Coronavirus has killed more than 350 people in China. Confirmed cases of the virus have been reported from Hong Kong, Australia, Thailand, France, Japan, Taiwan, Vietnam, Singapore, South Korea, Macao, and Nepal.
In this report, we are trying to find out Coronavirus’s impact on the Indian economy, manufacturing, and non-manufacturing industries, import-export industries, and IT industries.
According to a India Today report, India imports electronics, consumer durables, and auto components and pharma bulk drugs. About 18% of India’s merchandise is being imported from China. India is highly dependent on China for electronics components and consumer durables. About 67% of electronic components and 45% of consumer durables are imported from China.
If the virus epidemic continues for a more extended period, Indian export to China would also get hit, especially in the area like petrochemicals. India exports 34% of its total petrochemicals to China.
India’s top IT firms have a fairly large presence in China. Tata Consultancy Services (TCS) ranks among the top outsourcing firms in mainland China, while India’s second-largest IT services company, Infosys, opened its first overseas centre in Guizhou province in 2015. Wipro and HCL are also present in China.
According to Livemint report, many global companies have suspended operations in China in the wake of the outbreak, Indian industries said they have so far managed to scrape through by asking employees to work from home or remotely from other locations.
“The IT sector may see some indirect impact in the medium to long-term as some of the clients have exposure to manufacturing in China,” said Pravin Rao, NASSCOM vice-chairman, as well as chief operating officer Infosys.
Antoine Imbert, Chief operating officer of Capgemini in India said, “We don’t see a big impact at this stage across global operations but we are analyzing our business continuity plans to see if more employees need to work from home. We have flexible work policies that can be leveraged in case we need it but there has been no need to take any specific actions right now. APAC is overall 5-7% of overall revenue so China is present.”
“Shutdown of factories in China due to n-CoV is expected to negatively impact the electronics industry in India as Indian players currently do not have the capability to manufacture such semiconductors and components in the short term, though some parts are sourced from Japan, South Korea, Taiwan, and Germany, among others,” rating agency CRISIL said in latest assessment report on coronavirus.
The impact on the IT industry has been negligible so far, but according to NASSCOM’s senior director for global trade development Gagan Sabharwal “the overall economic impact will be huge for China.”
According to a Economic Times report, The coronavirus outbreak has brought a large part of the world’s second-largest economy China to a standstill and its impact has been felt across industries. On January 30, the World Health Organization (WHO) declared the coronavirus (COVID-19) outbreak a global health emergency. The impact on India is felt through supply chain disruptions from China as well as regional players, who in turn are net importers from China.
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