Rising fuel prices further dent stressed sectors of India’s economy

The Baddi-Barotiwala-Nalagarh industrial hub in Himachal Pradesh, surrounded by a panoramic view of the Shivalik hills, is home to Asia’s largest pharmaceutical manufacturing hub. It is serviced by a fleet of 13,000 trucks from small- and medium-sized transporters who have banded together to form the Nalagarh Truck Operators Union, Asia’s largest truck union.

In the past, whenever the union ran into friction with industry, it held its ground. For instance, in July 2020, when the union increased freight rates in response to a hike in diesel prices, the industry expressed displeasure but gave in to the union’s demand. On occasion, local politicians had to intervene between the union and industry to broker a resolution, for the union and its large membership carry political heft during elections, association members told us.

However, a year of economic disruption caused by the Covid-19 pandemic and record high fuel prices have brought the union to its knees, said members, most of whom are saddled with financial commitments and loan repayments at a time when their business has dried up in an economy that clocked its worst performance in 74 years since India’s independence. In the fiscal year April 2020-March 2021, India’s economy contracted by a record 7.3%.