Page 12 - newsletter 14 aug

Impact of COVID-19 on Foreign
Trade Mansi Jain, XII C

Covid's effects cut across many aspects of international trade including supply chain management,
manufacturing, sales, importing and exporting customs and logistics. Lockdowns, grounded flights,
halt on trade activities has shaken the world economies.
WTO has stated that world trade is expected to fall between 13% and 32%in 2020 as the COVID-
19 disrupts normal economic activity and life around the world.Demand for many commodities
including petroleum has been falling rapidly which may create a balance of payments problem in

Latin America and Africa who rely on exports of these commodities.
The world is likely to see currencies devalue and if the crisis continues for longer, countries will face
difficulty in selling their products and services for which markets will have collapsed.
Sharad Kumar Saraf, President of The Federation of Indian Export Organisation does not
expect merchandise exports to top $300 billion this financial year.
Pharma exports in India which accounted for $20 billion have been hit by the snapping of raw
material supplies from China, while the jewellery and diamond exporters face an even sharper
disruption.India is among the 15 most affected economies due to the corona virus epidemic and slow
down in production in China with trade impact of $348 million.
Indian import sector registered negative growth during COVID-19 pandemic which includes gold,
silver, electric goods, transport, equipment, machine tools, iron and steel, coal, petroleum and
chemical.India’s export sector is likely to face nearly 10% dip this year.

The shipping sector has suffered enormously
and is dealing with the multitude of problems.
Apart from the depressed supply and demand
globally, shipping lines have also been forced to
alter their ports because of corona virus related
restrictions imposed by multiple countries.
The airline and travel industry has been
reeling from the impacts of virus which has led
to rise in the cost of freight even for the delivery of
essential goods. Cost of freight from India to USA
has shot up from $3-5 per kg to $10-12 per kg.

India has to turn crisis into
opportunity for creating an
“Atmanirbhar Bharat” and take
steps to ensure that product
which we import from elsewhere
are manufactured in India. Foreign
secretary Harsh Vardhan Shringla
has also emphasised that this I n t e r n a t i o n a l t r a d e i s t h e
phenomenon provides India with b a c k b o n e o f o u r m o d e r n
c o m m e r c i a l w o r l d . I n g l o b a l
an opportunity to develop itself
e c o n o m y n o n a t i o n i s s e l f
into a low cost manufacturing hub
s u f f i c i e n t , w h i c h i s a s s o c i a t e d
which will position India as the
w i t h s p e c i f i c f l o w o f g o o d s ,
preferred investment destination.
p e o p l e a n d i n f o r m a t i o n . E a c h
n a t i o n i s i n v o l v e d a t d i f f e r e n t
l e v e l s i n t r a d e t o s e l l w h a t i t
Global markets are in a freefall with supply chain disruption p r o d u c e s o r a c q u i r e s w h a t i t
and manufacturing falling to the lowest levels in decades. l a c k s .