IMPACT OF COVID-19 PANDEMIC ON INDIAN MSME SECTOR

Abstract

The world is battling with modern horrors like the COVID-19, which has left the entire world befuddled and in the lurch as to how one virus has brought the entire world to a standstill. This devastating virus which is declared by the WHO as the pandemic has taken over almost 195 countries in its grip.

This virus is mounting a very serious threat to the global economy as well, which is already in grave peril. There is no doubt that the Indian economy, which is already sputtering, is growing at one of the lowest rates in the last six years. And now, a new set of economic challenges unleashed by this virus is leaving many sectors in tatters.

It is a well-known fact that in the global supply chain, China plays a very pivotal role for India and its MSME sector as well, this sector is largely dependent on China for its raw material. For example, Indian drug makers source almost 70 per cent of their ingredients from Chinese factories and Chinese goods worth $30 billion. Thus complete lockdown of China and partial lockdown of India has led to various issues ranging from shrinkage of exports, cessation of production, non-availability of manpower, the uncertainty of consumption, and liquidity squeeze in the market as well.