Before COVID-19, the economic outlook and business opportunities for the Indian economy was tepid and not exuberant. The GDP growth rate was already contracting and the government was falling short of GST revenue. As soon as the lockdown was announced, and 94 percent of the Indian population that was employed in the informal sector started to head back to the villages; the implications on the Indian economy became unimaginable. According to CRISIL, this is India’s worst recession till date, predicting the economy to plummet by a massive 5 percent in the current fiscal year.
Since the beginning of the lockdown, only about a quarter of India’s $2.3 trillion economies has been functional. The lockdown has had negative implications on businesses as supply chains are strained and demand dries up. This has significantly affected more than 53 percent of businesses with many looking to business automation as a means to survive. As a result of this, major companies have suspended operations because they lack the business resilience needed to maintain operations. Moreover, businesses were unprepared for such a magnitude of a pandemic.
To add further to the economic woes, just a day before the lockdown was announced, 23rd March, 2020, the stock market posted the worst losses ever recorded in history. When the effect of all these is calculated in terms of daily monetary losses, it is expected that the Indian economy will lose over $4.5 billion every day for as long as the lockdown lasts.
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Business opportunities post COVID-19
With the nationwide lockdown extended and the economic hardship expected to bite even harder, the Indian government has announced a variety of relief measures to ease the situation. The Indian government announced a Rs 20 lakh crore COVID relief package to revive the downfallen economy. The government is also taking steps to guarantee food security and access to healthcare.
Despite the doom and gloom, there has been some silver lining for investors, and there is hope in terms of business opportunities in India. A day after the lockdown was announced, the stock market recorded its highest gains in 11 years, which added $66 billion to investors’ wealth. While this might be a one-off, some business leaders believe that, if properly managed, India is rife with business opportunities post COVID-19. Based on these beliefs, some multinationals have indicated interest and are willing to partner with the Indian government.
Business leaders believe the pandemic as the opportunity window for India to build a more resilient, diversified, and attractive economy that is appealing to global manufacturers and services. One of the major reasons behind this thought is that the effect of the pandemic on the global economy is aggravated because of a lack of diversification in the supply chain. As such, it is expected that businesses will want to reduce the exposure they face by diversifying their supply chain. This can form a source of new business opportunities for India. In recent news, over 1000 foreign firms are in discussion to move their production sectors from China to India.
The Indian IT industry is well placed for relevance post COVID-19. Although it is not spared from the effects of the pandemic as the industry is experiencing cuts in capital expenditure and revenue expectations, some companies are still receiving and fulfilling orders from international clients. The $191 billion industry is optimistic that post-COVID-19 will lead to a behavioral change that will lead to an increase in business automation globally. To prepare for the business opportunity that will open up after the pandemic, the IT companies are already setting up business continuity blueprints.
Accepting COVID-19 as a part of life, today India is slowly returning back to work to restart business operations. For most SMEs and MSMEs, they will have to begin from ground zero with new business models and new norms. With lockdown easing up gradually, 20 million workers are back in the job as of May 2020. This leaves a hope of regrowth, although slowly, but towards the road to recovery.
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- Impact of COVID-19 On Global Supply Chains and Opportunities In the Post-COVID World by Amitava Sengupta || April 14, 2020
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- Trade in the time of COVID-19: The economic impact of coronavirus on India and beyond by Pushkar Mukewar || March 29, 2020