We all are aware of the mayhem caused by the Coronavirus in China and its epidemic risks all across. This seems to be a deadly virus causing fatal infections and it was just when the Chinese holidays were taking place. People were to go back to work and the manufacturing, trading, exports etc. The Chinese government had to extend these holidays resulting in delays of productions. Due to the scare, people are yet to go to work in full swing to their office and ensure the business starts. Though the globe depends on China, India’s dependence on imports from China has only been going up. This coronavirus has resulted in huge impact in India and the future seems little worrisome. China being a manufacturing hub generally contributes to more than 15% of the global gross domestic product. If situation doesn’t improve soon, clearly economy disruptions or stall of economy can be visible not only in India but globally.

The effect has been on the Supply Chains, visits of Indian and Chinese business men into the respective countries has been deferred. Supply Chain disruptions seems to be higher than what happened during the 2003 SARS outbreak. 17 years ago when SARS had caused havoc, India was the only country which was not adverse effected. However this time, there is a visible effect which will be there as the dependence on China imports has grown multiple folds. China GDP now accounts to a larger share of the global economy and hence the new outbreak will gave greater repercussions than what was felt in 2003.

Several Indian Industries have a significant direct dependence on supplies form China. India dependence on China has been increasing. The major commodities/products which get hugely impacted are Electronics, Consumer Electronics like Laptops, Mobile Phones (largest smartphone market), IT products, Capital & Engineering. goods, Chemicals, Auto & the Auto components, Engine Components, Textile Fabrics, Pharma especially API’s and antibiotics and Fertilizers. The fashion Industry also largely depends on China especially for the fabrics and trims. eCommerce offlate and cross border business was largely depending on China which has also started seeing a visible downfall of business in India. Companies like Xiaomi, Vivo, Oppo, Sony, Huawei, TCL, Apple, Samsung, LG, Nvidia, Amazon, Zte etc will get hugely effected despite the facts that many of them have opened manufacturing plants in India under the Make In India scheme.

The production delays and due to the stoppage of Cargo into India, most of the industries related to the above have been hit and they have not been able to trade this month. The belief in general is that it should pickup from the last week of feb and the trade will get better. The inventory which the Indian Companies had is almost to be over and with the March, yearly and quarter end coming in, the pressure on everyone is going to mount. The prices of cargo is likely to go up and the cost and the supply chain is surely going to get effected. The supply chains for the Indian industries are linked to China. If the outbreak continues, the situation for many of the industries and their business will get majorly impacted. The ripple effect would probably be witnessed for the coming few few months resulting in not only hampering the sales and growth this quarter but also the next quarter of various industries in India.

There will also be a major effect of the exports from India, which has got effected due to this outbreak of coronavirus. Surge in volumes are expected if the country is coming back to normalcy which will lead to price hikes, supply chain issues, change of supply chain models so as to ensure that the products reach the industry or the country in the least possible time with minimum costs. Air Cargo capacities may become an issue, Ocean logistics would take lot of time and this would result in the business all across. So, a midway would be the solution to make sure the cargo reaches the specific countries asap by various permutations of supply chain. So, from the supply chain perspective, there would effect on productions, exports, movement of cargo, spike in cargo freights and time which will be a big impact on the economy and supply chains all across. There is likely of more freighters flying into china once the normalcy is visible due to the sudden crisis and demand.