Here’s How COVID-19 is Impacting the Indian Economy

As per the UN conference, the coronavirus outbreak may affect the global economy by $1-2 trillion in the current year.
  • BY Jaspreet Kaur

    Feature Writer, BusinessEx

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  • Mar 19,2020
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  • 7 Mins Read

Recently, the World Health Organisation (WHO) has termed Coronavirus as pandemic. As this deadly disease is spreading across the globe, its immediate effects are not only visible on afflicted people but also on the global economy as a whole. As per the UN conference, the coronavirus outbreak might cost the global economy $1-2 trillion in 2020, reported The Economic Times. 

As part of its efforts to stop the spread of Covid-19, India on March 12 suspended almost all visas for a month, adding to the woes of airlines. As of March 6, Indian private carriers had cancelled 93 international flights and global airlines 492 flights, according to data shared by the government in the Lok Sabha. With the number of Covid-19 cases in India increasing two and a half times over the past week to 84, travellers might be hesitant to even fly within the country, according to the report of the cited media agency.

With several companies restricting all but essential travel, business hotels in major cities could be left with a lot of empty rooms. Kapil Chopra, founder and CEO of Postcard Hotels & Resorts, says average occupancy in these hotels could fall from 70-75% to 20%, if they haven’t already, even as demand in holiday destinations continues to be strong, reported the cited media agency.

How Consumer Durables Businesses are Suffering 

India’s consumer durables industry is heaving a sigh of relief as factories in China resume operations after Covid-19 cases taper off in the country. But as India grapples with a rising incidence of the disease, visits to stores might dwindle due to a fear of being exposed to the virus in public spaces, says Kamal Nandi, president of the Consumer Electronics and Appliance Manufacturers Association. This would hurt demand. This would hurt demand. India imports around 45% of its consumer durables from China, according to CRISIL.

India also relies heavily on China for components like compressors for air conditioners and open cell TV panels.

Similarly, mobile handset shipments to India are also likely to be hit by the supply disruption in China. According to Counterpoint Research, there could be a 15% fall in mobile shipments in the January-March quarter, from the corresponding period of 2019, and and there could be a similar impact in the next three months.

 

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