Impact of the Coronavirus Outbreak on Indian Businesses
On March 13, Business Intelligence Assistant Manager Koushan Das discussed the impact of the Coronavirus on Indian businesses.
The coronavirus outbreak has brought daily life to a near standstill as countries try to arrest the spread of the pandemic. In India, the impact has been felt across sectors and businesses are facing massive supply chain and operational challenges.
Koushan discussed the Coronavirus outbreak in the country and Indian government’s response to monitor and control the situation such as travel advisory announcements, evacuation plans, prohibiting certain export items, among others.
Impact on Major Sectors
Koushan analysed the impact of the outbreak on major sectors in India including automotive, pharmaceuticals, electronics, as well as garment and textiles.
“Indian exporters/ importers of readymade garment, cotton yarn, fibres, and fabric are likely to be impacted. Alternate sourcing of items such as buttons, metal buttons, zips, hangers and needles, which are 40% cheaper in China than India, can lead to an increase in the price of finished goods by 3% to 5%. Further, India exports 20-25 million kg of cotton yarn per month to China but a partial closure of manufacturing units there has led to a drop in demand. This has led to a 3-4% drop in cotton yarn prices in the domestic market, which would further lead to lower margins of cotton yarn players.”, said Koushan while highlighting the impact of the coronavirus outbreak on India’s textile sector.
Navigating through the crisis
Engaging in sound business contingency planning; Identifying revenue and operational impact on supply chain, and reviewing the impact of force majeure while preparing for potential claims in the next few months can help businesses mitigate the effect of this crisis.
“To ensure seamless delivery of services and ensure continuity in operations, it is important for companies to increase the use of chat platforms, project management tools, and other platforms that are online or on the cloud”, Koushan quoted towards the end of his presentation.
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