Coronavirus Outbreak – An Economic Opportunity or Loss for India?

Coronavirus Outbreak to Offer Opportunity for India to Expand Exports

Introduction

Coronavirus outbreak in China offers an Opportunity for India to expand exports by boosting India’s manufacturing activities of course assuming India stays immune to the epidemic. It can provide a great stimulus to Make in India campaign to become a manufacturing hub and thus could help in becoming an export hub.

Coronavirus Outbreak | Opportunity for India

Impact of Coronavirus Crisis on World Economy

• China is the World’s factory. In a year, it makes around :
  • 90% of the world’s 30 Crore computers
  • 70% of the 200 Crore phones and
  • 80% of the 11 Crore Air-conditioners sold globally
• Amidst Coronavirus crisis in China, factories and the manufacturing activities across China have been shut down partially.
• Wuhan, the epicentre of the coronavirus crisis, is home to some of the world’s largest computer factories. Whereas, Hubei province, whose capital is Wuhan, is home to some of the world’s largest auto component makers.
• As a result, this outbreak could have the cascading impacts on the overall world economy. Many of the companies across the world are assessing the impact of this coronavirus outbreak which has halted the manufacturing in China for global supply chains as well as domestic market.
• This can be a very good business opportunity for Indian manufacturing Industry. Lets discuss these opportunities in detail in this article.

Impact of Coronavirus Crisis on India

Spotting Opportunities for India Amidst Coronavirus Outbreak

1. Accelerating ‘Make in India Campaign’

• The Make in India Campaign led by Government can be accelerated to take advantage of the supply shortfalls from China due to the partial factory shutdown there in China.
• Thus, Manufacturing activities under Make in India cab be pushed by incentivisation in order to motivate the local Indian Manufacturing plants/ factories to target of the opportunity.

2. Developing Manufacturing Ecosystem in India Rather than just Assembly

• In recent years, good intelligence has been emanating from India’s high-tech factories. However, Complexities in the Indian manufacturing ecosystem make it difficult for India to quickly take advantage of the disruption in global trade.
• The dependence on China has slightly decreased over the last five years. From importing finished products, India is now assembling products and developing the ecosystem here, thus becoming a assembly hub.
• But, in order to stimulate the manufacturing activities in India, India need to develop its manufacturing ecosystem here only to cater India’s domestic consumption rather than having only assembly ecosystem.

3. Working on Advantages like Lower Labour Cost & Skills Availability

• The Labor cost in India is 1/3rd than of China. Also, there is a lot of availability of skilled resources in India.
• India can take advantage of these skills available locally and make it utilise in the process of accelerating the manufacturing activity. This can also help in improving the employment opportunities in India.

4. Stimulating the Manufacturing for Global Markets

• In addition to domestic market, India’s manufacturing activities should be stimulated from global context also.
• Indian factories should take advantages of this opportunity, where Global market is looking for the alternative to China in order to meet the global demands.

5. Encouraging the Exports

• Economic activities in China is mainly Export-oriented. On the same export-oriented ambitious target, China’s manufacturing activities have reached to the position of World’s Factory or Supplier.
• Taking into consideration the current shutdown of Factories in China, there might be supply disruptions to the countries importing from China. In
• In such scenario, India can take advantage of this opportunity and encourage the exports. Like China, India also need to develop Export-oriented economic activities