COVID-19 (Coronavirus) Outbreak: Impact on Indian Economy

According to a survey report, out of an estimated number of total cases of more than 1,80,000 the estimated number of deaths has crossed the level of 7,000 reaching approximately 7,100 globally. In India, the total number of cases have crossed 160 with fresh cases reported every day from across the country. COVID-19 (Coronavirus) is spreading at a fast pace throughout the world. The outbreak of COVID-19 (Coronavirus) was first reported from Wuhan, a commercial city in the province of Hubei in China on December 31, 2019. This blog post discusses Coronavirus and it impacts on the Indian Economy.

The Coronavirus (CoV) is a large family of viruses causing illness wherein the symptoms range from a common cold, headache and fever to more severe diseases like Middle East Respiratory Syndrome (MERS-CoV) and Severe Acute Respiratory Syndrome (SARS-CoV). A relatively new strain of the virus, COVID-19 has not been identified in humans so far. The World Health Organization (WHO) is working closely with governments, health organizations and global experts to provide advice to the countries, across the world, about preventive and precautionary measures.

The outbreak of COVID-19 (Coronavirus) in China is expected to have a disastrous impact on the global economy which might include economic downturn, logistics disruption and trade, and supply chain disruptions, commodities, etc. The GDP growth rate of China is expected to decelerate by 1% to 1.5% during FY’20 due to less production. Several towns, cities, and provinces in China have been locked down. China’s share of GDP at purchasing power parity accounts to 19.71% with respect to the world and, at large, this is going to impact the global economy. It is, therefore, estimated that the global GDP would suffer an impact of around 0.5%.

How is the Indian Economy Getting Affected

India’s mammoth dependence on China for imports is, largely, going to impact the Indian economy. China accounts for a significant share in most of the top 20 products that India imports from the world. According to survey reports, almost 45% of India’s total electronic imports along with 1/3rd of machinery and 2/5th of organic chemicals come from China. In terms of fertilizers and automotive parts, China’s share in India’s imports is more than 25%. Apart from all these facts, around 65% to 70% of active pharmaceutical ingredients and almost 90% of mobile phones come from China.

It can, therefore, be said that the current outbreak of coronavirus in China might have a significant impact on the Indian industry. In terms of exports, India’s 3rd largest partner accounting for around 5% share in China. The outbreak of coronavirus in China might impact the following sectors namely cotton, organic chemicals, ores, fish products, plastics, etc. Apparently, Indian companies operating from the eastern part of China also cannot be ignored. Around 72% of Indian companies are located in various cities like Beijing, Jiangsu, Shanghai, Shandong, and Guangdong province.

According to a survey report, Indian sectors that are largely going to get impacted by the outbreak of COVID-19 (Coronavirus) might include automobiles, pharmaceuticals, shipping, electronics, mobiles, and textiles. Along with these sectors, industry supply chains might also get affected. Overall, the impact of coronavirus in the industry is going to be disastrous in the long run if it is not contained. The prices of chemicals along with pharmaceuticals and electronics goods might increase by 10% due to supply-chain issues. Some commodities like metals might witness the impact of lower global demand. Now, let me discuss the sector-wise impact of COVID-19 (Coronavirus) on the Indian industry

Now, let me discuss the sector-wise impact of COVID-19 on the Indian industry

• Chemical Industry
  Consequent to the shutting down of plants in China, there would be restrictions on logistics and shipments. China is a major supplier of Indigo which is required to manufacture denim. According to a survey report, almost 20% of the production might get impacted due to such disruptions.

• Shipping Industry
  The outbreak of COVID-19 has impacted the shipping business in India and has become a nightmare for Indian cargo movement service providers. According to a survey report, the per day per vessel has declined by approximately 75%-80% in dry bulk trade.

• Auto Industry
  The impact of COVID-19 might impact the Indian auto companies and would vary depending upon the extent of the business with China. China’s business no doubt is affected. The Indian auto manufacturing might contract by 8%-10% following a shut down in China.

• Pharmaceuticals Industry
  The outbreak of COVID-19 in China would adversely affect this industry too because India relies heavily on imported drugs despite being one of the exporters of top formulations in the world.

• Textiles Industry
  The outbreak of COVID-19 in China has halted the operations of several textile factories in China that would in turn disastrously affect the exports of yarn, fabric and other raw materials from India.

• Electronics Industry
  India is largely dependent on China for the supply of electronics components for local manufacturing. The domestic electronic industry might face supply disruptions and production delays and have a negative impact on this industry too.

• Tourism and Aviation
  The government of India has suspended all visas till April 15, 2020 to prevent the spread of COVID-19. The inflow of tourists from China, East Asian nations and from across the world has reduced to a minimum, disastrously impacting the sector and its revenue.

• E-Commerce Industry
  Due to the outbreak of Coronavirus in China, brands across the globe are worrying about the impact of coronavirus on e-commerce as a whole. According to a survey report, 52% of consumers are avoiding crowds and 32% are leaving their house less often because of coronavirus. Moreover, the stock markets have become volatile.

One of the many ways to prevent the spread of COVID-19 is to maintain personal hygiene by washing hands and keeping the hands clean. Prismart Productions elaborates on the seven basic steps for washing hands and maintaining basic personal hygiene through an animated video.