With the Chinese economy facing headwinds of coronavirus scare, India stands to lose billions of dollars in exports to the dragon nation.
With the Chinese economy facing headwinds of coronavirus scare, India stands to lose billions of dollars in exports to the dragon nation. India is staring at a major fall in exports if China’s economy remains shut down for a year. “Considering that total exports in FY20 remain at the same level as FY19 and based on our earlier stated assumption of 80% loss in Indian exports to China, the total export loss would be around $13.4 billion,” a CARE Ratings report said on Friday. India is not only a major importer of Chinese goods but also sends its own goods to the country. India exported goods worth $16.7 billion to China in FY19. China exports from India witnessed a CAGR growth of about 28% between FY17 and FY19.
The overall trade impact to India will be considerable due to coronavirus as the country also imports key raw materials for major industries and some other finished goods as well. The imports have been on a standstill as China faced the coronavirus outbreak and the same had rung alarm bells as the production could also come to a halt as supplies are drying up. Earlier, trade body CAIT had also raised concerns about the same. “All exports have been completely stopped and it is apprehended that it may cause substantial disruption in the supply chain of the country,” it said last week.
While finding an alternative to China supplies might appear a good solution, there are certain industries such as pharma and electronics where alternates are minimum. Other sectors such as tourism and software are also facing heat.
Meanwhile, India today witnessed a bloodbath as Sensex was down by over 1,100 points. At the end of the day, Sensex closed 1,440 points down on Friday. The virus, which originated in the Wuhan city of Hubei province, has already claimed over 2,700 lives and has left virtually no continent untouched where cases have not been reported.