Effect and Impact of Coronavirus on Indian Economy

The coronavirus has a breakout in China and other parts of the world. After the first confirmed Coronavirus case in Kerala on January 30, now, it is spreading whole over India states including Bangalore, Pune, Delhi, Hyderabad, J& K, etc. Moreover, The World Health Organization (WHO) has dealers the rapidly spreading Coronavirus or Covid – 19 as “Pandemic”. 

Considering the number of people affected through Coronavirus, In India, more than 70 cases have been confirmed. Not only has the human being, the effect been seen on the businesses. On March 12, 2020, The government had to take the step of shutting down schools, malls, Cinema halls and even the postponement of major events. Not only are these, but companies like PayTM also compelled to allow their employees to work from home after finding the one positive case of Coronavirus in their office.

There is no doubt that Coronavirus has a direct and indirect impact of coronavirus on the Indian Economy. Countries across the world including India and the US are continuously imposing various restrictions like the Cancellation of Visa, Flights, and travel, which is consequently resulting in Global Recession and lowering down the GDP.

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Impact of Coronavirus

Direct Impact of Coronavirus on Indian Economy

Hygiene products have become very expensive:

The direct effect of coronavirus can be seen on Hygiene products such as Mouth masks, sanitizers, etc. The masks are currently selling t the rate of Rs. 499 up to Rs. 1000. Moreover, there are also shortages of such hygiene products in India due to which the health care sector in India is suffering a lot.

The sudden drop in the Airfare, and meat prices:

The air tickets are selling at cheap prices despite the fact of the holiday season. Moreover, due to coronavirus, the sales of eggs, chicken, meat and other non-vegetarian items are considerably cut down. The vice-chairman of the All India Poultry Breeders Association said that “The poultry industry in India has lost 1,100 crores every week or about Rs 160 crore every day”.

Medicines and health care costs are increased:

China is one of the most dependent countries for raw materials to prepare medicines. The restriction on imports from China is making it difficult for the pharmaceutical sector and compelling them to increase the cost of medicines.

Smartphone and electronics sales are highly affected:

India is highly dependent on China for the large supply of critical components used for manufacturing the electronic items especially Mobile Phones and home appliances. Furthermore, due to the non-availability of these, it is expected to increase in the prices of electronic products.

Impact of Coronavirus on Indian Economy

China is considered one of the major countries globally in terms of Import and Export and the outbreak of COVID-19 in China has a significant impact on the Indian economy as well. The economic slowdown, supply chain disruption, Restrictions on trade, commodities, and logistics are the few major factors that are creating a panic in the Indian Economy. The current situations are revealing that the Indian Trade, of around 348 million dollars has been affected due to Coronavirus. 

Moreover, “The United Nations Conference on Trade and Development (UNCTAD) has published its report stating that the slowdown of manufacturing in China due to the coronavirus (COVID-19) outbreak is disrupting world trade and could result in a 50 billion dollar decrease in exports across global value chains”

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Impact of coronavirus on India’s trade with China

With China under lockdown, Indian Trade is highly affected in various industries including pharmaceuticals, electronics, mobiles, and auto parts. Furthermore, the Indian economy mostly imports from its northern neighbor that is China.

Impact of Coronavirus on Indian Economy

Import statistics of India from China

  • The highly dependent active pharmaceutical ingredients are imported from China around 65 to 70% and almost two-fifths of organic chemicals
  • The electronic sector of India is an account for 45% and around 90% of certain mobile phones imported from China to India.
  • Around one-third portion of machinery, components are imported from China
  • For automotive parts and fertilizers, there is more than 25% importation.

Therefore, the statistics are revealing that all the major sectors of India are getting affected due to the current outbreak of coronavirus in China.

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Export statistics of China from India

After the US and UAE, China is the biggest exporter in India.

  • Goods worth $90.4bn are exported to India In 2018 by China, which is near 14.63% of the exports.
  • Earlier in 2017, the top five items which include telecom instruments, electronics components, machinery, organic chemicals, computer hardware and peripherals were imported by India, which were 46% of the imports from China.

Let us have a look at the sector-wise impact on Major Indian industry

It has been seen that some sectors of India have been highly impacted due to their dependency on China and Coronavirus such as shipping, pharmaceuticals, chemicals, Travel and Tourism, automobiles, mobiles, electronics, textiles, etc.

Pharmaceuticals Industry:

India is considered one of the top drug exporters in India, However, the pharma industry heavily relies on the import of raw material as a bulk drug from China. Bulk drugs and drug intermediates amounting to $1.5bn, which is around 3% of India’s imports from China. Due to COVID- 19, the imports have been restricted from China which has a huge impact on the Indian Pharmaceuticals Industry. Therefore, India’s overdependence on China for active pharmaceutical ingredients (APIs) is the main cause of disruption of raw material supply and price volatility. 

Chemical Industry:

The restrictions on shipments and shut down of chemical plants to have disrupted the supply of raw material from China. It was found that 20% of the production has been impacted due to the shortage in the supply of raw material from China. China is a major supplier of Indigo which is used for denim. However, it is an opportunity for the US and EU to divert their business to India and can take benefit.

Tourism and Aviation:

Restrictions on Visa, traveling, and cancellation of flights due to the coronavirus outbreak has reduced the tourists from China and from other East Asian regions to India. The revenue of travel and tourism has been affected adversely in India. Despite the holiday season, the Airport Authorities are compelled to sell the tickets at the cheaper rates.  

Textiles Industry:

China’s garments/textile factories have shut down their operations, which have consequently reduced their exports of textile-like fabric, and other raw materials to India.

Electronics Industry:

The major supplier of India in the field of Electronic industry is China. Whether it’s a Final product being a mobile phone or the raw material used in the manufacturing of electronic items, India’s electronic industries are facing problems.  Disruptions, production, reduction or sudden hike impact on product prices are directly or indirectly affecting the Indian market.

So, now you may have come to know about the impact of Coronavirus on the Indian Economy.

Is Coronavirus can be seen as an opportunity for India?

Coronavirus has put down a pause from the imports from China but not from India. The global buyers, mostly from the US and European Union are exploring the Indian market for fashion, Lifestyle, household, furniture, and such other products.

Moreover, the continuous number of inquiries from Indian manufacturers and exporters could be an opportunity for India to replace China as a supplier. So, the Coronavirus outbreak can be a threat as well as an opportunity for the Indian Economy.


Whether the Indian economy fall is actually due to the panic of Coronavirus or some other internal distracting factors, the Indian economy is suffering a lot. Furthermore, due to continuous coronavirus worsen situations also predicting the further slow of the economy of India. On the other side, some believe it as a great opportunity for India to scale up their game.

However, India might found it’s other importing options apart from China but the fight from the Coronavirus should be a priority.

So, let’s be prepared to fight Coronavirus and follow the preventative measures against Coronavirus.

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