COVID-19 Challenges for the Indian Economy: Trade and Foreign Policy Effects
- Jan 2020
- Research and Information System for Developing Countries (RIS)
- India
The Indian economy has been hit hard by the ongoing Coronavirus pandemic-driven global crisis. The entire world is passing through great uncertainty. There are, primarily, two major challenges that the Indian economy is facing at this juncture. First is to save the country from the spread of Coronavirus (COVID-19), which is a health emergency. Saving lives is the most important, the principal concern of the government. Second is to save the economy from the unfolding economic uncertainty due to the dual effects of the Coronavirus pandemic and the global and national lockdown. Many economies may face negative per capita income growth in 2020 due to the Coronavirus pandemic, according to the International Monetary Fund (IMF). In its recent forecast, the World Trade Organisation (WTO) indicated a clear fall in world trade between 13 per cent and 32 percent in 2020, perhaps the highest fall since the Great Depression of the 1930s. In its recent World Economic Outlook, the IMF projects growth of the Indian economy in 2021, at a rate of 7.4 per cent. This Report presents commentaries written by 40 research scholars, professors, economists and practitioners on trade and foreign policy challenges posed by the COVID-19 crisis and the way forward. In particular, it covers three important issues: (i) what is the magnitude of the impact of the crisis on Indian economy – is it shallow or deep, and the scope to rebound, particularly India’s exports; (ii)India’s immediate challenges in managing the recovery; and (iii) the longer-term structural challenges of the Indian economy. Each chapter of this report has outlined key recommendations to navigating through the present crisis and the policy responses.
