Who would have thought a country like China, which is adept in trading short term goods will one day produce a deathly virus. It’s been seven months and still the virus prevails in the whole world co-existing with our lives. I don’t think I really need to tell the name of this virus when on the daily news channels all over the world are bombarded with its news. The first news came in December 2019 when the first case was reported in Wuhan city of China, a person showed unusual symptoms which became next to impossible to treat. The counts steadily rose up after that. Several other countries, including India, became the victim of Covid-19.
The World Health Organization on 11th March 2020 declared Covid-19 as a pandemic. It is just horrifying to know that India is said to have the greatest number of confirmed cases in the whole of Asia. In India, the first case came to light on 30th January 2020 in Kerala. The nation has been going through a roller coaster ride since then.
Indian Economy, fall or rise during Covid-19
You must not be ignorant of the fact that Covid-19 has crossed the 8 lakh mark in India. Each day we are observing 25000+ cases. It is just hard to digest that the Indian economy is dwindling drastically along with the rising rate of Covid-19. Economists say that this fall of the economy is even steeper than the SARS outbreak in 2002 and the financial crisis of 2008 and 2009. The country has observed 3 lockdowns since 25th March and its effect on the employment sector is terrifying. Nearly 14 crores of the Indians have lost their jobs. Airlines, hotels, and restaurants are expected to have no or less business in the near future. Many startups and small businesses also have gone through huge losses. The country’s industrial production marked a complete full stop for the month of April and has been observing slow industrial operations since then.
The Labor force was completely denied to work for 2 continuous months. Companies are focused on keeping only the most useful human resource and are kicking everyone out. Not just companies, consumers too are focused on buying only the essential item. In a situation where no one is sure of their life, trading of inessential goods has relatively slowed down. You wouldn’t be buying a car at the cost of your life, or will you? The auto motor industry is also severely hit by a coronavirus. Let us study the situation of the manufacturing and trading industry in brief.
What is the manufacturing and trading industry?
The magic of the manufacturing industry is unmatchable. From raw materials to finished goods, it provides ready to use products. It falls under the secondary sector. Take a look around you, everything you see from food to clothes, furniture to electronics is a product of the manufacturing sector. It contributes almost 20% of the Gross Domestic Product. You cannot wear threads around your body, right? First, You need to make clothes out of them. The manufacturing industry does that job for you. Not just this, but several other Uncountable end products are manufactured by this industry.
The manufacturing industry can surely not take the whole responsibility to sell the products produced. They need a middle trader who can advertise and sell their goods to the end-user. Traders purchase quantities of goods from these manufacturing industries in bulk and sell them. These traders are the most skilled and experienced who know how to present the product to the consumer in the best possible way. It is responsible for the business exchanges of business transactions. The trading industry and manufacturing industries are both interrelated and the disruption in one will definitely hamper the scale of the other.
How worst are these sectors hit in Covid-19?
The manufacturing sector of India is hit in several ways. With the lockdown, operations of the manufacturing sector have decreased to a great extent. The suppliers are not ready to buy large quantities of goods to save their skin. After all, nobody is prepared to bear losses at this time. Due to the less demand, the supply has subsequently decreased. Only the necessary goods or primary needs are getting produced and supplied. China is a huge importer of primary and secondary materials. It is the heart of raw materials. Many countries all over the world are dependent on China to get raw materials. Multinational electronic companies like Apple, Intel, and Sony all get their raw materials delivered from China. With the Covid-19 pandemic, China has minimized the flow of raw materials. India also gets its raw material from China.
Almost 80% of the raw materials of medicines are supplied by China. This is hard to believe how dependent we are on China for pharma products. China imports about 37% of organic chemicals, 45% of electronic imports, 13% of inorganic chemicals, and 36% of Dyes in India.
The manufacturing sector has registered a fall in production due to other reasons as well. With the whole world in lockdown, employees didn’t show up. The industries have very low numbers of workers. Apparently, daily operations have also been reduced. With the fall in operations of the manufacturing sector, the trading industry relatively grew weak. A huge gap has occurred between the supply and demand chain. Trading of only essential items is being done, in order to prevent losses. In export terms too, China is said to be the third-largest exporter of Indian goods. That clearly tells how detrimental is Covid-19 to the trading sector.
Indian Companies that are hit severely during Covid-19
Cochin Shipyard –
Cochin Shipyard Ltd is the greatest company in India in terms of regulating shipbuilding and its maintenance facilities. The company is located in Kerala, Kochi. It is believed to have undergone no production activities since the start of the lockdown period. The company is still running low and is aiming to cover up the losses incurred during the period anyhow.
Shree Steel Wires –
Since 1972, this company is dominating the industry of steel wires in India. The railway overhead products and wire rope are manufactured by this company. Due to the lockdown which resulted in no railway functions, this company is facing a critical situation. The company said the period hit them adversely, with not even a single earning done.
TTK healthcare –
The healthcare company has been severely impacted. It believes that the effect of the Covid-19 will be more severe in the coming fiscal year of 2020-2021.
Minda Industries –
Minda industries are the leading producer of switches and batteries for motor vehicles. The company’s revenue noted a significant drop. In a press release, Minda industries said, in order to reduce the impact of the situation the company has taken various initiatives to manage the cost in the organization. It also said that it is aiming to conserve cash so that they are able to prepare themselves for any challenges the company might face with the continuously evolving situation.
Hotel Leela venture-
with almost 0 tourism during the lockdown and very less expectation in the future, the revenue of this 5-star hotel seems next to impossible to generate. It is undoubtedly challenging for the company to create profit in the near future.
The road ahead
One of the major challenges that the businesses are going to face is that of restarting their operations. We all know, this pandemic is not leaving the world soon. Even with the avail of vaccines. It will stay with us for an unpredictable time. One thing this pandemic has taught everyone is that we need to be self-dependent. As our honorable Prime Minister said “ aatm nirbhar Bharat”. This coronavirus has brought several opportunities for Indian companies to start their operations solely. No doubt, if India played its cards right then it may be able to attract world companies to invest in it. The idea of smart manufacturing companies needs to be adopted in order to give an encouraging boost to revenue in the future.