COVID- 19 Impact on Businesses

The novel Coronavirus is leaning dangerously as more than 4 million people have been infected so far. Nearly 162 countries are in lockdown and businesses across the globe is severely hampering the Economy. The globe is in the fear of the imminent collapse of the global financial Market. But India is facing an extremely volatile market condition. Let’s understand how the coronavirus is impacting the business and economy of India.

COVID19 Impact on Various Sectors in India

The novel coronavirus is creating tremors down in Indian markets relying on China for imports. From 15 March 2020 to 19 April 2020, there is a 6.7% to 26% of unemployment rise within a month. During the lockdown, an estimated 14 crore people have lost their jobs. More than 45% of households have faced an Income drop as compared to the previous year.

Raw Materials and Spare Parts

If we take a glance on the electronic imported products, then there is a 15% slid down. Nearly 55% of electronic products are imported from China and during this lockdown, it has cut down to 40%. Now, India is considering the promotion of natural products to reduce the dependency on a single market.

China is the third-largest export partner of Raw Materials such as mineral fuels, cotton, organic chemicals etc. The lockdown of countries is likely to lead an abundant trade shortfall for India

Pharmaceuticals

The pharmaceutical Industry is a significant concern for India, mainly 70% of active pharmaceuticals components are imported from China. The imported pharmaceuticals components are important for the numerous pharma companies in India. Currently, COVID 19 is rapidly augmenting in India so medication is going to be the number one consumer demand. But, the market is witnessing as skyrocketing prices as the price of vitamins and penicillin alone has a 50% surge.

Tourism

Undoubtedly India is a big cultural and historical tourism destination. It attracts domestic as well as foreign nationals throughout the year. But, with the suspension of visas and tourist attractions the whole tourism Value Chain has affected. Due to this, many hotels, restaurants, tourists agents and operators have faced a massive loss worth of Rs. 15000 crores.

Aviation

Since the government of India suspense, the tourist visas airlines are bearing pressure. Almost 690 airlines have been cancelled in which 600 are international flights and 90 domestic flights this has led a sharp drop in the airline fares.

Manufacturing

Major companies in India are significantly suspended or reduced operations across the country. The companies include Larsen and Toubro, Bharat Forge, UltraTech Cement, Grasim Industries, Aditya Birla Group, Tata Motors and so on. Two-wheeler and four-wheeler companies have stopped the production and remained as closed until further notice.

E-commerce

Amazon has announced that it will stop the sale of the non-essential item in India. Big baskets and Grofers are running on restricted services facing interruptions in the services during the lockdown. E-commerce also took a step for legal charity for what is essential.

Stock Markets

Stock Market in India has recorded the worst losses in history. On 23 March 2020, the Sensex fell 4000 points (13.15%) and NSE Nifty fell 1150 points (12.98%). Right after the lockdown was officially announced the SENSEX has posted its biggest gains in 11 years with the whopping value of Rs. 4.7 lakh crore ( US $66 billion) for investors. Again the stock market in India has risen steeply and by 29 April NIFTY held the 9500 marks.

Estimated Economic Losses

During the 21 days of lockdown, Indian witnessed a loss over Rs. 32,000 crores every day. Fitch Ratings said the estimated growth of India up to 2%, India’s Ratings & Research downgraded the estimated growth for the FY 21 to 3.6%. On 12 April 2020, the World Bank focused on South Asia and shared a view that India’s economy is anticipated to grow to 1.5% to 2.8% for FY21. This downfall has marked the lowest growth for Indian in 30 years.

Subsequently, Confederation of Indian Industry has estimated India’s GDP FY 21 between 0.9% to 1.5%. On 28 April Chief Economic Advisor has said to the government that India should prepare for a negative consequence for the growth rate in FY21.

Conclusion

The novel coronavirus has impacted the global economy every country has become the victim of the virus. With losses of thousands of crores, every other country needs to boost the economy in the coming days.