Coronavirus outbreak: FinMin says Indian macroeconomic outlook vulnerable to disruption of trade with China

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Published: March 16, 2020 5:25:22 PM

Indian Missions abroad have been asked to explore alternative sources of supply of raw materials in their respective countries for supporting India's domestic production.

coronavirus, coronavirus outbreakThe coronavirus outbreak, first in China and now having being confirmed in more than 100 countries, has emerged as a key risk to human health as well as global growth outlook.

The government on Monday said India’s near-term macroeconomic outlook is vulnerable to disruption of trade with China due to the coronavirus outbreak but the latest data do not suggest any adverse impact on the economy, and sliding crude oil prices may be a silver lining.

The coronavirus outbreak, first in China and now having being confirmed in more than 100 countries, has emerged as a key risk to human health as well as global growth outlook through numerous channels like trade, production and supply chain disruptions as well as decline in demand.

This was stated by Minister of State for Finance Anurag Thakur in a written reply to a question in the Lok Sabha.

“As is true for the world at large, India’s near-term macroeconomic outlook is also vulnerable to disruption of trade with China and second-round effects arising from expected slowdown in global growth,” he said.

However, the latest available data on trade and domestic output indicators do not suggest any adverse impact on the economy, the minister said.

“Additionally, a positive impact on India’s economy may arise from decline in global oil prices triggered by the outbreak of COVID-19,” Thakur added.

He told the House that the Ministry of Health and Family Welfare has been coordinating the efforts of the central government in terms of preparedness, control and containment measures and working with state governments in order to mitigate the impact of the virus outbreak in India.

In order to address the possibility of trade-induced adverse impact on the economy, the government is constantly engaging with export promotion councils and trade bodies, particularly in pharmaceutical, electronics and automobile sectors where the supply chains are sourcing imports from China.

These agencies, Thakur said, have been put in touch with Indian Missions abroad to secure and transport inventories available with the existing suppliers.

Indian Missions abroad have also been asked to explore alternative sources of supply of raw materials in their respective countries for supporting India’s domestic production.

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