The coronavirus outbreak, which originated in China in December 2019, has infected tens of thousands of people across the globe and has badly shaken the world economy. Its consequences have left industries and businesses around the world including India in tremendous loss.
Here are the chronology and key breakdown to help you understand the impact on Indian Economy and Agro industries.
India’s Agri scenario
India is an agrarian country where the agriculture sector is considered as the backbone of its economy. Since the era of Indus Valley Civilization, agriculture has been the part and parcel of Indian life and culture. A new phase was introduced with the Green Revolution in the field of agriculture after 1960 where the country reached into a self –sufficient mode of production with a good number of exports and imports with foreign countries.
China: World's Largest Exporter
Until the greatest tragedy of the Corona Virus breaks into China’s Wuhan province, China has been ruling the world’s Agro-industry as the largest exporter to the rest of the countries. Moreover, China has been playing the role of the world's largest exporter and second-largest importer.
As per reports, 48 Cities and 4 provinces of China are in lockdown mode. China accounts for 13 percent of the world's total exports and 11 percent of the total imports. The lockdown has affected 500 million people in China, severely affecting the consumption of goods. China's oil consumption is estimated to fall by 30 percent due to the coronavirus outbreak.
This lockdown not only severely affects the native’s economy but leaves an unbearable loss to the rest of the countries which are dependent and interlinked with China’s economy.
Indian Companies that Rely on China’s Raw Material are in Deep Crisis
Highlighting the crisis, the Confederation of Indian Industry (CII) said, "Indian companies that seek products from China or export goods from India to China are in danger of not fulfilling their obligations."
What’s the Aftermath of Corona Outbreak across the Globe?
The coronavirus has taken the form of a global epidemic. The virus spread throughout China from the city of Buhon, the center of the coronavirus, and now it has spread its infection to about 60 countries and has infected about 80 thousand people.
Corona Virus Likely to Hit India’s Socio-Economic Scenario
Some cases of coronavirus are also found in India, but it is still in a controlled condition. The coronavirus has had a very negative impact on the entire global economy as China is a leading country in the field of imports in the manufacturing sector. This virus has also affected the economy of India where China has been playing the role of a major trading partner.
Coronavirus Impact on Indian Farmers and their Produce
Coronavirus along with import-export, and manufacturing, is slowly impacting Indian agriculture and moreover every industry. The virus has a huge negative impact on agricultural products imported into India. As it is prone to spread the virus easily, it decreased the imports by India where the raw material exports have fallen by 1.6%. Commodities exported by India include cotton, jute, organic chemical, pharmaceutical and horticultural products like Soyabean, tobacco, fruits, maize, etc.
Export of Indian Goods is Likely to Increase
The export of Indian goods is likely to increase due to the imposition of import duty on these items by the US. Concessions and incentive programs have been announced by the government to promote agricultural exports, which will surely reach the agricultural exports, says, expert.
To boost agricultural exports, the government needs to focus more on the food-processing industry, thereby achieving India's 2.2% target in global agricultural exports.
From the point of view of imports, various agricultural products such as cotton, raw meat, leather, edible oil, sea products, etc. are imported from China. But due to the coronavirus outbreak, the export of these products has reduced in a big way, especially in the import of leather and raw meat.
A mixture of Positive & Negative Effect
Hence, the coronavirus is going to affect the Indian agriculture sector in a big way. Moreover, it’s going to be a mixture of both negative and some positive effect as it will reduce the trade deficit by increasing the export volume and will increase the export of Indian raw materials. The decrease in imports may increase the prices of essential commodities due to decreasing stock quantity, say experts.
