25 September, 2020

From Critical Drugs To Auto Parts, Zips To Solar Panels, How Coronavirus Has Hit Supply Chain

World economy is now interconnected and the impact of coronavirus is expected to be more pronounced compared to SARS outbreak in 2003

Stock markets across the world have tumbled after the outbreak
Photo by Getty Images
From Critical Drugs To Auto Parts, Zips To Solar Panels, How Coronavirus Has Hit Supply Chain

Pragya Automobiles’ owner Ankit Mishra is in a quandary. At his factory in Delhi’s Okhla region, he can either buy raw materials at double the prices, close down until supplies are normal, or maintain a break-even level, that is, neither earn profits nor incur losses. At present, he has decided to stick to the third option. Several Indian businesses in sectors such as auto, pharmaceuticals and electronics, which are already under pressure due to the current slowdown, are likely to be squeezed further.

In China, close to 100 million workers—a third of the migrant workers ­employed at manufacturing hubs across the country—are still under quarantine, which is impacting production and economic growth. Other important manufacturing nations, such as the US, Italy, South Korea and Japan, face a similar situation. Their economic growth is likely to be lower than what was estimated earlier. Globally, stock markets are in a tizzy; several tanked in the past few weeks. The Indian Sensex was down 7.5 per cent from its high in February 2020.

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