{"id":10226,"date":"2020-06-19T11:13:15","date_gmt":"2020-06-19T11:13:15","guid":{"rendered":"\/blog\/?p=10226"},"modified":"2025-06-17T11:47:51","modified_gmt":"2025-06-17T11:47:51","slug":"economic-impact-of-covid-doomsday-or-once-in-a-lifetime-opportunity","status":"publish","type":"post","link":"https:\/\/www.tatacapitalmoneyfy.com\/blog\/investment-guide\/economic-impact-of-covid-doomsday-or-once-in-a-lifetime-opportunity\/","title":{"rendered":"Economic impact of Covid: Doomsday or once in a lifetime opportunity?"},"content":{"rendered":"\n

This\nyear will go down in history for the biggest crisis the world has had to face\nin the last several decades. The coronavirus pandemic has had a sweeping impact\nacross the globe, with millions testing positive and millions of livelihoods\nimpacted. <\/p>\n\n\n\n

Meanwhile,\nthe world is experiencing an economic\ncrisis of mammoth proportions. India is not exempt, and if the latest\nS&P Global Ratings were to be considered, India\u2019s economy is expected to\nplummet by 5 per cent in the current financial year. Earlier, in May, Moody\u2019s\nInvestors Service pegged the country\u2019s growth projection at 0 per cent for the\nfinancial year 2021. <\/p>\n\n\n\n

A\nRs 20-lakh crore stimulus package, focusing on self-reliance called the Atmanirbhar\nBharat Abhiyan, has been announced in India, in an attempt to revitalise all\nsectors and sections of society from small businesses to agriculturists.<\/p>\n\n\n\n

However,\nthe question on most minds is: will the pandemic cause a doomsday scenario for\nthe Indian economy or will there be hope yet? In fact, there is a lot to be\nhopeful about and the crisis could be a once-in-a-lifetime opportunity for\nIndia and for the individual investor\nin the country. Here\u2019s how:<\/p>\n\n\n\n

The crisis is a chance to capture global supply chain<\/strong><\/h2>\n\n\n\n

Ever\nsince the coronavirus pandemic was first reported late last year, it is no\nsecret that the world\u2019s trade with China has suffered a huge blow. The global supply chain has\nbeen impacted; recent reports suggest that the US import from China has seen a\nsharp drop during its lockdown. In fact, imports by the US from China had\nalready taken a hit before the pandemic — the health crisis only exacerbated\nthe situation. There were trade stand-offs over import tariffs between the two\ncountries. According to a Harvard Business Review (1)<\/sup> report on the global supply chain,\nIndia could emerge as the preferred choice for US firms that have been looking\nat alternatives for China. The HBR report also says that there could be a shift\nin bilateral goods trade between India and the US. <\/p>\n\n\n\n

With\nIndia boosting its Ease of Doing Business and bringing in labour reforms as\npart of the recently announced stimulus package, the country hopes to attract investments and ramp up\nits supply chain creation. <\/p>\n\n\n\n

US India Strategic and Partnership Forum (USISPF) President Mukesh Aghi has recently been quoted in newspaper reports (2)<\/sup> as citing Facebook’s recent USD 5.7 billion investment in India\u2019s Jio as a reflection of foreign investors\u2019 faith in India\u2019s future as a growing and strong economy.<\/p>\n\n\n\n

<\/p>\n\n\n\n

\"Boost<\/figure>\n\n\n\n

(Source:ET*)<\/p>\n\n\n\n

Time to boost smartphone manufacturing and provide an alternative to China<\/strong><\/h2>\n\n\n\n

Although\nChina is a major player in the smartphone market, accounting for nearly 70 per\ncent of exports in the smartphone sector worldwide, India is trying to get a\nfoothold. India\u2019s phone exports for the financial year 2019-2020 crossed over\n3.5 crore units, doubling numbers from the earlier year. The country\u2019s\ncontribution to the global market for smartphones has gone up to 16 per cent in\n2019 from a mere 9 per cent in 2016. Phone makers are now looking at countries\nother than China. Tech firm Apple is now looking at moving nearly one fifth of\nits capacity from China to India. The company plans to produce smartphones\nworth nearly $40 billion in India, largely aimed at exports.<\/p>\n\n\n\n

It helps focus on agriculture, which is India\u2019s backbone<\/strong><\/h2>\n\n\n\n

In\na post-Covid economy, India has an opportunity to beef up its agri sector. With\nover 60 per cent of its population directly or otherwise dependent on\nagriculture, India is the world\u2019s biggest producer of pulses, jute and milk.\nIndia is also a key exporter of rice, honey, meat and tea, among others. In a\npost Covid world, the world will rely less on China for agricultural produce\nincluding tea, and look at other countries, and this is where India can make it\ncount. There could also be interest from other countries in India\u2019s processed\nfood. <\/p>\n\n\n\n

Also,\nthe agricultural reforms announced by Finance Minister Nirmala Sithraman\nrecently will ensure deregulation of produce such as edible oils, pulses,\nonions and oilseeds. The reforms will ensure opening up of the markets and welcome\nprivate investment.\n<\/p>\n\n\n\n

<\/p>\n\n\n\n

<\/p>\n\n\n\n

\"Reforms<\/figure>\n\n\n\n

<\/p>\n\n\n\n

All this means that the economic crisis actually presents an opportunity for individual investors as well. If you are a new investor, this may be a good time for you to invest in mutual funds that ensure diversification and minimisation of market risks. Investing in mutual funds is stress-free as professional fund managers with experience manage your portfolio. A systematic investment plan (SIP) is an appropriate option for these times. Explore the Moneyfy’ sip app<\/a> from Tata Capital and find top-rated funds for your investments. The user-friendly app helps you invest on the go.<\/p>\n\n\n\n

Additional Read:<\/strong> How Can You Protect Your Wealth\nin the Midst of an Economic Downturn?<\/a><\/p>\n\n\n\n

In conclusion<\/strong><\/p>\n\n\n\n

Even as global numbers of infected people rise, and the world faces an economic crisis, it helps to remember that in every crisis lies an opportunity. For India as a country and an individual investor, this may be a time to focus on our strengths and use them to leverage the crisis. Explore Tata Capital for a range of investment opportunities and advisories from experts and make an informed choice.<\/p>\n\n\n\n

Download the App<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

This year will go down in history for the biggest crisis the world has had to face in the last several decades. <\/p>\n

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