INSUBCONTINENT EXCLUSIVE:
By DK AggrawalThe deadly coronavirus, which has killed more than 2,600 people in China, continues to spread to Iran, South Korea, Italy and
Global markets have been hit by a major selloff, as Covid-19 spreads beyond China.
In India, infections have been relatively less, with only
a few confirmed cases till last week
And there is a logical fear among people, it is likely to hamper global growth.
Earlier too, China was badly hit by the outbreak of SARS,
but supply chain disruption was not felt much, as China used to have only 8.84 per cent share of global GDP (based on PPP) at that time
Now, the case is different.
China is much more developed and integrated with the global economy, and has a large share of global trade
Though it is difficult to predict the exact consequences of the coronavirus outbreak, but the impact across global supply chains is already
Official data suggests, China today commands almost 19.25 per cent share of global GDP (based on PPP)
reliance on China is spread across sectors such as automobile (circuit board), pharma (APIs or active pharma ingredients, appliances
components), solar power parks, rubber (chemicals), graphite electrodes, carbon black, dyes manufacturers and many more
Notably, India has decreased its dependence on China over the past five years, though only slightly.
Amid the coronavirus crisis in China,
factories and manufacturing activities across got halted for a while in China, but they are learnt to have resumed operations recently with
only 20-50 per cent workforce.
The coronavirus outbreak in China might be an opportunity for India to fill in the global shortage of
materials supplied by several Chinese companies
The global market is looking for alternatives to China in order to meet the demands and India can grab this opportunity
There is news that India has been getting queries from the EU and the US for textiles, homeware, ceramic tiles, engineering goods,
furniture, etc, seeking to replace Chinese suppliers
India is a land of skilled resources
She can take advantage of the skills available and accelerate manufacturing activity
By doing so, India can create huge job opportunities.
As the Chinese supply lines are skewed, Indian companies have an opportunity to
explore other markets to procure raw material and decrease dependence on Chinese imports if the government tweaks some of its trade policies
to bring down commodity prices.
Moreover, it is expected that the virus outbreak would pave the way for more foreign investments in emerging
countries like India, as the world looks to reduce dependence on China
And a sharp slowdown in global growth could offset some of the benefits to Indian companies, too