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The outbreak of Covid-19 has severely impacted the global economy, with disrupting businesses across diverse sectors around the world. The spread of the virus now has led countries into lockdown, fearing the economy of a recession. As the virus significantly affects most established countries, its impact on India is relatively low than others but has a larger impact on the country’s businesses and economy.

Since the country’s nearly 55 percent of electronics imported from China, these have now slid down to 40 percent due to the coronavirus outbreak and subsequent lockdown. Over the last couple of decades, the IT industry has been India’s leading sector to economic growth. It plays an imperative role in fulfilling the country’s several middle-class dreams of accomplishment and aspirational careers.

However, due to coronavirus Covid-19 outbreak, players in India’s IT services, according to industry analysts, will see a significant slowdown in growth during this financial year. Reports claim that top software exporters, including Tata Consultancy Services, Infosys, and HCL Technologies, will be impacted most by the lessened technology spending from clients in the US and Europe following lockdowns across the globe.

In the time of crisis, Brokerage HDFC securities anticipates IT sector revenue to cut down by 2-7 percent due to a delay in decision making in the next six months while businesses assess the impact of the virus. Customers are also expecting to reduce their IT budgets and slow down new initiatives due to the fear of uncertain economic situation and recession.

In a statement, former Chief Financial Officer at Infosys Ltd V Balakrishnan said last month that there will be an impact on the Indian Information Technology industry for multiple reasons. With the restriction on movement of people following the scare, Indian IT companies’ ability to deliver services on-site could get severely impacted but that could be addressed to some extent by working remotely.

According to the National Association of Software and Services Companies (NASSCOM), India’s software and services exports grew 8.1 percent to US$147 billion in the fiscal year 2020. Moreover, Infosys and HCL Technologies give annual forecasts, while Wipro gives revenue guidance for a quarter. However, these firms are yet to announce dates for their quarterly results. Meanwhile, other IT firms in the country such as TCS and Infosys begin the results calendar in the second week of April.

In recent times, Indian firms have faced several projects cancellations by clients across sectors due to limitations in air travel and shutting down of cities and countries to contain the spread of the Covid-19 pandemic.

The pharmaceutical industry is also disrupted by the Covid-19 outbreak because 70 percent of active pharmaceutical ingredients are imported from China. These active pharmaceutical ingredients are indispensable to a large number of pharmaceutical manufacturing companies in India.

Apart from this, the finance and real estate sector, except for banking healthcare services was anticipated to take on a large part of the disruption caused by the coronavirus epidemic in the country as of March 2020. In addition, the overall impact of the virus on India's economy was projected to reach around INR 8.8 trillion. Despite GDP forecasts cut growth for the south-Asian country, the large unorganized sectors of the country were said to keep the economy from falling.