India COVID-19: Impact Of Pandemic On Key Industries – An Analysis

It is no doubt that the lockdown imposed by the Indian Government, on account of COVID-19, had a drastic effect on the whole country. An economy which was already seeing a decline further plunged as the economic activities got suspended.

Only essential services were allowed to operate; whereas sectors such as agriculture and construction were allowed to function only after proper analysis by the authorities. Financial and employment uncertainties forced several companies to shut down completely. In short, COVID-19 did not fail to leave a scar to the key industries.

CEIC Leading Indicator’s Results

The Indian economy had been growing slowly until November 2019 when it started showing signs of improvements. According to the CEIC leading indicator (a proprietary dataset designed by CEIC Insights to detect the development of significant macroeconomics indicators and point out the areas of improvement for key markets), the Indian economy reached its peak in February 2020, recording a massive 119.7 points. There was a slight ray of hope which got crushed, once COVID-19 came into the picture.

Month in the year 2020

CEIC Indicator

March 2020


April 2020


May 2020


June 2020


We observe that there is a gradual comeback in May and June 2020. However, a sustainable increase in the economic activities is not yet confirmed.

EMIS Trend Deviation Index (TDI)

This TDI is mainly used by the ISI Emerging Markets Group to assess the impact of COVID-19 pandemic on the fourteen key industries of India monthly. There are three levels of effects that have been formed by the EMIS TDI, namely,

  1. Major (shows an index less than 40);
  2. Moderate (shows an index ranging from 40 to 60);
  3. Minor (shows an index greater than 60).

Ms Rohini Sanyal (Indian research Economist) had mentioned that “the recovery is in different degrees for each industry.”

The following table summarizes the impact of COVID-19 on fourteen key Industries of India and their anticipated speed of recovery: –



Level of Impact

Speed of Recovery

1 Agriculture Minor Quick
2 Pharma & Healthcare
3 Banking & Insurance Slow
4 Energy
5 Food & Beverage Moderate Quick
6 Mining & Metals
7 Transportation
8 Chemicals Slow
9 Consumer Electronics Major Delayed
10 Technology, Media & Telecom
11 Infrastructure & Construction
12 Tourism & Leisure
13 Consumer Goods & Retail
14 Automotive

(Source: EMIS)

Analysis at a glance 

1.Industries that have been minorly affected:

  • Agriculture (Quick recovery)- The overall impact has been minor since the agriculture sector was allowed to function from March 28 2020. However, the migration of labourers and supply chain disruptions had caused stress to this sector. Once the relaxations were permitted, the agriculture activities in the country started to improve. This Primary Sector has become a key area of focus for the Government. The Government had lent its helping hand to the farmers (emergency working capital loans) and also contributed to the agricultural infrastructure. A historic amendment was made to the ‘Essential Commodities Act’, which allowed farmers to realize better sales prices;
  • Pharma & Healthcare (Quick recovery)- Disruptions in the supply chain lead to a decrease in the production of pharmaceutical and medicinal products in March and April by 22.5 per cent year-over-year and 53.9 per cent year-over-year (y/y) respectively. However, in May, with the supply chains coming back to normal, the production saw a rise of 2.5 per cent y/y. The Government gradually lifted restrictions on the exports of drugs like the anti-malarial drug, Hydroxychloroquine. Indian herbs-based medicines had picked up the demand.

In July 2020, the Indian Biotech Company, Bharat Biotech, started the first phase of human trials for Covaxin, after securing the necessary government approvals. (Covaxine is India’s first experimental vaccine for COVID-19).

  • Banking & Insurance (Slow recovery)- In March, Reserve Bank of India’s measures to increase liquidity in the financial system enabled banks to be ready to face higher demand for cash in the economy and the moratorium on all term loans. Future still seems unclear on how further loans will be availed by the customers and the assessment of creditworthiness. Insurance companies will be highly vulnerable to the virus, as there are higher claims in the life and property insurance segments along with low demand from the automotive industry. However, the importance of health insurance has increased.
  • Energy (Slow recovery)- There is expected to be a slow increase in domestic electricity consumption coupled with financial difficulties of local power distribution companies. In terms of output of natural gas and petroleum products, the graph returned to growth in May, once the restrictions were uplifted.

2.Industries that have been moderately affected:

  • Food & Beverage (Quick recovery)- Being an ‘essential service’, it was not possible for this sector to remain shut for a long time. Although there is a minor impact, this sector suffered losses due to zero demands from bars, restaurants and similar establishments. The Governmental ban on alcohol resulted in a decline in beverages by 8.7 per cent (y/y) in March and by 93.9 per cent y/y in April. With the relaxations in lockdown and the ban on alcohol being lifted in May, the sector started to recover. The recovery rate increased in June with the increase in exports;
  • Mining & Metals (Quick recovery)- Due to the shortage of workers and lack of demand from key institutional buyers (automotive and constructive sectors), the output of mining products fell by 27 per cent y/y in April and even more by 21 per cent y/y in May. Growth was observed in this sector in June. A steady rise in exports is expected to compensate for the lack of demand shown by the key institutional buyers.
  • Transportation (Quick recovery)- With the nationwide lockdown, the transport of only those passengers and cargo, that were categorized as ‘essential services’ were allowed. Air transportation was the worst-hit, recording a decline in passenger traffic by 99.7 per cent y/y in April and by an additional 97.5 per cent y/y in May. With the domestic flights operating w.e.f. May 25, a slow improvement was observed. In May, Indian Railways launched ‘Shramik Special’ train services to move migrant workers, students and several others who were stranded in different parts of India. Taxis and auto-rickshaws were allowed to operate after May 3. The pandemic had a low impact on cargo movement.
  • Chemicals (Slow recovery)- This sector was highly impacted in April with its output dropping by 55 per cent y/y. Due to relaxations and a comeback in exports, the industry gradually started picking up its pace. The EMIS TDI indicated that the chemical exports were increased by 19.1 per cent y/y in June. A major obstacle hindering the fast recovery of this sector is the lack of proper domestic demand.

3.Industries that have been majorly affected:

  • Consumer Electronics (Delayed recovery)- On being classified as ‘non-essential’, manufactures had to halt the production of several electrical equipments. The output of various such e-products declined drastically in March and April. This sector got a breathing space when the sale of electronic goods were permitted in e-commerce platforms and stores located in marketplaces w.e.f. May 4 (easing of the lockdown measures). The possible inventory pile up and lack of foreign demand are also to be kept in mind by the sector players.

Another notable fact is the promotion of ‘Boycott China’ movement, which has affected this industry big time, in acquiring useful products. Similar alternatives are in the talks to replace the Chinese products.

  • Technology, Media & Telecom (Delayed recovery)- This sector met with ‘mixed’ results. Digital entertainment media services (video games, Netflix and Amazon Prime) gained massive momentum as the need for technology rose with the lockdown. The film and television industry saw delays and cancellation of new projects, whereas the demand for telecom services (fixed broadband) increased during the period. With digitization becoming necessary, companies operating in the banking & insurance, healthcare and retail sectors started accelerating its demands.
  • Infrastructure & Construction (Delayed recovery)- The rural areas allowed the sector to continue its operations, unlike the urban areas due to the lockdown and labour shortage. A delayed recovery is expected from this sector due to three reasons:-

a) Due to unemployment and lack of clarity on earning income, no houses will be purchased;

b) The demand for commercial real estate may reduce;

c) Even during pre-corona, this sector was suffering on account of demonetization, Goods and Services Tax (GST) and mainly the Real Estate (Regulation and Development) Act, which introduced steps to protect the Buyers;

  • Tourism and Leisure (Delayed recovery)- This sector was taken for a down ride with many flight tickets (domestic and international), hotel reservations being cancelled. There was a decline in the visits made by foreign tourists due to the obvious reasons. State Governments continue to extend local restrictions on tourist activities. Uttarakhand was the first state to reopen its borders for domestic tourists on June 8, followed by Goa on July 2 and Maharashtra on July 8. The visitors do have to compulsorily follow specific rules related to the COVID-19 testing to gain access.
  • Consumer Goods and Retail (Delayed Recovery)- Various marketplaces and stores selling non-essential goods were forced to close down. After May 3, there were still slight restrictions in operating these stores to maintain social distancing. Also, consumers started buying only the essential goods. This sector has miles to go before it can stand on its own feet. As consumer demand and their sentiments remain depressed, one cannot see an increase in its sales anytime soon.
  • Automotive (Delayed recovery)- This struggling sector, even before COVID-19 happened, was hit big time by the lockdown. Being a non-essential activity, suspension of its operations led to a drop in the production and sale of vehicles by 33.6 per cent y/y and 41.6 per cent y/y respectively in March and reached zero in April. This sector still continued to be in the low levels in the subsequent months. Inventory piled up during this lockdown period is to be considered as well. With the demand for non-essential goods remaining low, sales are also expected to stay low.

From the above, we can infer that COVID-19 has affected the sectors, and although each industry shows a scope for recovery, it will take time to return to its former position.

Inputs from a webinar conducted by the ISI emerging Marketing group (CEIC Data & EMIS) on July 29, 2020, and the Report based on the webinar.

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