Elizabeth Moore, coordinator general of the ACT

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Q) How do you see a standoff between India and China impacting markets in the near term? Do you think that if the tensions escalate further it could take the Nifty towards 7,500 despite positive global cues or liquidity?A) India China border dispute is a decades long tussle it is an extremely important matter politically and may have wider ramifications on the geopolitics of the South Asian region in the long run.Manufacturers in the Asian region enjoy low labour costs, relatively relaxed environmental norms, and government subsidies.China’s chemical industry continues to dominate the sector. This is reflected in rising China’s share in global chemical sales, which increased from 24 percent in 2010 to 37 percent in 2018.During this phenomenal growth period, the focus of China was more on infilling the huge and rapidly growing domestic demand.Closure of plants in countries such as the European Union and China owing to increasing environmental concerns has opened doors for Indian manufactures to invest further in specialty chemicals.Recently Chinese suppliers have raised the prices of various active pharmaceutical ingredients (APIs), key starting materials (KSMs) and certain drug intermediates, by more than 20 percent. This is a major worry for Indian customers.Companies in the chemicals and agrochemical segment that have weak backward integration will be impacted the most due to this spat between India and China.Q) Foreign Institutional Investors (FIIs) which were net buyers in early June have turned net sellers in the last six trading sessions as on June 17.

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