Chennai: In the wake of Coronavirus impacting global trades, India has steadily witnessed a convulsive effect in its markets as the economy is widely dependant on Chinese imports. According to World Bank, China is the worldâs second largest economy accounting for around 16 per cent of the globe. As per the WTO (World Trade Organization), it ranks first in global merchandise exports and second in world merchandise imports. Chinaâs merchandise export share in total world exports was 12.8 per cent in 2018 while its share in imports of merchandise goods was 10.8 per cent. But with the deadly disease spreading in this important market, it has left many traders across the world worried.
Worried traders
Here in Chennai, Ritchie Street has been the go-to place for electronic products. Coronavirus has blowed the business of shopkeepers here as the shortage of Chinese imports have left them face an unseen situation. ‘The electronics industry which primarily depends on Chinese products and components is severely affected. If no solution is found, both manufacturers depending on Chinese components and consumers will suffer,’ said the secretary of Chennai Electronic & Infotech Traders Association (CEITA), R Chandalia. ‘Now traders may be forced to import high cost products from other countries like Vietnam, Taiwan, Japan or other European countries at higher prices.’
Slash import duties
Experts talk about the urgent need to reduce tariff on foreign imports and tax on machinery and electronic goods. Chandalia says, ‘There is a shortfall of ‘goods from China like TV, laptops, mobiles, and electronic parts like capacitors, integrated circuits, cables which are used by manufacturing units in India.’ The effect is already visible as prices have started to increase across the market. ‘The government should remove higher import duties on certain products, primarily imported from China, but available in other countries,’ Chandalai added. ‘Electronics industry is the backbone of any developing country. We request the government to support by reducing import duty on primary products and reduce taxes and bring all products in the lowest slab to benefit consumers.’
Create effective policies
The lack of supply has left traders concerned. Business analysts predict that there could be a steep increase in the price of electronic goods to sustain themselves. According to analysts, the price of stock electronic goods may rise 20-40 per cent of the current price if import do not resume. Experts also speak about need for government in emerging Asian nations to create policies that ensures zero economic ripple effect due to the virus as many people’s livelihood depends on India and China’s trade relations.