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India and the impact of coronavirus

Gautam Verma
Gautam Verma
Head of South Asia, Refinitiv

The impact of coronavirus has caused distress to economies and businesses around the globe. India’s economy, which was already under pressure, seems to be at a critical juncture with the central government announcing a three-week lockdown with less than four hours’ notice, followed by a further extension until at least 3 May.  While the true extent of the coronavirus crisis is uncertain, this blog explores the early impact of the pandemic on the Indian financial markets as well as measures that Refinitiv in India has taken to fight coronavirus and support the communities most affected by the pandemic.


  1. The past few weeks have seen coronavirus dominating Indian boardrooms and newsrooms alike as COVID-19 cases rapidly rise with India crossing the 31,000+ mark (i.e. at the time of writing).
  2. As the world’s fifth largest economy by GDP, India has been reeling in some distress over the last few quarters. India’s GDP slumped to 4.7% in the third quarter of FY 2019-20, the lowest rate of growth over the previous five years.
  3. Refinitiv’s Corona Virus app in Eikon continues to be a single destination to keep track on the key market moving headlines as well as the charts, data and impact analysis on the markets, sectors and commodities asset classes.

With a 1.3 billion population, the “world’s biggest lockdown in history” is happening right here in India. That’s one-fifth of the world’s population essentially in extended confinement in order to protect millions from infection. Not only is India the largest country going through a full lockdown, but it also has some of the strictest measures implemented by any government.  As implausible and an uphill task as it may seem, India is doing all it can to flatten the curve and slow the spread of this deadly virus.+

The past few weeks have seen coronavirus dominating Indian boardrooms and newsrooms alike as COVID-19 cases rapidly rise with India crossing the 31,000+ mark (i.e. at the time of writing). The global pandemic has been wreaking havoc for weeks, throwing nations and businesses into disarray; showing no signs of ebbing.

Coronavirus and manufacturing

Refinitiv data reflects that manufacturing production across affected economies, especially China, has dramatically slid into negative territory. India witnessed a surprisingly positive twelve-month manufacturing trend in February 2020 compared to December 2019, but until then, the impact of the pandemic had not yet hit home. It will be fascinating to observe the change in pattern over the next couple of months.

Indian GDP in doldrums

As the world’s fifth largest economy by GDP, India has been reeling in some distress over the last few quarters. India’s GDP slumped to 4.7% in the third quarter of FY 2019-20, the lowest rate of growth over the previous five years. With a decline in private investments and domestic consumption, India’s GDP has now been further exacerbated by the pandemic.

With the Prime Minister announcing a complete lockdown for 21 days, the GDP growth rate was estimated to decline to a little above 2%. However, with the central government extending the lockdown until May 3, India’s GDP growth rate may dip to 0%, as per analyst estimates. The International Monetary Fund (IMF) in its recent projections has estimated a 1.9% growth rate for India. India and China are the only countries projected to potentially register positive growth in 2020.

Turmoil in auto, hospitality and aviation

Sectors in India such as auto, hospitality and aviation have been massively affected due to the lockdown. While the auto sector was already reeling under great stress with a consistent quarter-on-quarter decline; the impact of the pandemic has sharply hit auto and auto ancillary manufacturers as production has come to almost a standstill due to the lockdown.

Hospitality and aviation, including tourism have witnessed sharp declines in March 2020 as countries and businesses have had to restrict travel.  The months of February to May which are peak traffic and high-sales volume months for tourism have been severely impacted. Near-term consumption demand for these three sectors will be further muted as consumers become conscious of discretionary spending and will be averse to immediate travel decisions.

Turbulent Indian equity markets

The impact of the coronavirus had an immediate impact on international financial markets. The tremors were felt in the India equity market too.  Uncertainty created by the virus has led to panic amongst investors. The volatility in the equity markets has resulted in the Nifty 50 and BSE Sensex losing 23% each in March alone.

What truly is an interesting phenomenon though is that the Equity Index, when compared to the previous financial crisis in 2008, mirrors the current trend we are witnessing now. If we use historical data and data modelling, India’s financial markets could be expected to bounce back within the next six months.

Increasing Bond Yields send panic

We are also experiencing a downward trend with interest rates and bond yields which are drifting lower.  The 10-year benchmark bond yields (in the chart below) have fallen to 6.1%. However, India’s bond yields continue to look attractive as compared to other countries. The massive stimulus injected by Central Banks has helped ease bond yields in the short term. However, bond markets risk seeing a spike in yields over concerns on the government’s fiscal situation.

Navigating the impact on India’s economy and financial markets

To help our global clients obtain the data they need to manage and understand the current turbulence in the financial markets and global supply chains, Refinitiv’s Corona Virus app in Eikon continues to be a single destination to keep track on the key market moving headlines as well as the charts, data and impact analysis on the markets, sectors and commodities asset classes. If you’re an Eikon user, simply search for ‘Corona Virus’. If you’re not a user, get access now or switch to Eikon.

Our People and Our Business

Refinitiv in India is taking prudent actions to safeguard the health and well-being of our 5500-strong workforce while keeping our customers serviced with our unwavering support.

Now more than ever, safety and caring of our people comes first.  Across our offices in India, we are working hard to do all that we can to help flatten the curve. While ensuring employee safety, we quickly tested our robust business continuity capabilities and put plans in place to provide our customers with data, technology and expertise to help them navigate the impact of the pandemic and devise quick business strategies.

On March 19th, 2020, we were able to quickly assemble a ‘Virtual Office Environment’ in under 48 hours to ensure social distancing. With the safety of employees top of our mind, we were geared to achieve a 100% work from home capability during the early days of the pandemic in India, well ahead of the lockdown announced by the central government.

From team building activities like fitness challenges to sharing our favorite work from home moments to hosting virtual town-halls and e-counselling sessions, we continue to focus on virtual learning sessions, initiatives that encourage positive thinking, and adding a fun quotient to our remote workplace.

Caring about communities where we operate in India

The scale of the COVID-19 pandemic is displacing societies and people under tremendous pressure. The ongoing lockdown has affected the lives of some of the most vulnerable communities across the country, such as daily wage earners and migrant laborers.

I am proud of the humble act of our India colleagues who have voluntarily donated one day of their own salaries to cushion the impact of the crisis on these sections of the community and to ensure their continued access to essentials. We are happy to announce that, Refinitiv India will provide a matching grant to our NGO partner, Akshaya Patra who will use this contribution to provide meals to close to 100,000 migrant workers and low-income households.

Our team in Bangalore, through our NGO partners, are also directly supporting 1000 families, migrant and daily wage workers and people from economically backward sections with dry ration kits.  Through another non-profit, our team has provided personnel protective equipment (PPE), face masks, sterile gloves and hand sanitizers to the frontline medical staff at three government hospitals and to as many as 5000 Bangalore City Police personnel who are on the frontline maintaining law and order and getting citizens to adhere to social distancing and lockdown guidelines.

We sincerely hope that our ongoing contributions will help their efforts and those who need assistance as communities come together to defeat COVID-19.

This health crisis is truly unprecedented, and it is nothing like we have experienced before. As countries, businesses come together to develop resistance mechanisms and face the eye of the storm; we can only hope we emerge stronger as we overcome this phase of our new history.

Source: All the data is sourced from Refinitiv DataStream, unless otherwise stated.

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