There are several ways in which the coronavirus outbreak in China has consequences for the Indian economy, directly and indirectly.
One, the lockdowns in Chinese cities – many of which are economic hubs with populations and GDPs equivalent to small countries – affects production and supply worldwide given how integrated China is into the global economy. India is likely to suffer, too – more than half of India’s imports in 19 categories come from China according to a State Bank of India report and 14% of its overall imports. One of India’s top export sectors, pharmaceuticals, for example, depends heavily for key starting material, intermediates and active pharma ingredients from China.
Both the pharma sector and the Indian economy in general have faced a tough year and were only just beginning to show signs of recovery which are now likely to be delayed due to the outbreak in China. The spread of the coronavirus is pushing the world economy toward its worst performance since the 2008 financial crisis. And while the Indian government has declared itself ready with steps to ameliorate the effects on domestic industry, its record so far is not encouraging. (more…)