Just a few hours ago, Rahul Gandhi, Member of the Indian National Congress, tweeted, “No Yes Bank. Modi and his ideas have destroyed India’s economy. #NoBank.”
No Yes Bank.
Modi and his ideas have destroyed India’s economy.
— Rahul Gandhi (@RahulGandhi) March 6, 2020
Well, we aren’t going into the postmortem of Modi Government’s economic policies, but to be honest, our economy is not doing good. There are numerous stats that prove the economic slowdown. The Government has taken a slew of measures to counter the economic slowdown, but fortune also seems to be testing the Modi Govt.
We are talking about the impact of coronavirus on the Indian economy, which from nowhere suddenly appeared, and hampered the global economy.
Tanvee Gupta Jain, Economist, UBS Securities India, said, “We believe a weaker China and global growth, and disruptions along the supply chain (China share in India’s goods imports was 14% in CY19) are likely to have some adverse impact on India’s growth in the Mar-20 quarter. For instance, sectors such as electronics, pharma, automobiles, etc, could see supply disruptions in the value chain.”
Here are the top three industries which have been already witnessing the impact of coronavirus:
Given the pharmaceutical industry’s deep linkages to China, the supply chain of raw materials of drugs has taken a hit. APIs, also called bulk drugs, are significant ingredients in the manufacture of drugs. The Hubei province of China, the epicentre of the coronavirus, is the hub of the API manufacturing industry. The production facilities in Himachal Pradesh — largest pharma hub of Asia — have warned of suspension. The price of paracetamol has almost doubled since January 2020. So the pharmaceutical industry has already faced the heat of coronavirus.
The auto industry which is already seeing the worst slump in nearly two decades is facing the heat as supply chains get disrupted. China is one of the leading suppliers of auto components in India, accounting for 27 percent of the total exports. AIFI President S Muralishankar said, “The coronavirus is expected to have an impact on the Indian automotive industry and therefore also on the automobile component and forging industries, which had already reduced their production rate due to the market conditions and on account of the impending change over to BS-VI emission norms from BS-IV from April this year.”
The stock markets across the world have remained highly volatile in the last many days. Ajit Mishra, VP – Research, Religare Broking, said, “The markets would continue to track the global indices which are under stress as Coronavirus is expected to adversely impact global supply chains. There are reports that US GDP growth will slow down considerably in Q1CY20, while fears of a recession are impacting European markets.”
Taking into account statistics and experts’ opinions, it seems like it will be hard for the Indian economy to remain insulated from the hit of coronavirus.