Trade impact on India due to
coronavirus to be $348 mn
The trade impact of the novel coronavirus outbreak on India
is estimated to be about $348 million, according to recent
estimates published by United Nations Conference on Trade
and Development (UNCTAD), which said the country figures
among the top 15 economies most affected as slowdown of
manufacturing in China disrupts trade across the world.
For India, the trade impact is estimated to be the most for
the chemicals sector at $129 million, textiles and apparel
at $64 million, automotive sector at $34 million, electrical
machinery at $12 million, leather products at $13 million,
metals and metal products at $27 million and wood products
and furniture at $15 million.
The outbreak could result in decrease in exports worth $50
billion across global value chains, it cautioned. The most
affected sectors include precision instruments, machinery,
automotive and communication equipment.
Among the most affected economies are the European Union
($15.6 billion), the United States ($5.8 billion), Japan
($5.2 billion), South Korea ($3.8 billion), Taiwan ($2.6
billion) and Vietnam ($2.3 billion). The impact for
Indonesia is worth $312 million.
"Besides its worrying effects on human life, the novel
strain of coronavirus (COVID-19) has the potential to
significantly slowdown not only the Chinese economy but also
the global economy. China has become the central
manufacturing hub of many global business operations. Any
disruption of China's output is expected to have
repercussions elsewhere through regional and global value
chains," UNCTAD said.
Over the last month, China has seen a dramatic reduction in
its manufacturing purchasing manager's index (PMI) to 37.5,
its lowest reading since 2004. This drop implies a 2 per
cent reduction in output on an annual basis. This has come
as a direct consequence of the spread of corona virus.
"The 2 per cent contraction in China's output has ripple
effects through the global economy and thus far has caused
an estimated drop of about $50 billion across countries,"
UNCTAD said because China has become the central
manufacturing hub of many global business operations, a
slowdown in Chinese production has repercussions for any
country depending on how reliant its industries are on
The estimated global effects of the virus are subject to
change depending on the containment of the virus and or
changes in the sources of supply.