|Demand of the question Introduction. Contextual introduction. Body. Discuss the impact of the corona-Virus epidemic on Indian economy. Conclusion. Way forward.|
Recent coronavirus outbreak has had far reaching consequences on the global economy beyond the disease. Moody’s Investor Services has lowered its growth forecast for the Asia-Pacific region to 5.2% for 2020 due to coronavirus outbreak, the impact of which will be more pronounced on China and India. In India, the near-term impact will be felt in supply chains of major conglomerates, especially pharmaceuticals, automobiles and electronics.
Impact of the corona-Virus epidemic on Indian economy:
|Overall economy||Sector Wise Impact|
|Imports: In the latest assessment, credit agency CRISIL’s has revealed that novel coronavirus is going to hit the Indian imports if it continues to the first quarter of next fiscal. India is a net importer of China with 56 billion dollars.||Electronics industry: Shutdown of factories in China due to coronavirus is expected to negatively impact the electronics industry in India as Indian players currently do not have the capability to manufacture such semiconductors and components in the short term.|
|Exports: If the virus epidemic continues for a longer period, Indian export to China would also get hit, especially in the area like petrochemicals. India exports 34% of its total petrochemicals to China.||Poultry industry: The scare of COVID-19 and spread of rumours on social media linking chicken to the deadly virus has taken a huge toll on the unsuspecting poultry industry and farmers. Chicken consumption has come down by about 30%, leaving the poultry industry and farmers worried.|
|Inflation: Inflationary pressures are likely to rise, at least in the short term, due to the environment of uncertainty and disruption in the supply chain.||Tourism industry: The travel and tourism sector will be affected badly. Most of the Chinese citizens are avid travellers, hence the tourism in other countries might feel the ripple effect.|
|Lesser demand: Commodities like metals, upstream and downstream oil companies, could witness the impact of lower global demand impacting commodity prices.||Pharmaceuticals: Bulk drugs and drug intermediates accounted for 3% of India’s imports from China. According to the Trade Promotion Council of India, approximately 85% of active pharmaceutical ingredients (APIs) imported by Indian companies are from China. India’s overdependence on China for APIs exposes it to raw material supply disruption and price volatility.|
The coronavirus outbreak is not good for the global and Indian economy. India is already undergoing economic slowdown with rise in inflation. There is a need for collaborative efforts to tackle the impact of the epidemic. India must ensure minimal impact of epidemic on its economy.