POST PANDEMIC SITUATION: A DEPRESSION OR AN OPPORTUNITY FOR INDIA?
By: Iifl Markets
Tags: Coronavirus, Pandemic, India, Economy, Opportunity

While the lockdown has forced the families to stay home, it has also suspended the inflow of income in most of the families, especially daily wage earners and small vendors. However, even if the operations in the country have been suspended, India is aiming for a better economy post lockdown even if India’s GDP forecast for FY 21 has been dropped to its 30 years lowest at 1.8%, straight from 5.5% by Moody’s. The crude prices have fallen to its all-time low. India is now in a dominant position considering some factors and in some factors, if it plays well, it could come out well.

It is more likely that soon after the lockdown ends, the markets would be filled with depression as there would be fewer buyers, as most of the consumers would still be in a state of trauma. There would be less production and less growth in the economy. If you’ll consider the growth of the Tourism sector, India would go back about 21 years, as the entire hospitality and tourism industry would be in a huge loss, at least for this year. Yet, India will have some growth opportunities, let’s take a look at some of those factors which would help to understand better:

Crude prices:

Since the crude prices have fallen to a great extent, this could be a great opportunity for India to make comeback post-pandemic. India could simply purchase crude oil at lower prices and sell it for lower prices to the consumers, which would create more demand in the economy and hence increase in supply, as there would be enough oil to meet the demands. Secondly, the supply of cash will increase in the economy, which will obviously make the economy better.

Growth in the pharmaceutical sector:

While the pandemic has been terribly bad news, it is not that bad for India maybe. The demand for a certain drug namely hydroxychloroquine and paracetamol has increased significantly and India has been under great pressure to deliver these drugs to the United States and several other countries. While this will hinder domestic supplies of the said drug, on one hand, it will definitely curb the export curve in a different direction this time. Also, the production of the drug for export to other countries shall be boosted and in turn, the pharmaceutical companies could grow better, contributing to the GDP of India. This will also generate employment and give better opportunities to the pharma sector manufacturers, producers, and workers. So, this could be another opportunity that India could certainly bag.

China’s ruined image around the world:

China was the major supplier of many products to India as well as other countries. India’s imports from China are nearly around 14.70% consisting of products like electronic gadgets, plastic made items, machines, organic chemicals, iron or steel products, iron, and steel, etc. China is also a major supplier to the United States, Japan, Europe, South Korea, Australia, Russia, South Africa, etc. Now, after the image of China due to this virus incident has been completely shattered in the global market, India could be at the receiving end of this situation. US and Japan are among one of the powerful countries in terms of production and consumption as well. Since the domestic production of these countries would not be sufficient to meet their demands, they would still need to import goods. India is capable enough to produce those goods and hence it could meet the demand of those countries. While China would not be in the picture, a fair share of demand of China would be transferred to India, and hence an opportunity for India to bring its production and export curve on track, or maybe better than usual.

Immigration of human resources:

Due to this pandemic, most of the citizens staying abroad decided to rush back to their own countries even if they were working for well-known organizations. Since most of the Indians working across the globe have marched back to the country, the chances are higher than they would be bound to stay in India for at least a year, these people include some of the experts as well and could be a great resource for the country. India could benefit itself with the greatest minds that were earlier working for other countries as most of the countries would restrict any movement to or from the country for sometimes. So, this is yet another opportunity for India.

Increasing Competition; Increase in jobs:

While most of the schools and Universities have started giving online classes with a view to procuring fees from the students. The United States has already announced that schools and colleges shall not be in opened until next year, the chances of happening the same in India are also high, as precautions are necessary to stop the prevention of disease around the world. In lieu of this, there would be cut-throat competition in the education industry, as every organization would be providing their services online. The prices for students might fall and job opportunities would be increased as every organization would want to equip itself with the best human resources.

While the Indian industries would take time to regain its place and the right position, it can make the most out of the available opportunities. The only sectors that might face depression are the Hospitality and Tourism sector. However, that could also be coped up with if the domestic tourism contributes and planned rightly, even though there would be a substantial loss, still, something is always better than nothing.

So, neither the producers nor the consumers in India need to panic about the forthcoming situation rather they should be prepared for the opportunities and should try to make the most out of it. Above all, India will have a respected position among other countries because of the way it is dealing with the current pandemic situation.

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