Impact of Covid-19 on global industry & scope of India to attract China-returned countries

Covid-19, the latest pandemic as declared by the W.H.O has been creating havoc the world over. People infected with this virus are found to be dying within few days. Health experts have also acknowledged the fact that there are reported many cases where patients did not experience any kind of symptoms. With mass deaths registered the world over, a panic situation has developed, where respective governments of almost all countries have been imposing longer periods of lockdown. Even citizens are barred from getting out of their homes, so as to render the virus ineffective, which is highly contagious.

Its impact on global industry

With people locked in their homes and shops, malls & all other non-essential institutions closed, almost all industries have come to a standstill. This isbarring pharmaceutical companies and others tagged in the essential item group allowed to carry out its less than normal functions. Many industries have simply shut down their gates asking employees & workers to stay back home, either with partial or no salary. This is evident the world over. Many small & even big companies including aviation, manufacturing and the like have already started going into the recession mode and ready to cut back on their employee strength significantly. The U.S. already has experienced huge job loss and major unemployment problems, which is found to be much more than that of the last recession. With remedy & vaccines still months or years away, the future seems to be bleak for industries, everywhere.

Impact of Covid-19 in China on industries & scope of India to attract new industries

It was in China last September’19 that Covid-19 virus had started infecting people, supposed to be from the Wuhan market. This virus is said to have emerged from bats sold in the market as food. It was China which had initially called for a stringent lockdown in Wuhan area as well as other provinces. Moreover, China is engaged in a trade war with the United States right much before the pandemic outbreak. This coupled with continuous lockdowns caused by the pandemic has compelled many American, European, Australian and Asian companies to look for other regions to shift their production unit based in China. The shift of manufacturing units from China is considered to be more long term & structural in nature.

According to reports, around 76% of the companies are aggressively looking forwards to shift their supply chains. This is regarded to be a response to China’s protectionist policies like trade tariffs. Apart from this, another 66% reported moving production facilities.

Such companies have been looking at other ASEAN countries including India to relocate their units. In India, the sectors have been divided into services and manufacturing oriented. Around 10% are considering India to be the next incremental investment avenue. India being a large democratic country & having huge market, manufacturers are likely to be interested in setting up their base here. The current government has also being doing its best to bring new foreign investments to the country. For this, they have already started to restructure the foreign economic policies and increasing infrastructure threshold in the country. The Indian government is quite confident that the better infrastructure combined with easily available, cheap & intelligent resources can be a welcoming sign for the new industries coming from China.

With the United States government backing the Indian government, global manufacturers including large Original Equipment Makers (OEMs) have already started discussion with Indian companies to identify feasibility to shift part/entire supply chain to this region from China. Industry experts do expect tremendous growth opportunity as well as migratory development in supply chain.

Some demand is also availed from Indian firms which were previously depended heavily on China to source components.

Covid-19 outbreak & emerging industries

Although a good number of manufacturing companies are witnessing temporary closure due to the outbreak, there are few which are noticed to have increased scope for growth in the long term. This virus led infection according to the experts is likely to be there for some time and health experts have suggested some ways & means to keep it at bay. Hence, the industries revolving around hygiene are expected to be the ones to witness a boom in the coming years.

·         Hand sanitizers: By 2025, the Indian market for hand sanitizers is expected to cross $43 million. The growth of hand sanitizer manufacturing plant is rather attributed to people understanding the importance of overall wellness & leading a healthy lifestyle. Demand for sanitizers has only increased manifolds with Covid-19 outbreak, something that was never seen before. This market is categorized by spray, foam, liquid & gel.

·         PPE Kit: With Covid-19 on the rise, there is a huge demand for PPE kit among the medical segment as well as from the Corona warriors. Healthcare industry is all set to witness a robust growth and is considered to be among the main growth driver to help grow PPE market in the country till 2021. Market growth prediction by 2021 is likely to be over 13% CAGR.

·       * Disposable face mask and surgical mask: With Covid-19 infection spreading from one person to another through contact, wearing face & surgical masks like N-95 has become a compulsion. By 2025, it is expected t reach around $95 million, with 6.1% CAGR registered from 2018-25.

·         * Disposable and surgical gloves: Increased concern about Covid-19 infection & awareness about hygiene & safety has helped disposable & surgical gloves to witness significant demand. The Indian market by 2025 is projected to reach about $760 million.

·         * Wet wipes: Wet wipes are being increasingly used in consumer & industrial applications, combined with increased awareness about cleanliness & hygiene. This in turn has promoted growth for wipes globally. Disposable wet wipes market in India is nascent and is anticipated to cross over Rs. 1,500 Crore.

·     * Liquid hand wash: With Covid-19 virus increasing awareness among people about cleanliness & hygiene, liquid hand wash market is all set to witness tremendous growth in the future.

·       *  Hospital: With regards to employment & revenue, healthcare sector is considered to have become the country’s largest sector and this year 2020, it is expected to cross $372.

Hence, the plan among different companies based in China has indeed given India a tremendous opportunity to benefit from it and to become a global leader.