The coronavirus pandemic is an unprecedented challenge on a global scale. In just a few short months, the COVID-19 outbreak has disrupted trade, brought the travel industry to its knees and wiped trillions of dollars from stock markets worldwide.
All over the world, containment measures are crippling production and spending, with a momentous economic impact. According to the United Nations’ trade and development agency, the novel coronavirus could cost the world economy at least $1 trillion.
In India, as in many emerging markets, the economic fallout could outlast the health crisis itself. Barclays predicts that India’s 21-day lockdown alone could reduce GDP growth to 2.5 percent – down from its earlier estimate of 4.5 percent.
India’s corporate community will need to put sound business continuity plans in place to endure a pandemic of this scale, especially when so many organizations are having to suspend or limit operations during the lockdown period while still paying wages, taxes, electricity and other expenses.
Impact on trade flow
As the major economies of the world gear down dramatically, this has a great impact on Indian enterprises that trade with the US, UAE, Germany, UK, Singapore, Italy and China, among others. The spread of the virus has led to a drop in demand, as well as border closures, restricted cargo movement, a lack of warehousing capacity and stalled export finance. International shipping lines and air routes are blocked, disrupting supply chains and creating unparalleled challenges for businesses engaged in global trade.
Furthermore, if China moves into a recovery phase as the rest of the world still grapples with the virus, China could be in a stronger position to meet the global post-pandemic demand than India.
This is a fast-developing situation and a lot can change from day to day. Outlined below is a brief overview of the measures that the various governments on the continent have put into place.
Due to the government’s rapid implementation of quarantine measures, Universal Health Screening at airports and border closures, the COVID-19 infection rate in India is currently relatively low compared to population size, although it is too early to rule out the possibility of a broader outbreak.
To support the most vulnerable parties during the lockdown period, Finance Minister Nirmala Sitharaman has announced an economic stimulus package worth 1.7 trillion rupees ($22.5 billion), focused on food security measures for low-income households and financial support for daily wage earners and small business owners.
Additionally, the following relief measures have been announced:
WHAT CAN YOUR BUSINESS DO?
While these interventions will provide some businesses with a certain level of support, the road ahead will still be a challenging one for many organizations. It’s therefore essential for all companies impacted by the pandemic to take action now and develop a continuity plan for the months ahead.
Essentially, your business needs the tools and technologies to stay agile, manage fast-changing regulations and rules, and control risk.
- Is your company ready for remote work? Where operationally relevant, making sure every employee has the IT assets and support required to work from home – both during and after lockdown periods – is an essential aspect of any COVID-19 business contingency plan. Solutions that facilitate team communication, data accessibility and digital workflow management are ideal in this environment.
- Improve supply chain communication and monitoring As you adapt to new trading challenges, you may want tools to communicate with your regional and global business partners in various languages, and monitor supply chain risk more comprehensively. An automated solution can provide electronic collection, standardization and organization of business partner information, with workflow tools that allow you to digitally route assessments, requests and reminders to the relevant stakeholders.
- Manage exports more efficiently As export rules change, you need to confidently maintain export control classifications for products and generate accurate documentation. An export management solution can reduce your risk of non-compliance, while making clearance, screening and document creation processes more efficient.
- Gain complete control over imports A purpose-built import solution can help you to securely exchange the trade data required for the importation of goods into any country around the world, from purchase order to final delivery. With a complete, automated system for consolidating the necessary information for import filing – and the tools to validate that data against current regulatory content – you can optimize efficiency in your supply chain.
- Know who you’re doing business with In turbulent times, it’s critical to continue protecting your business against risk that could be hiding in your business relationships – especially if you’re planning to adapt your trade lanes. You need a trusted solution for screening potential and existing business relationships against current global lists for restricted persons, companies, and sanctioned or embargoed countries.
THE WAY FORWARD
We can help you to address the unique challenges on the path ahead and steer your business through this volatile environment during 2020 and beyond.
Contact the Thomson Reuters India ONESOURCE team for more information.