The battle against Covid-19 continues across the world. With lockdowns and restrictions in place across every nation, the significant slowdown of the global economy is quite observable and troubling. Originating from Wuhan, this novel strain of coronavirus – given the name of Sars-CoV2 – has taken over the world. As the spread of infection continues, the damage, both to human lives and economy, seems irreversible.
Even with a slower rate of infection, the impact on India has been cruel. It had been estimated that the initial phase of lockdown, lasting 21 days, would cost a massive $4.5 Bn per day. And yet, even when about 50% of businesses have taken a heavy toll and supply chains have fallen apart, there does seem a ray of hope for our nation in these tough times.
“The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty.” – Winston Churchill
The Path Of Optimism
In its war against the pandemic, India shows a relatively flatter curve of infection. It does seem that it has a better chance to minimise the damage, at least for now, when compared to other nations.
But there are many aspects which can contribute – over the course of this pandemic and after it – towards India’s battle in coming out as a top player of trade and commerce within the world:
A Major Outsourcer
Globally, as the economy has come to a halt, many of the first world nations, like the USA, will be on the lookout for affordable solutions when it comes to outsourcing in the fields of IT, finances and certain non-core items. This is a scenario where India can open doors to the world.
A Global Supplier
Recently, many international buyers have turned their attention to India in order to source commodities such as ceramics, fashion, home and lifestyle goods. This can prove to be a great opportunity for India to enter the market as an alternative supplier of various commodities, both raw and manufactured.
A Manufacturing Hub
More than 1,000 manufacturers are planning to shift their production to India, which they deem an alternative to China. Around 300 of these are already in talks with the government to setup production in a multitude of sectors. This can have a big impact on infrastructural growth in towns around such manufacturing plants, and can give a boost to employment.
Support From Within
The Indian government has proposals to increase import duties on 300+ products, such as increasing the current 25% price on furniture import to 30%. Such measures can do a lot to provide an even ground for OMEs, SMEs and Indian handicrafts to enter the market and contribute to the economy.
Breaking Out From Dependencies
So far, China has been serving the world as a global hub of resources, assembly and manufacturing. It certainly has a grip on consumer electronics and mobile accessories. But considering the source of Covid-19 and the actions taken to curb its spread, the whole world paid a heavy price.
Ever since this pandemic began, a shift in consumer psychology can be observed, with a lasting impact on consumers’ behaviour towards the market, especially Chinese goods. But before India stands to fill up this vacancy, it needs to iron out its dependencies:
- Ever since the shutdown of supply chains, India’s over-reliance on Active Pharmaceutical Ingredients (APIs) has called for an action to cut ties and go independent. But thankfully, the Indian government has set up plans to increase local production of chemicals and APIs, thereby putting India out as an alternate global supplier.
- China has been topping India’s imports list for a long time, but even this supply was hit hard due to the pandemic. However, the Indian government has already began a search for alternative sources for imports of over 1,000 items, thereby replacing China as a supplier.
Clearly, there are many hurdles to cross, especially since many of the countries with which India can potentially set up ties will need to overcome the pandemic before any negotiations begin.
It is, of course, difficult to predict how the future will be, but we can still anticipate the right path and prepare ourselves for a better outcome, both for the Indians and the economy. The Covid-19 pandemic will not be vanishing anytime soon. However, optimism is one tree that we can always look up to for hope.