The trade impact of the novel coronavirus outbreak on India is estimated to be about $348 million, according to recent estimates published by United Nations Conference on Trade and Development (UNCTAD), which said the country figures among the top 15 economies most affected as slowdown of manufacturing in China disrupts trade across the world.
For India, the trade impact is estimated to be the most for the chemicals sector at $129 million, textiles and apparel at $64 million, automotive sector at $34 million, electrical machinery at $12 million, leather products at $13 million, metals and metal products at $27 million and wood products and furniture at $15 million.The trade impact of the novel coronavirus outbreak on India is estimated to be about $348 million, according to recent estimates published by United Nations Conference on Trade and Development (UNCTAD), which said the country figures among the top 15 economies most affected as slowdown of manufacturing in China disrupts trade across the world.#
The outbreak could result in decrease in exports worth $50 billion across global value chains, it cautioned. The most affected sectors include precision instruments, machinery, automotive and communication equipment.
Among the most affected economies are the European Union ($15.6 billion), the United States ($5.8 billion), Japan ($5.2 billion), South Korea ($3.8 billion), Taiwan ($2.6 billion) and Vietnam ($2.3 billion). The impact for Indonesia is worth $312 million.
"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.
"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 $50 billion across countries," UNCTAD said.
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.
The estimated global effects of the virus are subject to change depending on the containment of the virus and or changes in the sources of supply.
Fibre2Fashion News Desk (DS)
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