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Coronavirus COVID-19: India’s electronics, chemical sectors may be hit

The novel coronavirus outbreak in China is likely to impact India’s electronics and chemical sectors, a Kotak report has said.

The report said that chemicals and related sectors like pharmaceuticals, as well as electronics and electrical machinery are ‘high risk’ sectors after the outbreak of the disease.

India imports the majority of electronic products from China and exports chemicals and pharmaceutical products to that country.

“However, we believe that the macro impact as a fallout of disruptions in China will be limited, assuming that the COVID-19 spread stabilises hereon, and large exporting hubs in China remain relatively less affected. However, if production disruption in China is further prolonged, the import-dependent sectors will have significant supply risks,” said the report.

It said there was an opportunity too for the domestic producers. “Sectors such as automobiles, chemicals, electrical equipment, machinery, iron and steel products, pharmaceuticals and so on contribute around 60 per cent to India’s manufacturing GVA and around 10 per cent in the overall GVA.

“In services, travel and tourism will be at some risk with around 2.7 per cent of total foreign tourist arrivals from China along with around 21 per cent of air passenger traffic (both to and from India) dependent on China, Hong Kong, and Singapore (only China is around 1 per cent),” said the report.

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