A month into the world’s largest mandatory lockdown, India so far hasn’t seen the exponential spike in COVID-19 cases that worried epidemiologists in a country with a large, dense poor population unable to practice social distancing.
About two weeks behind the U.S. in terms of first reported case, the nation of 1.2 billion people is now about on par with the state of Georgia (population 10 million) with around 20,000 cases and 645 deaths. Maharashtra, the state where the financial and entertainment capital of Mumbai is located, has so far been the epicenter.
Why the relatively slow progression? Perhaps because the virus arrived later than in other places, and a 21-day lockdown initiated on March 24 and extended through May 3 has helped stem its spread.
Or, some experts caution, India has simply yet to ramp up to its peak, and testing has been insufficient. Only time will tell.
How things pan out on the economic side is also an open question, though voices in Atlanta were optimistic that measures taken by the Indian government could soften the blow to an economy that is already feeling “acute pain” in some sectors like aviation — where planes have been grounded — and textiles, where 9 percent of the nation’s economic output is at stake.
Two weeks in, Anil Khatod, managing partner at Argonaut Private Equity in Atlanta, said the lockdown had wiped out an estimated $90 billion in activity and that this could plausibly grow into a $150-$250 billion hit, just for the first phase.
As for stimulus, $22.6 billion had been disbursed by the government to help poorer populations get access to food and cooking oil. Plummeting sales for small businesses raised the prospect of a credit crisis, as banks were already struggling due to non-performing loans, Mr. Khatod said.
“I believe what is really required is a second stimulus in India — and there is a possibility of a much larger stimulus in the coming days and weeks,” he added during a webinar organized by the Georgia Indo-American Chamber of Commerce.
As if on cue, the Reserve Bank of India in the ensuing days cut rates, deferred debt payments, injected $50 billion in liquidity into the economy and made $6.5 billion available to prop up non-bank financial companies. Plans to get more money into the hands of businesses are still being debated.
Uday Ved, India tax partner for accounting and advisory firm KNAV P.A., said the government had provided tax breaks to large companies to the tune of $18-$20 billion already, which combined with the food aid would bring the government’s contribution to the recovery over $40 billion.
He added that the government raised the threshold for outstanding debts qualifying for liquidation from about 100,000 rupees to 10 million.
While “this quarter is effectively lost,” Mr. Ved believed that India would bounce back relatively quickly and still post positive GDP growth for the year at around 2 percent, down from earlier estimates of 5-plus percent. The International Monetary Fund this week put its 2021 forecast for India’s economy at 7.4 percent, with a big assumption: That it gets COVID-19 under control in short order.
“I believe that the future for India is really good,” Mr. Ved said.
That’s especially if India can take advantage of tension in the U.S.-China relationship over the origins of COVID-19 and the expected reorientation of supply chains as manufacturers question their reliance on China for sensitive products.
“The question is can India become a really viable second source from the supply side?” Mr. Khatod said on the webinar. “If India can do that I think the opportunity is really quite substantial.”
One question that will feed into this prospect: availability of labor.
Though many have credited the lockdown with curtailing the spread of disease, some have criticized Prime Minister Narendra Modi for leaving migrant workers the unenviable choice of crowding into packed transit stations or walking miles on foot to their village homes. Some worry they will be afraid to return to their former employers.
Sonjui Kumar, an Atlanta-based partner for KPPB Law, who moderated the panel, said that to counter this, some manufacturing clients she’s worked with have continued to provide room and board for migrant workers during the lockdown.
Many Indians working in the U.S. were similarly stranded when flights shut down suddenly; some phoned the Indian Consulate General in Atlanta for clarity about issues like whether there would be evacuation flights or how to send medication to aging or sick relatives back home.
“Do not believe in any rumors — no evacuation is planned, and if it is planned, our advisories will immediately reflect that decision,” Consul General Swati Kulkarni, who is educated as a doctor, said during an April 10 live stream viewed by more than 120 people at once, now with 2,300-plus views YouTube.
The consulate, she said, had been fielding hundreds of calls and emails even after moving to consular services only by mail, noting that consular staff were now serving as “soldiers on the ground” relaying to constituents the evolving guidance from the Ministry of External Affairs as well as the Indian Embassy in Washington.
She said she understands anxiety of those in her jurisdiction and said the consulate was doing its best to respond to inquiries in a timely manner with solid information.
At that point it wasn’t clear whether the lockdown would be lifted, though she stressed that “temporary measures” were necessary to contain the virus.
“If we do anything wrong at this point, all the gains we have made, they will be lost,” Ms. Kulkarni said, urging people to “stay put” as restrictions on commercial flights and foreign arrivals remained in place through the duration of the lockdown.
See below the consulate’s webinar in partnership with SEWA International’s Atlanta chapter, including helplines, contact information and discussions on visa and travel issues: