Impact of Coronavirus on Indian Economy
Coronavirus (COVID-19) is an infectious disease which has emerged in Wuhan city of China in December 2019. This deadly virus is a contagious disease and spreads from person to person. Today a major portion of world is suffering adversely due to this disease. It has infected close to 29 million people and claimed more than 9,32,000 lives around the globe. The COVID-19 outbreak is declared as a pandemic by WHO. Fever, dry cough and breathing problems are major symptoms of this disease.
There is no vaccine available till now for this virus only prevention like washing hands frequently, wearing mask, maintaining social distance, covering mouth while coughing etc. can help in preventing it from spreading among people.
All economies of the world are going through a difficult phase due to this pandemic. It has made all countries to a standstill for avoiding its spread due to which they are suffering huge losses. India’s economy which accounts for almost 7.45 % of world GDP is affected adversely. The country is experiencing lockdown from March 22 to May 31, 2020. It has resulted in a complete stoppage of all economic activities around the country.
All sectors like agriculture, transportation, education, corporate, banking, tourism, and industry are all going through huge losses which is quite dangerous for an Indian economy. Barclays, a British investment bank has estimated an economic loss of around $234.4 billion or 8.1 % of GDP for India. Also, it has forecasted an Indian GDP equal to zero for the year 2020.
Indian GDP in quarter 1 of 2020-2021 is contraction by 23.9%. Every sector experience of contraction except agriculture.
Impact on various parts of the Indian economy
Impact on various parts of the Indian economy is well explained in the points given below:-
Impact of Coronavirus on Tourism Industry
The tourism industry contributes nearly 7% to India’s GDP. As per data, this generated 4.2 crore jobs in 2019 which accounts for 8.1% of total employment in the country. But due to the spread of coronavirus, the tourism sector is going through the recession phase.
All international flights and visas are suspended in view of this virus which has massively hit this sector. The whole tourism value chain comprising of restaurants, agents, and transportation agencies are adversely affected and are expected to suffer losses of thousands of crores. According to experts, this sector is going to face job cut of 4-5 crore and loss of 5 lakh crores.
Impact of Coronavirus on Agricultural Sector
The agricultural sector is another adversely affected area of the Indian economy. It is the primary sector of the economy which contributes 17% of India’s GDP and generates employment for 53% of the population.
Due to nationwide lockdown, farmers are not getting machinery or labor for harvesting their crops. They are not able to supply their production timely to the market due to logistics problem and their products are getting wasted. All businesses under this sector such as dairy, tea, coffee, rubber plantation are suffering huge losses. Tea industries are expecting a huge fall due to a drop of 8% in exports.
Impact of Coronavirus on Pharmaceuticals Industry
This is one of the largest industry which ranks fourth in the world. The pharmaceutical industry plays an efficient role in India’s GDP as it caters the need of around 20% to 24% of global generic drugs. The Indian pharma industry is one of the top drug exporter in world and generates large revenue.
Due to the corona outbreak, this area is adversely impacted. This industry relies on importing raw materials from other countries. Nearly 70% of ingredients for this industry are imported from China. But at present, all international borders and logistics services are closed as a preventive measure against this pandemic. Pharmaceuticals are not getting the required inputs for fulfilling the prevailing demand around the globe arising out due to viruses. As a result of which prices of medicines like penicillin and vitamin tablets have gone up by 50%.
Impact of Coronavirus on Auto Industry
The Indian automobile industry is one the largest industry contributing impressively to the economy. It is the fourth-largest auto market as per 2018 data. A large section of the Indian population is employed in this industry. The auto industry is going through a bad scenario at present. Due to lockdown, all operations of this industry are suspended in countrywide offices and manufacturing plant.
India automotive industry imports for about 27% of auto parts from China. But due to this pandemic, all factories are closed in china which is disrupting the supply chain and production has almost halted. As per the sources, it is estimated that this industry will suffer a loss of about 13000 crore to 15000 crores due to coronavirus.
Impact of Coronavirus on Textile Industry
It is one of the oldest industries of India and contributes approximately 11% of total exports from India. It provides employment to almost 40 million peoples directly and 60 million peoples indirectly. Under the current scenario, the industry has come to standstill.
There is a great decline in demand for products as all exports of this industry have stopped. China imports a wide variety of textile products from India which has declined at present due to this virus outbreak. Also, there is a wide decline in domestic demand due to the closure of malls, markets, and online shopping platforms. The textile industry may face a loss of about 12000 crore due to coronavirus.
Impact of Coronavirus on Financial Market
The financial market is another major area of the Indian economy. It has a great role in shaping the fortune of the economy. Indian financial market is massively hit due to coronavirus outbreak as compared to other nations including china where this virus originated.
The stock market of India lost around 26 points in the dollar between February 1 and April 9. Indian stock market is facing a deep decline due to which investor’s sentiments are low. In addition to its rupee value in terms of the dollar is decreasing to its lowest.
Impact of Coronavirus on E-Commerce market
The E-commerce market is one of the fastest-growing markets in the Indian economy. This market is expected to reach a size of USD 300 billion and will contribute almost 2.5% of India’s GDP by 2030. Amazon and Flipkart are two major plays in the Indian e-commerce market. Coronavirus has badly affected the operations of this market.
Under the current scenario, due to the unavailability of logistics services this market is not able to deliver its orders and also not accepting any orders from customers. Major players like Amazon, Flipkart, BigBasket, Paytm mall, etc. have suspended their operations from March 25 due to restrictions being imposed during lockdown by the authority to avoid the spread of this virus.