The coronavirus impact on Indian industry

Temporary disruption from the outbreak of the coronavirus should have limited macroeconomic impact on Indian industry. After all, India has a negligible supply-chain exposure to China, where factory shutdowns are now having knock-on effects in many other countries in Asia. And given that India is a major oil importer, local firms stand to benefit from the drop in global oil prices since fears about the virus spread last month. But while the macro impact appears benign, there could be serious consequences for individual firms, particularly in the textiles and electronics sectors, which respectively import around a third and half of their intermediate goods from China. It will be a tall order for firms in these sectors to source goods from elsewhere immediately.