Coronavirus infection in China will not only affect the economy of China but will also affect the economy of India and the common people. Prices of cars, smartphones, electronics, and some drugs may rise as imports are disrupted. It is also feared that holidays may be prolonged in some provinces of China due to coronavirus. If this happens, imports from China may be disrupted. This will increase the pressure on industries as well as consumers.
Fears an 8.3% decline in auto manufacturing
China is one of India’s largest automotive component suppliers. In such a situation, the Indian auto industry will have to reduce production due to a lack of ready parts in China. 10 to 30 percent of India’s auto component needs are imported from China. When it comes to the electric vehicle industry, it becomes two to three times more. Moving to other markets for imports can increase the cost of making a car. This will affect consumers. Rating agency Fitch anticipates an 8.3% decline in auto manufacturing in India in 2020.
India imports 80% of medical equipment
India imports 70% of bulk drugs and their ingredients from China. It is heavily dependent on the Chinese market for APIs (active pharmaceuticals ingredients) and some essential medicines to make medicines. The healthcare sector may also be affected if the coronavirus crisis escalates further. Due to the virus, work in most of the Chinese companies has been stopped for some time. According to experts, India is completely dependent on China for many medicines like penicillin-G. India imports 80% of medical equipment and China has a significant share in this import.
Tourism will be affected, damage to the aviation sector too
Coronavirus will also have an impact on the travel and tourism sector. 3.12% of the foreigners visiting India in 2019 were from China. There has been an increase in the number of travelers coming from China for some time. However, due to the effect of coronavirus, the number of tourists coming from China will decrease. The aviation sector of India will also be affected here. Some airlines have temporarily closed flights to China. Care ratings say that Indian airlines are losing Rs 55-72 lakh per flight due to the closure of flights to China and Hong Kong.
Fear of smartphone being expensive, sales may fall by 10% to 15%
India exports 6-8% of its electronic goods to China while 50-60% of its needs are imported from China. The impact of the shutdown of component factories in China is beginning to be seen in major smartphone companies in India. Due to supply disruptions, Xiaomi has predicted the price of smartphone components to rise. This will make phones expensive. Retailers say that the iPhone 11 and 11 Pro models imported from China are about to run out of stock. The industry believes that due to a lack of supplies from China, the production of handsets in the domestic market may stop next week. Experts estimate that smartphone sales may fall by 10–15% during the January – March quarter.
70,000 theaters closed in China, it will also hurt India’s entertainment industry
The demand for Indian films has increased in the Chinese market in recent times. Films like Dangal, 3 Idiots have received good response in China. But many films ready for release may suffer due to coronavirus. China has closed around 70,000 theaters after the outbreak of coronavirus.
Petrol-diesel will be cheaper due to a decrease in crude oil rate
China is a major importer of crude oil. However, due to the effect of coronavirus, there has been less demand for crude oil. This has led to the fifth consecutive decline in crude in the international market. Brent crude was $ 10 cheaper in a month and a half to $ 55 a barrel. Import will be cheaper for oil companies due to decreasing crude rates. This will also reduce the rates of petrol and diesel.