Image Courtesy- orfonline.com
The impact of COVID-19 on the Indian economy is explained after gathering data from various research reports and news sources.
Since last year when there was the first outbreak of novel coronavirus (COVID-19) in Wuhan, China, the world has changed in many ways. Excluding the devastating effects of the pandemics, the death toll and struggling healthcare systems which the virus has left the economies worldwide staggering and even drowning in many parts of the world. the lockdowns have hugely impacted the supply-chain management and sent the GDP (Gross Domestic Product) and import-export cycle plummeting. This is the worst recession after the Great Depression in the 1930s. Now we will tell you parts of the Indian economy that were highly impacted by the COVID-19.
1. Aviation and Tourism
This is one of the biggest hit industries. It also has a high probability of suffering most from the recession without direct intervention from the government. As of now due to the pandemic, people are unlikely to travel for leisure for months to come, which will impact the inflow of tourists in all countries drastically reducing the money flow in this sector.
2. Restaurant services
The National Restaurant Association of India (NRAI) that represented the majority of Indian restaurants had advised its members to shut down their dine-in-services as soon as lockdown began which majorly impacted the restaurants, pubs, cafes, and also food delivery platforms such as Swiggy and Zomato which faced a drop of 60% in its revenue.
3. Raw materials and Electronic parts
Mainly, 55% of electronics which is imported by India originate from China. These imports have fallen to 40% due to the pandemic and hence Indian government came up with the promotion of Atmenirbhar or indigenous production in a bid to reduce dependency. The lockdown has also resulted in reducing in exports of raw materials like organic chemicals, cotton, mineral fuels which are resulting in a substantial trade deficit for India.
4. Pharmaceutical Industry
Along with a major percentage of Active Pharmaceutical Ingredients (API) which is imported from China, the economic toll on this industry is of major concern. As the rapid speed of COVID spread, the demand for medication has become primary with a major reduction in the import of APIs adversely affects the manufacturing of drugs which will ultimately lead to a surge in drug prices.
5. Auto Sector
The cause of falling demands, income levels and global recession, the manufacturing of auto parts and automobiles have taken a major hit. Due to the continuation of lockdown, there might be a downward slide in the auto sector.
6. Textile Industry
As the operations of textile factories in China were halted, the export of raw materials such as cotton, other fabric, yarn from India has been majorly affected. The unavailability of raw material led to depletion in the workforce and working capital constraints which has resulted in reduced demands and purchasing capacities.
7. IT Industry
As the IT sector is dependent on many of the above-mentioned sectors such as manufacturing, retail, hospitality, communication, etc. has resulted in major impacts on purchasing ability and investing patterns on IT services. All this has impacted the requirement of an additional workforce and inflow of revenue in this sector.