Transport, construction, and chemical manufacturing sectors in India are predicted to be the worst-affected by the coronavirus outbreak in China, according to a report by ICICI Securities. “The sectors likely to be worst-affected by the possible shutdown in China are construction, transport manufacturing, chemical manufacturing and machinery manufacturing,” the report said
However, the same report says that India’s top imports such as crude oil, gems, and jewelry, which account for 46 per cent of total imports, will remain relatively independent from the economic damage caused by COVID-19 in China,
According to the ICICI securities report, 26 per cent of India’s total imports comprise of iron, steel, and inorganic chemicals, these are predicted to be moderately affected by the crisis in China. “We expect the impact on iron and steel to be moderate because India imports 11 per cent of its iron and steel from China. Also, India’s biggest import source country for iron and steel, South Korea imports 20 per cent of its requirement from China,” said the ICICI securities report.
The report also says that the impact of the crisis on the import of inorganic chemicals will also be moderate in nature as India only gets 15 per cent of its inorganic chemicals from China.
India’s exports to China only account for 5 per cent of India’s total exports. According to the report, this means that there won’t be a major impact of the coronavirus outbreak on India’s major shipments. However, it also said that some export commodities like organic chemicals and cotton could face headwinds as they export sizable share to China.
The virus which originated in Wuhan has now spread to over 110 countries, according to the WHO. The coronavirus outbreak has already been declared a global pandemic by WHO. The virus has claimed more than 5,000 lives from across the world and there are more than 1 lakh confirmed cases. The virus outbreak has put the entire world’s financial markets on edge.
India has five key import items that are heavily dependent on China. These items are- electrical machinery, machinery, and mechanical appliances, plastics, organic chemicals, and optical and surgical instruments. All these alone account for 18 per cent of India’s total imports.
Also Read: Coronavirus outbreak LIVE updates: Cases rise to 110; another batch from Iran reaches India
Also Read: Coronavirus outbreak: PM Modi proposes SAARC emergency fund to fight COVID-19; offers to contribute $10 million