standards, with institutional buyers’ procurement at L1 pricing (lowest bidder) based on fake USFDA/ NiOSH certificates. Many manufacturers are now struggling to sell finished goods, or even raw materials’ inventory, below costs to create cash flow. It’s survival of the fittest, and those who can export surplus capacity,” said industry body AiMeD’s forum coordinator Rajiv Nath.
Exports for 3-ply masks were allowed from August, but India had already missed the bus to become an export hub.
“There is no demand for N95 masks for the last few months, and our machines have been idle,” says Vipul Gupta, who is looking for buyers for his plant in Okhla, Delhi.