In response to a surge in respiratory illness cases in China, Indian exporters are closely watching the situation and expressing concerns about potential repercussions on trade if the situation worsens. As China is India’s largest import partner, with many industries relying on raw materials from the neighboring country, a further deterioration in the outbreak could significantly impact trade. This apprehension arises at a time when global trade has already slowed due to geopolitical tensions and macroeconomic factors.
Last Tuesday, the World Health Organization (WHO) raised the alarm on the spread of respiratory illness in China after a report by the Program for Monitoring Emerging Diseases (ProMED) highlighted the existence of clusters of undiagnosed pneumonia in children. China is India’s fourth-largest export destination, and any disruption in their economy due to the outbreak could have wider implications.
To aggravate matters, China, the world’s second-largest economy, is already grappling with a crisis in its real estate market and experiencing a slowdown. Ajay Sahai, director-general and CEO of the Federation of Indian Export Organizations, emphasized the seriousness of the situation, particularly for sectors like iron and steel, aluminum, copper, marine, and certain agricultural commodities.
Arun Garodia, chairman of Engineering Export Promotion Council India, warned that the impact of the outbreak on India’s trade with China could begin as early as next month. The decline in India’s exports to China suggests an already struggling Chinese economy. Sectors such as engineering goods and textiles may suffer as machinery, industrial equipment, pigments, and paint tools are imported from China.
Indian exporters are cautiously monitoring the evolving situation in China, as the trade implications could be considerable in the coming months.
