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Exports to COVID-19 affected countries may hit: Report
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SME Times News Bureau | 06 Apr, 2020
As economies and several industries witness near standstill amid the
coronavirus pandemic, a KPMG report says that the crisis may lead to
greater protectionism globally.
It said that the supply chain disruption has brought to light the immediate and tangible impact of black swan events.
"That,
along with the ongoing geopolitical environment and a globally
recessionary climate is likely to lead to greater protectionism and risk
aversion. This is expected to lead to greater localisation of supply
chains, especially of essential commodities as well as for sectors that
are perceived to be strategically important," said the report titled
"Potential impact of COVID-19 on the Indian economy".
It also
said that companies may turn more towards the digital mode. Most
companies have opted to work remotely and their employees are now
'online' and working from home.
"While these trends were already
'in-motion', they have now hit the fast-forward button. Even the most
traditional brick and mortar organisations have been forced to
experiment with digital channels. This presents a real and immediate
opportunity to drive efficiencies through digital media," said the
report.
At the same time, it said that this crisis has
highlighted the importance of investment in enabling technologies like
cloud, data and cyber security. It will change the way we work with far
reaching implications on business-to-business, business-to-consumer,
business-to-government services, commercial real estate, e-commerce,
e-governance, cyber security, process automation, data analytics,
self-service capabilities and so on.
On the impact of the
pandemic on the Indian economy, the report said that private
consumption, investment and external trade will get affected.
India's
real GDP growth decelerated to its lowest in over six years in 3Q
2019-20, and the outbreak of the COVID-19 posed fresh challenges, the
report said that steps taken to contain its spread, such as the
nationwide lockdown have brought economic activity to a near-standstill,
with impacts on both consumption and investment.
"While Indian
businesses, barring a few sectors, can possibly insulate themselves from
the global supply chain disruptions caused by the outbreak due to
relatively lower reliance on intermediate imports, their exports to
COVID-19 infected nations could take a hit. In sum, the three major
contributors to GDP -- private consumption, investment and external
trade -- will all get affected."
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Customs Exchange Rates |
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Import |
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US Dollar
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75.65 |
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As on 13 Aug, 2022 |
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