India Inc in preventive mode to shield against COVID-19 outbreak

NEW DELHI: As the deadly coronavirus continues to spread its tentacles in the country with the case count touching 73 in India on Thursday, companies, big and small, are voluntarily shutting down discretionary economic activities as part of the initial healing process. Notwithstanding the economic consequence, corporates, especially in the services sector, are asking employees to work from home and restricting non-essential travel.

The manufacturing sector is still scrambling to take adequate measures other than the vanilla safety and preventive measures, since staying home is impossible for its workers. Companies such as Flipkart, Paytm, Toyota Kirloskar Motor, Tata Consultancy Services, SpiceJet, HSBC India and Nestle have put in place protocols to lessen chances of employees catching the disease. Many have also warned investors of the virus threat, pose and anticipated a logical earnings hit in the quarters to come. 

“Each geography has to determine if they will encourage visitors or not,” said Hitendra Dave, head of global banking and markets, HSBC India. “Any travel that has to be undertaken now requires a higher level of approval… A lot of road shows are now phone shows,” he said. Among the worst hit is the travel, tourism and aviation sector. Suspension of visas has left many stranded in the throes of uncertainty. “The ban on travel to India for a period of one month will have a cascading economic impact on the hotel, aviation and travel sector and is estimated to cause a direct loss of an estimated `8,500 crore,” said Rajesh Mudgill, secretary, Indian Association of Tour Operators.

Tech firms are also forced to adapt remote work. So far, companies have cancelled at least 12 high-profile conferences, causing an estimated economic loss of $1 billion. To name a few, IBM’s Think, Facebook’s F8, and Google I/O, which were all slated for May, have been called off. To minimise mass gatherings, smartphone manufacturers such as Xiaomi are also sticking to online-only launch events. Fear of contracting the virus has already slowed down social activities like shopping or dining out. Multiplex in a few states will remain shut till March 31.

In India, infections have been relatively less, but companies are grappling with supply constraints because of their heavy reliance on China. Many are looking at ways to reduce dependence on China. However, the crisis in China presents an opportunity for India as an alternative supply-chain market, particularly for electronics manufacturing and auto components sector, but in the long run.

Airline industry seeks govt support
The pandemic could bring Indian travel, tourism and aviation industries to a halt within next 10 days, especially with the government suspending visas for a month, fear industry leaders. Indian Association of Tour Operators, and Assocham, foresee job losses as firms try to tide over the situation. They have called for the government to review the decision to suspend visas for a month and allow inbound travel via limited gateway cities.