Coronavirus Impact on Indian Economy

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Coronavirus disease 2019 (COVID-19) is an infectious disease caused by severe acute respiratory syndrome (SARS-CoV-2). It was first identified in December 2019 in Wuhan, China, and has since spread globally, resulting in an ongoing pandemic. As of 25th may 2020 around 5.4 million people are infected around 2.17 million people have recovered and the disease had caused around 3,45,000 deaths. Common symptoms include fever, cough, fatigue, shortness of breath, and loss of smell and taste. The time from exposure to onset of symptoms is typically around five days but may range from two to fourteen days. Recommended measures to prevent infection include frequent hand washing, maintaining physical distance from others (especially from those with symptoms), quarantine (especially for those with symptoms), covering coughs, and keeping unwashed hands away from the face.

Across the globe most of the countries have closed down all their economies. People are asked to do work from home. The essential activities are the only businesses which are open across the globe. In India the unemployment has rose from 8.75% to 24.57% till date. The stock exchanges across the globe have had a hit among which China had the least movement of 3% downwards and India saw the highest fall of around 25%. As the Indian markets are the highest hit due to the Coronavirus pandemic, in this essay I'm going to analyze the economical impact based on different sectors, such as: primary sector, secondary sector and tertiary sector.

Primary Sector

The agriculture which accounts to 16% of GDP of India is affected due to the logistical problems. The migrant labors who account for most of the 31% of workforce in India are moving back to their own states. This is causing a huge shortage of labour and problem in the agricultural sector in India. The fertilizers which are necessary for agricultural industry is facing a shortage due to non availability of raw materials to make fertilisers as there is a ban on exports.

The tea estates in India are another worst affected industry. Since it is a labor-intensive industry there is a huge shortage of labor. The Darjeeling Tea Estate which is one of the largest exporters of tea expects a drop in revenue and expects tea sales to go down by 8% across India. While the dairy industry was functioning during the lockdown, the basic feed needed by the cows was not available due to transport issues, which were heavily criticized.

The energy sector which is another important sector sees a huge fall in consumption of energy due to the Covid-19 pandemic. The LPG consumption has risen by around 12% due to non-availability of restaurant chains across country due to lockdown. An international agency has predicted that India’s diesel consumption would reduce by 6% and annual fuel consumption by 5.6%.

The fishery industry is affected as the pandemic has hit during the non-fishing period in some parts of India which has added to their worries. The main problem for fishery industry has also been the movement/transportation.

So, summing up, the main problems faced by the primary sectors are: transportation, availability of raw materials and labors.

Secondary Sector

The secondary sector generally includes those industries which produce a finished usable product or that are involved in construction. The sector generally takes input from the primary sector and produces the output for export or sale to domestic customers. The sector is generally divided into light industry and heavy industry.

The major automobile industries such as Maruthi, Toyota, Tata, and Mahindra have all closed down their operations and plants or are functioning only with minimum employees. As a result, the factory output has reduced. Due to the pandemic the economic demand is also very less in this industry. The major problem faced by this industry is problems in supply chain management. According to a research by GlobeNewswire a leading journal the global automobile industry will see a 12-15% dip in their overall sales and revenue.

The Fast-Moving Consumer Goods (FMCG) segment is also another sector which is affected by the pandemic due to lack of transportation. The local Kirana shops were more benefited due to the lockdown as all small shops were able to make revenue out of the lockdown. The local brands and manufacturers increased their productions in order to meet for the demand in India.

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The major mobile brands like iPhone have stopped their manufacturing plants across India.

Telecommunication industry has seen a rise in number of subscribers as well as heavy traffic due to the lockdown. The increase need of telecommunication is due to more people asked to work from home and more use of OTT platforms as more people are staying in home.

So, the major problems of the secondary sector are: the disruption of supply chain, reduced consumer activity and lack of logistics.

Tertiary Sector

The tertiary sector is the sector of the economy which is concerned with the services in the economy. In India due to the pandemic most of the service industries are affected. Tourism is one of the major service sector industries of a country. In India tourism contributes to around 9.2%. Many people are unemployed due to lack of tourists and travel ban during the pandemic. The income or revenue from tourism industry is nil during the pandemic.

The transportation industry has also been affected due to the pandemic. The logistical movement is difficult due to rigorous checking happening between cities which makes transportation difficult. Adding to the woes no public transport is available for people to use.

The information technology sector is least affected sector among the other sectors as most of the companies have asked their employees to work from home. The impact in this sector is comparatively less.

Indian aviation sector could be said as one of the worse affected sectors as all the aviation companies were asked to shut their services due to the nationwide lockdown caused by the pandemic. Aviation sector has started to resume from 24th may with only domestic travel permitted. The aviation companies were asked to pay their dues. It seems that most of the companies would do huge sacking of employees as they are running out of cash and may even turn out to become bankrupt. The aviation sector is the most affected sector as many wouldn’t prefer to travel after the pandemic as it spreads mostly during travel.

Hospitality industry is another industry which isn’t functioning due to the pandemic. Experts say that the turnout of customers might take some time. It takes some months for tourism industry to begin which is important for hospitality industry to function.


The Indian government has introduced an economic relief package worth 20 Lakh crore which is about 10% of GDP by Prime Minister. The economic package is aimed at bringing relief to various sectors and stressed businesses. The Indian Government is trying to attract the firms which are about to shift their production units out of china. The government is making reforms to pull the firms into India. The better part is unlike the other governments India isn’t printing any currency notes, only 3.2 lakh crores government has spent from its treasury which is only 1.4% of GDP remaining amount is contributed other various lending houses.

In my perception I think the economy would see U shaped curve. Mostly there could be a stage of recession which would then go on to recovery and then a boom stage. This business cycle may take some few years or many years. Many agencies have predicted the GDP of India post-Covid-19, like: SN Agency Estimate Bernstein -7%; ICRA -5%; Goldman Sachs -5%; Nomura -5%; SBI -4.70%; CARE Rating -1.5%-1.6%.

So, everyone predict that our economy would face a downfall but even when Bhuj earthquake struck Gujrat in 2001, it was devastated. Everyone predicted the same that it would take long time for its recovery. During that time the GDP of gujrat it was at 6th place but within a short span of time it recovered and now it is at 3rd place. This could be taken as an example and can be done all over India.

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Coronavirus Impact on Indian Economy. (2022, October 28). Edubirdie. Retrieved April 20, 2024, from
“Coronavirus Impact on Indian Economy.” Edubirdie, 28 Oct. 2022,
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