The recent outbreak of coronavirus (or as has been officially named COVID-19 by WHO) has resulted in more than 70,000 people being infected of it in China itself.It has been declared a Public Health Emergency of International Concern by WHO. It began with a few cases in Wuhan, Hubei province in China but China's attemt to conceal it led to the global spread of disease with greater than 1800 deaths till date. The virus is considered to be a variant of SARS ( Severe Acute Respiratory syndrome) which hit China back in 2003 but resulted in less loss of lives as it was well managed within time unlike the case this time.
An accurate pharmaceutical weapon to this virus has not been found out yet but various clinical trials have shown success of HIV drugs like Remdisivir to show some positive results. The global spread of the virus has led to panic and anguish amongst people along with impact on global economy as well.
But what led to the spread of this virus globally? Well, maximum cases are seen in which people travelled back from China or came in contact with someone who had come from that place. The quarantined Diamond Princess off Japan's coast is already known to most of us where more than 620 people are tested to be positive a few casualities have also been reported from the ship.
Has COVID-19 impacted the global economy? Yes, indeed the outbreak has impacted the global economy because of the vastness of Chinese economy at global level. China is the world's second largest economy and accounts for 16.3% of global economy. A similar situation on a lower scale was seen during SARS outbreak in 2003 but at that time China was only the sixth largest economy and accounted for only 4.2% of the global GDP. Therefore, considering the share of economy and trade it occupies today, the effect seen will be extensive as well. Disruptions are also seen in business of global foodchains like Mcdonalds, KFC etc and in mobile phone company manufacturers like Apple who had to shut their stores in the region for now. The obstruction can also be seen in shipping of oil tankers and container lines because of factory shutdowns and degradation in demands. Multiple airlines have been impacted with maximum of those cancelling all routes to and from China temporarily.
Should India also worry? The ripple effects of the outbreak can be seen in Indian economy as well. But as per RBI governor, Mr. Shaktikanta Das, COVID-19 is going to have a minimal impact on Indian economy and only a few sectors are going to be impacted. The alternatives are being explored for those. The majorly affected sectors include pharmaceuticals, automobiles, electronics manufacturing sector, iron and steel industry.
In India, the cost of most commonly used analgesic, paracetamol has increased by 40%
and cost of azithromycin, a commonly used medicine for bacterial infection has increased by 70% according to bloomberg report. This is because of disruptions of Active Pharmaceutical Ingredients(API) from China. Though India has a buffer stock for two to three months as of now, still other options are being explored. This is where India can work on its own manufacturing capabilities and instead of relying on imports from other countries, try develop on its own, considering India a technologically sufficient country and promoting "Make In India" further.
Also, India has the opportunity to grab the global market of steel industry. China is the largest exporter of the alloy With industries shut and trade being hampered to other countries, India has an opportunity to increase the export of steel to other countries and reduce the balance of payments deficit. Moreover, the decrease in export of iron to China can be used in the domestic manufacturing sector bringing the cost of production in the country down and in turn benefiting the domesting production and consumption as well.
But what led to the spread of this virus globally? Well, maximum cases are seen in which people travelled back from China or came in contact with someone who had come from that place. The quarantined Diamond Princess off Japan's coast is already known to most of us where more than 620 people are tested to be positive a few casualities have also been reported from the ship.
Has COVID-19 impacted the global economy? Yes, indeed the outbreak has impacted the global economy because of the vastness of Chinese economy at global level. China is the world's second largest economy and accounts for 16.3% of global economy. A similar situation on a lower scale was seen during SARS outbreak in 2003 but at that time China was only the sixth largest economy and accounted for only 4.2% of the global GDP. Therefore, considering the share of economy and trade it occupies today, the effect seen will be extensive as well. Disruptions are also seen in business of global foodchains like Mcdonalds, KFC etc and in mobile phone company manufacturers like Apple who had to shut their stores in the region for now. The obstruction can also be seen in shipping of oil tankers and container lines because of factory shutdowns and degradation in demands. Multiple airlines have been impacted with maximum of those cancelling all routes to and from China temporarily.
Should India also worry? The ripple effects of the outbreak can be seen in Indian economy as well. But as per RBI governor, Mr. Shaktikanta Das, COVID-19 is going to have a minimal impact on Indian economy and only a few sectors are going to be impacted. The alternatives are being explored for those. The majorly affected sectors include pharmaceuticals, automobiles, electronics manufacturing sector, iron and steel industry.
In India, the cost of most commonly used analgesic, paracetamol has increased by 40%
and cost of azithromycin, a commonly used medicine for bacterial infection has increased by 70% according to bloomberg report. This is because of disruptions of Active Pharmaceutical Ingredients(API) from China. Though India has a buffer stock for two to three months as of now, still other options are being explored. This is where India can work on its own manufacturing capabilities and instead of relying on imports from other countries, try develop on its own, considering India a technologically sufficient country and promoting "Make In India" further.
Also, India has the opportunity to grab the global market of steel industry. China is the largest exporter of the alloy With industries shut and trade being hampered to other countries, India has an opportunity to increase the export of steel to other countries and reduce the balance of payments deficit. Moreover, the decrease in export of iron to China can be used in the domestic manufacturing sector bringing the cost of production in the country down and in turn benefiting the domesting production and consumption as well.
