Coronavirus impact on Indian economy: small businesses suffering the most

The coronavirus lockdowns have had a disastrous effect on the Indian economy, which was magnified by the already depleting state of the economy prior to the lockdowns. Meanwhile, India has become the 7th largest carrier of Coronavirus on the globe, and prospects for the future are bleak.

Coronavirus impact on Indian economy

India is gradually unlocking its economy after a shutdown that lasted more than two months. But it’s unlikely to be business as usual for millions of retailers, small enterprises and factories, writes the BBC’s Nikhil Inamdar. The Coronavirus impact on Indian economy has seen the economy on its knees, with fears growing of the economy not recovering from this pandemic.

By all accounts, reversing the disruption caused by India’s lockdown will be a long haul – and the price businesses, especially small firms, have paid is just starting to become clear.

Coronavirus impact on Indian economy 

At least 20% of neighbourhood mobile shops that sell smartphones may never reopen again, says Arvinder Khurana, president of India’s mobile retailers association.

The reasons are many, he adds – on the one hand, owners have fled the cities and are yet to return, and on the other, with job losses mounting and banks averse to offering consumer loans, there is no demand for high-end phones.

According to India’s retail association, sales of non-essential items – such as clothes, electronics, furniture – fell by 80% in May. Even sales of essential goods – such as groceries and medicines – dipped by 40%.

Businesses suffering due to lockdown in India

Several factory operators, meanwhile, said they had difficulty resuming operations because so few staff showed up, and supply chains had also been disrupted.

Read more: India reopens some businesses but fails to cater them

“With no raw material, a ban on transportation, and the non-availability of manpower, I have not been able to operate,” said Ritesh Srivastava, who makes homeopathic medicines in Lucknow.

Some smaller factories said they couldn’t comply with stringent workplace requirements for returning workers and feared being blamed if staff fell ill.

Coronavirus impact on Indian economy: bleak future in forecast

The near future looks uncertain as infections rise – India has recorded nearly 200,000 cases so far, with several record single-day spikes in the last week.

But the government is yet to announce uniform procedures for businesses that are reopening – so sales are expected to slide further down, even as high-street shops, malls and other commercial markets are scheduled to reopen next week.

Read more: Economic slump in India exacerbated by lockdowns

Not all businesses were closed during the lockdown – those deemed essential, from agro products to power, food supply to healthcare – continued operating. And more businesses have been allowed to reopen since early May.

But they are all bogged down by low demand, falling exports, labour shortages and new rules of operation requiring social distancing and other safety measures to curb the pandemic.

In a recent interview, the CEO of one of the world?s leading motorcycle manufacturers, also said there isn?t enough clarity from the government.

“I am not seeing that smooth, concerted, rhythmic movement towards unlocking,” says Rajiv Bajaj, managing director of Bajaj Auto.

India sees largest surge in Coronavirus

With 9,851 new cases and 273 deaths in the last 24 hours until Friday morning, India saw its biggest surge in COVID-19 casualties.

The spike comes two days before the country is all set to ease its lockdown restrictions by opening religious places, restaurants, and shopping malls.

Read more: India sees largest-ever one-day jump in coronavirus cases

According to the Johns Hopkins Coronavirus Resource Centre, India now has 227,029 confirmed cases including 6,363 deaths.

In a news conference last week, the Home Ministry announced an easing of lockdown from June 8, referring to it as ‘Unlock-1’.

However, the Health Ministry has issued protocols to stem the spread of the virus. These include prohibiting large gatherings and encouraging restaurants to offer takeaways.

Coronavirus in India: the picture so far 

As of today, the number of people infected by the Novel Coronavirus and suffering from the associated disease COVID-19 in India has crossed 227,000. There have been more than 6000 deaths associated with the disease. A statistic to take heart from is the fact that 109,000 people suffering from COVID-19 have recovered. 

India is now the 7th worst-affected COVID-19 country in the world, after the United States, Brazil, Russia, United Kingdom, Spain, and Italy.

Read more: India blames Tableeghi Jamaat leader for Coronavirus surge

Five Indian states with the biggest 24-hour jump in total cases on Friday were Maharashtra, Delhi, Tamil Nadu, Gujarat, and Bengal.

The western state of Maharashtra where the financial capital Mumbai is located continues to remain the worst-hit with 2,933 news cases. The state has confirmed 2,710 deaths since the start of the outbreak, the highest in India.

The total number of coronavirus cases in Delhi has crossed the 25,000-mark, with fatalities rising to 650.

COVID-19 associated lockdowns have caused a slowdown in the Indian economy, with experts saying that it will shrink by as much as 6% this year. 

Anadolu with additional input by GVS News Desk

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