India's accelerated vaccination drive may limit the economic disruption caused by a resurgence in COVID-19 cases, Barclays said in a note on Monday, although it warned that shortages in vaccine supply could weigh on the campaign's progress.
India racked up the world's highest daily tally of coronavirus infections with 168,912 new cases on Monday, overtaking Brazil as the second-most affected country by the pandemic and causing a plunge in Indian stocks and the rupee.
Officials in the worst-hit state of Maharashtra, home to the financial capital of Mumbai, said they were considering a broader lockdown this week after large closures at the weekend.
India will be broadly on track to vaccinate 300 million people by August and 500 million by end-2021, Barclays said.
"Given the increasingly faster vaccine rollout, the disruption from rising infections and related lockdowns might be limited ,,risks to our growth outlook are balanced for now."
Some states, including Maharashtra and Odisha, have complained of a scarcity of vaccines during the second wave that has forced some centres to turn away people.
"India's ability to continue the current run rate may be at risk, given incremental news flow of supply shortages and vaccine bottlenecks," Barclays said, adding that the constraints were likely to remain given surging demand.
Barclays said that if current restrictions remain in place for two months, it could hit nominal gross domestic product by 0.34 percentage points and real GDP by less than 0.20 percentage points, almost twice the impact it calculated previously.