India is among the 15 most affected

economies due to the coronavirus

epidemic and slow down in production in
China
The trade impact of the coronavirus epidemic for India
is estimated to be about 348 million dollars and the
country figures among the top 15 economies most
affected as slowdown of manufacturing in China
disrupts world trade, according to a UN report.
Estimates published by United Nations Conference on
Trade and Development (UNCTAD) on Wednesday said
that the slowdown of manufacturing in China due to the
coronavirus (COVID-19) outbreak is disrupting world
trade and could result in a 50 billion dollar decrease in
exports across global value chains.
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The most affected sectors include precision

instruments, machinery, automotive and
communication equipment.
Among the most affected economies are the European
Union (USD 15.6 billion), the United States (USD 5.8
billion), Japan (USD 5.2 billion), South Korea (USD 3.8
billion), Taiwan Province of China (USD 2.6 billion) and
Vietnam ( USD 2.3 billion).
India is among the 15 most affected economies due to
the coronavirus epidemic and slow down in production
in China, with a trade impact of 348 million dollars. The
trade impact for India is less as compared to other
economies such as EU, the US, Japan and South Korea.
Trade impact for Indonesia is 312 million dollars.
For India, the trade impact is estimated to be the most
for the chemicals sector at 129 million dollars, textiles
and apparel at 64 million dollars, automotive sector at
34 million dollars, electrical machinery at 12 million
dollars, leather products at 13 million dollars, metals
and metal products at 27 million dollars and wood
products and furniture at 15 million dollars.
Besides its worrying effects on human life, the novel
strain of coronavirus (COVID-19) has the potential to
significantly slowdown not only the Chinese economy
but also the global economy. China has become the
central manufacturing hub of many global business
operations. Any disruption of China’s output is expected
to have repercussions elsewhere through regional and
global value chains, UNCTAD said.
Over the last month, China has seen a dramatic
reduction in its manufacturing Purchasing Manager’s
Index (PMI) to 37.5, its lowest reading since 2004. This
drop implies a 2 per cent reduction in output on an
annual basis. This has come as a direct consequence of
the spread of corona virus (COVID-19).
The 2 per cent contraction in China’s output has ripple
effects through the global economy and thus far has
caused an estimated drop of about USD 50 billion
across countries,”UNCTAD said. “The most affected
sectors include precision instruments, machinery,
automotive and communication equipment, it added.
UNCTAD said because China has become the central
manufacturing hub of many global business operations,
a slowdown in Chinese production has repercussions for
any given country depending on how reliant its
industries are on Chinese suppliers.

Coronavirus impact: China’s growth rate may fall to 4

per cent in March

In addition to grave threats to human life, the

coronavirus outbreak carries serious risks for the global
economy, UNCTAD Secretary-General Mukhisa Kituyi
said. Any slowdown in manufacturing in one part of the
world will have a ripple effect in economic activity
across the globe because of regional and global value
chains, he said.
Pamela Coke-Hamilton, who heads UNCTAD’s Division
on International Trade and Commodities, said for
developing economies that are reliant on selling raw
materials, the effects could be felt very, very intensely.
Assuming that it is not mitigated in the short-term, it’s
likely that the overall impact on the global economy is
going to be significant in terms of a negative downturn,
she said.

Coronavirus wipes $50 billion off global exports in

February alone

The estimated global effects of COVID-19 are subject to

change depending on the containment of the virus and
or changes in the sources of supply.
Meanwhile, the extent of the damage to the global
economy caused by novel coronavirus COVID-19 moved
further into focus as UN economists announced a likely
USD 50 billion drop in worldwide manufacturing exports
in February alone.
Highlighting the ongoing uncertainty surrounding the
economic impact of the epidemic, in which there have
been more than 90,000 confirmed cases in more than
70 countries (the majority in China) and over 3,000
deaths, Coke-Hamilton said that US measures in terms
 of visitor arrivals, cancelling various meetings were
having a knock-on effect in terms of demand.
So right now, we’re not clear on where it will go — a lot
will depend on what happens with COVID-19; if they are
able to come up with a vaccine then hallelujah,
hopefully it will end very quickly, but if not, the impact
can be severe, she said

Covid-19 pulls down India's exports by 34.6% in March; trade deficit

narrows to $9.8 bn
2 min read . 15 Apr 2020Asit Ranjan Mishra ( with inputs from PTI )

 29 of 30 items each in export and import baskets contract, pointing to

severity of impact
 During FY20, contraction in India’s exports and imports left a trade deficit of
$152.9 billion
Topics
Trade DeficitCovid-19
India’s merchandise exports slumped by a record 34.6% in March
while imports declined 28.7% as countries sealed their borders to
combat the covid-19 outbreak.
In February, merchandise exports had rebounded 2.9% after falling
for six months in a row.
Graphic: Paras Jain/Mint

Click here to enlarge image

Of the 30 major items each in India’s export and import baskets, 29
saw a contraction in March, signalling the severity of the impact of
the coronavirus pandemic on global demand. Only iron ore exports
(58.4%) and import of transport equipment (11.9%) recorded a
growth during the month.

Engineering Export Promotion Council chairman Ravi Sehgal said the

sharp drop in merchandise exports was not a surprise with major
economies of the world in a state of lockdown. “April would be worse
as international trade excepting medicine and essential supplies has
come to a near halt. Exporters are facing a question of survival," he
added.
During FY20, India’s exports contracted 4.8% to $314.3 billion while
imports shrank 9.1% to $467.2 billion, leaving a trade deficit of
$152.9 billion.
The World Trade Organization (WTO) has projected global
merchandise trade to plummet between 13% and 32% in 2020 due
to the covid-19 outbreak. “The wide range of possibilities for the
predicted decline is explained by the unprecedented nature of this
health crisis and the uncertainty around its precise economic
impact. But WTO economists believe the decline will likely exceed
the trade slump brought on by the global financial crisis of
2008-09," it said last week.

Sharad Kumar Saraf, president, Federation of Indian Export

Organisations, said with cancellation of over 50% of orders, gloomy
forecast, major job losses and rising bad loans among exporting
units, the government should immediately announce a relief
package for exporters as any further delay would be catastrophic.
“The huge support given by various economies to exports will put
Indian exports in further difficulties as when the size of the cake
reduces, competition intensifies with focus on prices," he added.
World Bank in its latest South Asia Economic Focus said reduced
external demand for manufacturing as well as services exports will
impact India. “One of India’s largest exports is business and
professional services, consisting of business process outsourcing
(BPO) such as technical support and call centres largely based in
India. This sector is severely affected. Lockdown measures, both in
origin and destination countries, have forced offices to close as their
infrastructure is heavily geared towards in-office working. There is
also a concern that external demand will drop precipitously even
beyond the lockdown period, as clients cut costs. This situation will
 certainly mean fewer new projects, as well as the scaling back of
existing ones," it added. However, the bank said India’s balance of
payments position may improve. “Weak domestic demand, low oil
prices and COVID-19-related disruptions are expected to narrow the
current account deficit to 0.2% in FY21 and to keep it low in the
following years," it added.

The effect of coronavirus pandemic begins to show up in India's

foreign trade numbers
Muted exports could shave off India's economic growth that already faces a challenges
on the domestic front due to an ongoing slowdown and coronavirus pandemic.
By ET Online | Updated: Mar 25, 2020, 01.17 PM IST

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Agencies

As India enters a lockdown for the next 21 days, muted demand for fuel could bring down the
import bill.

India's import basket saw a dip of 16 per cent during March 1-19 period mainly driven by
decreased imports of precious & semi precious stones, gold and sharp drop in crude oil
prices.

The exports for the same period came down by 8.2 per cent to $16.3 billion, a report in Times
of India said.

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With India now in a lockdown for the next 21 days, muted demand for fuel could further bring
down India's import bill.
At the same time, muted exports could shave off India's economic growth that already faces a
challenges on the domestic front due to an ongoing slowdown and coronavirus pandemic.

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India's exports rose for the first time in seven months in February, up by 2.9 per cent and driven
by growth in shipments of sectors such as petroleum, engineering and chemicals.

For the April-February period of the current fiscal, exports dropped by 1.5 per cent to $292.91
billion.

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India has also banned exports of sanitisers and ventilators includinga all artificial respiratory
devices anticipating spike in local demand as the country fights the coronavirus pandemic.

The data accessed by Times of India, however, showed that iron ore exports saw a spike of
nearly 80 per cent probably on the back of increased demand of raw material as China returns
to work.