India Inc. steps in to augment oxygen supply

India Inc. has rushed in to rescue the nation reeling under a mammoth oxygen crisis. After a severe shortage of medical grade oxygen crippled hundreds of hospitals in the northern and western states, an array of corporate houses has quickly devised strategies to beef up oxygen supply and save thousands of patients struggling for breath.

Industry officials point out that the mess is primarily due to supply constraints, and not because of lack of oxygen, at least for now. The dearth of cryogenic containers—double-walled vessels with multilayer insulation, designed for storing liquefied gases at very low temperatures—is the prime reason behind the delay in transferring oxygen to various cities desperately waiting for it. However, there are rising concerns about depleting oxygen stock if the pandemic condition worsens and the infections spread wider.

Corporate India is now trying to address both the issues—related to supply of oxygen as well as its logistics—by airlifting more cryogenic containers and oxygen. On April 23, Prime Minister Narendra Modi had held a meeting with oxygen manufacturers in the country via video-conferencing. The meeting was attended by leading industrialists and top honchos including Mukesh Ambani, Sajjan Jindal, Naveen Jindal, T.V. Narendran, and Soma Mandal.

A long list of companies which includes Tata group, Reliance Industries Limited (RIL), Vedanta group, Larsen & Toubro, Jindal Steel and Power (JSP), ITC and Bharat Forge -- have stepped in with offers. Mumbai-based Allcargo Logistics has offered to ship 500 oxygen concentrators from Singapore. Public sector companies such as Indian Oil Corporation (IOC) and Bharat Petroleum Corporation (BPCL) have also started diverting oxygen produced at their refineries to augment the availability of medical oxygen across the country.

Both JSP and Vedanta group will supply oxygen from their plants. ITC on Saturday said in a statement that it has tied up with Linde India to import two dozen cryogenic containers of 20 tonnes each from Asian countries. It also said it is airlifting large numbers of oxygen concentrators for distribution.

Most of the companies are supplying liquid oxygen at zero cost to hospitals.

On Saturday, many corporate honchos took to social media seeking ideas to help the needy. “We are urgently looking for avenues to import oxygen concentrators into India,” tweeted Shailendra J. Singh, managing director of Sequoia Capital.

Delhivery is placing two charter flights tentatively on April 28 and 30 for import of oxygen concentrators from China. Sahil Barua, co-founder of Delhivery, wrote on LinkedIn, “We are flying charters into India with oxygen concentrators and other essential supplies and can build more capacity on demand. If you need help with logistics or wish to collaborate with us on this, please reach out to Vikas Kapoor or to me immediately (ceo@delhivery.com).”

To help seamless imports, the government on April 24 exempted oxygen and oxygen-related equipment from customs duty, along with Covid-19 vaccines.

Several start-up founders and investors have pooled in funds as part of the ACT Grants initiative to import oxygen and cryogenic containers from abroad. “Our focus is to immediately tackle shortage of oxygen supply by supporting deployment of 25,000-plus oxygen therapy devices (concentrators and cylinders) across India,” the group said in a statement.

ACT Grants has got in touch with the US-based Manufactured, a product sourcing company. “We have the ability to ship and deliver up to 20,000 oxygen concentrators to India within 7-10 days, at an average cost of $300-$550 per unit ex-factory China,” tweeted Pranay Srinivasan, CEO of Manufactured.

Indian Embassy in Saudi Arabia said in a statement that it is partnering with Adani Group and Linde to ship 80 MT of liquid oxygen to India.

A high-level meeting, chaired by the prime minister, emphasised the immediate need to augment the supply of medical grade oxygen as well as equipment required for patient care, both at home and in hospitals. So, in order to augment their production and availability and to meet the rising demand, all oxygen and related equipment have been given full exemption from basic customs duty and health cess on import of several items for a period of three months with immediate effect.

The government has listed several items that are eligible for the duty waiver: medical grade oxygen, oxygen concentrator along with flow meter, regulator, connectors and tubing; vacuum pressure swing absorption (VPSA) and pressure swing absorption (PSA) oxygen plants, cryogenic oxygen air separation units (ASUs) producing liquid/gaseous oxygen; oxygen cannisters, oxygen filling systems, oxygen storage tanks, oxygen cylinders including cryogenic cylinders and tanks; oxygen generators, ISO containers for shipping oxygen; cryogenic road transport tanks for oxygen; and parts used for the manufacture of equipment for production, transportation, distribution, or storage of oxygen; among others.

According to an announcement, the Tata Group will import 24 cryogenic containers to transport liquid oxygen. By April-end, it hopes to increase the number of tankers to 38. Meanwhile, Tata Steel plans to increase liquid oxygen supply to 700 metric tonnes once adequate tankers are available.

RIL said it would increase the supply of liquid oxygen to over 700 metric tonnes per day to states like Maharashtra, Madhya Pradesh, and Gujarat. Reportedly, RIL has tweaked manufacturing at its Jamnagar oil refinery to produce over 700 tonnes a day of medical-grade oxygen.

JSP said it would supply 500 metric tonnes of oxygen and has already begun dispatches. Naveen Jindal, chairman of Jindal Steel and Power, said in an interview to a news channel that there is no dearth of oxygen. “It was not planned to send as medical oxygen. This was to be used in steel plants. Now we are diverting all these. The infrastructure, availability of tankers and the distance covered need to be looked at,” he said.

IFFCO, a cooperative fertiliser major, is meanwhile planning to set up oxygen plants in Uttar Pradesh, Gujarat, and Odisha, at a cost of ₹30 crore. According to a spokesperson, the order has already been issued and the company hopes to erect the plant in the next 15 days.

Meanwhile, the Indian Railways deployed special trains to quickly ferry oxygen from one state to another. It ran the first oxygen express from Kalamboli in Maharashtra to Vizag and back to Nasik. While some tankers were taken to Nasik, others went to Nagpur, the two cities facing severe shortage of oxygen.

According to a press statement by the health ministry on April 15, the country has a production capacity of 7,127 MT of oxygen per day. In addition, the surplus oxygen available with the steel plants is also being utilised according to the need. Against the daily production capacity of 7,127 MT, the total production has been 100% since the past few days, as directed by the inter-ministerial Empowered Group, since supply to medical oxygen has gone up rapidly. “On April 12, the medical oxygen consumption in the country was 3,842 MT, that is 54% of the daily production capacity.” In addition, the ministry claimed there were stocks in excess of 50,000 MT.

Of course, a significant part of the oxygen produced by cryogenic air separator units is meant for industrial use. On April 18, the central government prohibited manufacturers from supplying oxygen for non-medical use, but exempted nine industries such as pharmaceuticals, ampoules and vials, steel plants, petroleum refineries, nuclear energy facilities, oxygen cylinder manufacturers, waste-water treatment plants, food and water purification—process industries that require uninterrupted operation of furnaces. These industries will require one-third of the daily production.

Before the demand for oxygen goes above 5,000 MT, India needs to bring in adequate stocks through imports. That is critical for the country.