As coronavirus cases spread worldwide, small business owners are experiencing early consequences, such as supply chain disputes and lost sales. A startling new wave is awaiting for countries like India and Africa, with the least configured or effective health systems, to try to prevent the spread of the virus from Iran, China, and Italy.
Not least of all, as demonstrated by the ravaged stock market, businesses are now feeling the pressure.
Coronavirus – Not a minor concern
New data from the National Federation of Independent Businesses implies that current implications may be small, but there is a great deal of concern. Right now, the virus is upsetting the economy in multiple areas. Policy responses to disease spreading have shuttered factories abroad and halted supply chains for domestic manufacturers. Travel prohibitions and self-imposed social taboos disrupt travel, in particular air transportation, gatherings, and hospitality. States and localities that rely more on manufacturing, tourism and business travel are likely to have wider consequences than others.
Tourism and Supply Chain Industry – The most affected
The tourism industry has seen a strong crisis, which could escalate in the following weeks. The hospitality industry will also bear the burden of reduced travel costs. Decreased demand, travel restrictions and other constraints meant to limit growth have a hazardous effect on the economy India is the 10th highly affected economy due to supply chain fluctuations in China, according to UNCTAD estimates. Moody’s Lenders Service had said Covid-19 is expected to reduce global growth below the 2.5% contraction level for the world economy by 2020.
With the World Health Organization (1) announcing Europe the new epitome of the Covid-19 epidemic, exported goods to the European Union, India’s main export destination, are expected to be hindered. We may assume that considering the current occurrence of coronavirus in China, import reliance on China would have a major effect on the Indian industry. China is a leading supplier of Indigo needed for denim. Company in India is likely to be influenced so that people can protect their supplies. This is, however, an incentive. The US and the EU will continue to expand their markets. Any of the companies can be redirected to India, which can also be seen as an advantage. Although being one of the largest drug exporters in the world, India’s pharmaceutical industry depends heavily on imports as an excess commodity. It will also be affected by the coronavirus outbreak.
India’s business with China
The influence on Indian companies will differ and will rely on the severity of the business with China. There is no question that China’s industry is affected. Nevertheless, the existing rates of inventory tend to be adequate for the Indian industry. If the shutdown in China persists, it is expected to result in an 8-10 percent contraction of Indian automotive manufacturing by 2020. Due to the outbreak of coronavirus, many clothing/textile industries in China have frozen operations which, in effect, have affected exports of fabric, yarn and other raw materials from India. China is a leading supplier of electronics as a finished product or feedstock used in the electronics industry. India’s electronics industry might experience disturbances in supply, manufacturing, and reductions in product prices as a result of heavy reliance on the direct or indirect supply of electronic parts and domestic manufacturing.
The spread of COVID-19 has had an impact on the planet and has been felt through industries. China’s second-largest economy in the world has been stalled. The epidemic is considered a national emergency by the World Health Organization. In India, the effect can be felt as a result of disturbances to the supply chain from China and also as regional powers purchasing from China.