China’s loss India’s gain? Indian exporters can tap these segments as China reels under Coronavirus

The impact of Coronavirus on China’s economy is highlighted in the sharp contraction in its manufacturing sector in February that hit the lowest in around two decades.

Even as the Coronavirus epidemic has hit the Chinese economy, it is for large economies like India to leverage the current situation to push its exports globally in markets that are vacated by China, according to industry body Assocham. “A large number of engineering exports from India can fill up the market vacated by China,” said Assocham Secretary General Deepak Sood, PTI reported. While Indian traders are having supply challenges as they depend on the neighbouring country for raw materials to export electronics, pharmaceuticals, speciality chemicals and automobile segments, there are multiple segments having increased opportunities for Indian exporters, according to the association.

“Products like leather and leather goods,” and “agriculture and carpets,” said Sood are the areas for India to tap on. He added that while India needs to “scale up several of our sectors” to take on effectively with China even as the exporters from China are “able to normalise their global supply chain.” To fill this market vacated by China, India needs to “approach the issue with a clear strategy,” Sood said.

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The impact of Coronavirus on China’s economy is highlighted in the sharp contraction in its manufacturing sector in February that hit the lowest in around two decades, according to the latest Purchasing Managers’ Index (PMI) data. The index went down to 35.7 per cent from 50 in January —  14.3 percentage points decrease, according to the data released by China’s National Bureau of Statistics. From the perspective of enterprise-scale, the PMIs of large, medium and small enterprises were 36.3 per cent, 35.5 per cent and 34.1 per cent, respectively, down 14.1, 14.6 and 14.5 percentage points from the previous month, it said. The deadly virus has also taken a toll on China’s employment index that declined 15.7 percentage points to 31.8 per cent from the previous month “indicating that the employment level of manufacturing enterprises has decreased,” the data said. 

On the other hand, India’s merchandise and services exports combined for April-January FY20 stood at an estimated amount of $446.46 billion — 1.94 per cent growth for the same period in the preceding year, according to a statement by the Commerce Ministry last month. Overall imports are estimated to have declined by 4.69 per cent to $510.62 billion during the said period vis-a-vis the preceding year.

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