Indian economy is seeing it’s most challenging time due to widespread COVID-19. India is likely to witness GDP growth fall below 3% since now the lock-down is extended for a longer period of time. Immediate impact could be seen on consumption sector with disruption of urban activity on which consumption of non-essential products is dependent. Initial 21 days lock-down which is now extended till May 3rd could lead to disruption of domestic supply chain of even essential goods especially in rural area though relaxation will be given selectively on changing scenario.
Supply chain restrictions and expected labour migration could bring more challenges for recovery of petrochemical industry. The petrochemical prices to remain low on the account of low crude oil prices and there will be cascading impact on petrochemicals and along with uncertain global and domestic demand.
Among major sectors
Textile industry & apparel production is one of the sectors which can see the fall of the production by 10-12 per cent in April- June quarter of 2020-21 FY.
In the automotive sector where it is mostly depend on import from China which accounts for 27% of automotive parts may get costlier due to global supply chain disruption. Auto parts makers such as as Robert Bosch GmbH, Valeo AS and ZF Friedrichshafen AG have factories located in the Huabei province has not started its operations fully to cater the global demand due to which Indian automotive market can see a slowdown.
However Indian automotive market will recover soon from this slowdown from medium to long term as an alternative source of supply.
The housing sector can see a very weak demand due to decreased new launches and non-availability of labour due to migration of workers going back to their respective states.
Indian tourism & hospitality sector will be one of the worst affected due this which could see a job loss of 38 million which is about 70 per cent of total workforce. People will not like to travel until necessary and stay in hotels where who know who stayed there before them, this will pop in the mind of the people.
According to Indian exhibition experts the sector has lost around Rs 3750 crore due to COVID-19 lock-down imposed in entire country. The size of Indian exhibition industry is 23,800 crore with more than 550 events conducted in entire country in the organised sector. The trade and exhibition sector is a colossal employment provider of around 1,20,000 people with trade and business transaction over Rs 3,00,000 crore. It is also generates trade order from different countries worth Rs 6,000 crore.
Well there are industries which are performing well during national health emergency are Pharma, medical, health equipment and digital companies and have seen the jump in their recent performance.
The companies associated with digital entertainment, work and office system and some logistic supply will do well. An industry expert said sectors like transportation, storage, warehousing would come back to normalcy once the lock- down is lifted, and those which would not bounce back anytime soon, are those which depend on people’s behavior like travel, staying in hotels so companies like OYO will face the burnt, flying overseas and going to shopping malls, for example.