‘COVID outbreak to have limited impact on India’

NEW DELHI: The coronavirus outbreak will have a limited impact on India but the global GDP and trade will definitely get affected due to the large size of the Chinese economy, RBI Governor Shaktikanta Das has said.

Only a couple of sectors in India are likely to see some disruptions but alternatives are being explored to overcome those issues, he said.

The deadly virus has brought a large part of the world's second-largest economy China to a standstill and its impact has been felt across industries.

India's pharmaceutical and electronic manufacturing sectors are dependent on China for inputs and they may be impacted, Das said. "It is definitely an issue which needs to be closely monitored by every policymaker whether in India or any other country. Every policymaker, every monetary authority needs to keep a very close watch. So coronavirus issue needs to be closely watched," he said.

A similar problem, perhaps on a lower scale, occurred last time during the outbreak of Severe Acute Respiratory Syndrome (SARS) in 2003, he said adding the Chinese economy had slowed down by about 1% during that time.

At the time of SARS outbreak, China was the sixthlargest economy and accounted for only 4.2% of the world's GDP. While, the Asian giant is now the world's second-largest economy, accounting for 16.3% of the global GDP, therefore, any slowdown in the Chinese economy would impact the global economy.

The RBI governor said that the coronavirus outbreak appears to be larger than SARS and this time China's share in world GDP and world trade is much higher.

“So, the coronavirus will definitely have an impact on the global GDP and global trade," he said adding that every major economy today will have to be very careful and must monitor the situation closely.