Covid-19 Impact On Indian Industry

Apart from the panic it has created, the spread of coronavirus has impacted businesses and industries in India as manufacturing in China takes a hit

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Waiting For Reboot

Electronics industry battles supply and price issues as production comes to a halt

The electronics industry is adopting a wait-and-watch approach as the coronavirus scare continues. As of March 6, at least 97,694 people were infected across 90 countries while 3,382 have died because of the virus.

India imported $23.2 billion worth of electrical and electronic items from China in 2018, according to United Nations Comtrade data. As a leading manufacturer of smartphones and electronic goods, production and supply have taken a hit because of the virus. The ‘Assessing the impact of the Covid-19’ report by HDFC Bank in February says 48 percent of India’s manufacturing inputs for electronics comes from China. Besides, the Indian market is dominated by Chinese smartphones such as Xiaomi, Vivo and Oppo. The export lockdown is having an adverse effect on business.

Authorities are hopeful that manufacturing will start in April. Once it resumes, production is likely to be doubled for electronics. Transport and logistics, however, will improve only after June. Consequently, prices are likely to shoot up. “The extended shutdown in China is likely to have an impact on our supply chain and quantum of component supplies. We are exploring alternative supply channels, but the short supply might cause some negative pressure on prices of these components. This has led to an increase in the prices of products,” says a Xiaomi spokesperson.

“With fear mongering, and suppliers’ pressure on retailers and consumers to buy, we will see demand go up in March and reduce in subsequent months,” says Navkendar Singh, research director of IDC India, a market research firm.