Energy disruptions will soon start impacting downstream sectors in India: The energy disruptions and escalating shipping risks are starting to impact India’s downstream economy, driving up petrochemical and logistics costs that are poised to inflate prices for consumer paints and essential medical devices.

Medical devices exposed to higher input costs

India’s medical device manufacturers are facing rising input costs due to a global tightening of polypropylene supplies while prices have increased by up to 30%. Economic Times reports. The price of this thermoplastic polymer, vital for syringes, IV bags, and catheters, has surged, straining producers of low-margin medical consumables.

Smaller manufacturers, which dominate the Indian market, are especially vulnerable to volatile raw material costs and energy shortages. Gas rationing has reduced production profitability, forcing some factories to consider switching to more expensive fuels. Protracted logistics or energy issues could increase hospital procurement costs and delay deliveries of essential medical disposables.

Paint may get costlier

Rising crude oil prices are beginning to affect India's consumer manufacturing supply chains. Specifically, coating producers, who rely heavily on petrochemical derivatives, may raise paint prices by up to 5% if oil markets remain elevated, according to an ANI report, citing Systematix Research. Companies may pass some of this cost pressure onto consumers, but final pricing will depend on oil trends and market competition.

Ins. firms reassess exposure

Indian insurers are reassessing marine cargo exposure and war risks for shipments routed through Gulf trade lanes, Economic Times reports. Mumbai-based private-sector insurer ICICI Lombard General Ins. has introduced a war-risk-premium of about 0.25% on cargo policies covering shipments linked to Gulf countries.

Exposure review: Insurers are compiling shipment-level information — including cargo value, vessel details, loading and discharge ports, and vessel location — to assess potential exposure to war-related risks. ICICI has not withdrawn war-risk coverage under existing policies and continues to operate within standard contractual and sanctions-related conditions. However, cargo movements linked to Israel will be subject to additional internal clearance depending on developments in the region.

Tags: