5. ➔ Triggered a deeper recession than that of the 2008-
2009 Global Financial Crisis.
➔ The world is now amid the greatest economic
disruption since the Second World War.
➔ Two decades of economic progress eroded swiftly…
➔ Past laurels will not help…
➔ Need to be prepared for what’s coming…
❖ Covid-19
6. ❖ Fallout
➔ Worldwide disruptions across every aspect of life
➔ Worldwide disruptions in manufacturing, services and logistics
➔ Worldwide recession in economy
➔ Countries are increasingly likely to adopt more and more
protectionist measures
➔ Unprecedented order cancellations upwards of 20-25%
➔ Cancellations close to 50% in certain sectors
➔ Funds being locked up, owing to non-payment of dues by large
buyers in the US,West Asia and Europe
.
7. ❖ India’s GDP to take @ 3% hit
➔ National & Global lockdown
➔ Lower production & supply
➔ Demand drop
➔ Disruption in Supply chain
➔ Health & Safety fears
➔ Trade war & barriers
10. ❏ World trade would take a massive beating especially in non-
essential goods & services
❏ Economic Narcissism will rise & takeover
❏ China’s global economic emergence is inevitable
❏ De-Risk, Realignment & Redesign in Global Supply Chain
❏ Paradigm shift in production, service sectors & trade
❏ Consumption and demand patterns will be volatile and ultimately
change
Key Insights
11. ❏ World trade would take a massive beating especially in non-essential
goods & services
★ Unemployment globally is at its peak, and future is uncertain, forcing people to cut
short on their spends, changing consumption pattern, leading to dip in demand
★ Fear of uncertainty has led people to hoard globally, especially the essential goods,
leading to shortages in supply, and amidst lockdowns and disruption of supply
chains the shortage is leading to price rise
★ Large scale shutdowns and bankruptcies would be witnessed globally and any
other major shock is going to be detrimental for world economy, especially in
banking & financial sectors
★ Fall in stock markets, oil prices and currencies will lead to liquidity crunch and
increased debt burden
12. ❏ Economic Narcissism will rise & takeover
★ In last One and half decade, China became the factory of the world, with every
major company being dependent upon it, one way or the other. It became a major
part of global supply chain.
★ China benefited tremendously and other nations started losing due to trade
disbalancing
★ Dubious Chinese laws and weak control on Intellectual properties led many
companies to lose their critical advantage
13. ❏ China’s global economic emergence is inevitable
★ China accounts for 17% of global GDP, 11% of world trade, 9% of global tourism
and over 40% of global demand for some commodities
★ It has a large domestic base, with improving living standards and appetite for
consumption
★ China had been ahead in the curve, not only it has weathered out the pandemic, it
has prepared itself to benefit from it. When other nations would be fighting to stay
safe, China would be in advantageous position and prepared to fulfil demand
supply gap
★ Government supported, well-aligned, start-to-finish and modular industry chain
allowed companies to rapidly change processes and produce new product types
while absorbing large-scale changes to volume, capacity or capability
15. ❏ De-Risk, Realignment & Redesign in Global Supply Chain
★ In the wake of the coronavirus, the most-affected countries are the ones closely
integrated commercially with the Chinese economy; that the global economy will
take a beating; and that the global value chains (GVCs) will have to rethink their
future strategies.
★ Traditionally, the cost, quality and delivery were key metrics when developing
supply value chains strategies yet the recent crisis has shown, global events caused
by pandemics, natural disasters, climate change and geopolitical tensions, can
create significant disruption to the reliable supply of parts or products.
★ There is a need to develop new business strategies in future supply chain designs.
The KPIs to be considered for future supply value chain designs will likely contain
both traditional metrics, and new performance measures including resilience,
responsiveness, and reconfigurability (3Rs).
16. ❏ Paradigm shift in production, service sectors & trade
★ Key sectors that saw growth were Gems & Jewelry (13.3%), Trading & Logistics
(35%), Leather & Footwear (15%), Non-Conventional Energy (47%), Textiles &
Garments (17.6%), these sectors will see major disruption and reduction in
demand, except for Non-Conventional Energy. Though pharmaceuticals, medical
devices and equipments, along with other essential products and services will
witness growth, this year
★ Service sector primarily led by IT/ITeS services have grown traditionally and the
same trend continued by growth of over 23%. Hospitality, tourism, aviation
industry and other similar services contracted by more than 90% in last 3 months.
★ Going forward Health and safety factors would take precedence over everything
and will alter the way we produce, pack, transport or serve
17. ❏ Consumption and demand patterns will be volatile and ultimately change
★ Sustainability, Environment, Health, Energy Personalisation and Security will take
precedence over current mass consumption trends
★ Unemployment, longer duration of uncertainty, limited availability of cash in hand
etc. leads to panic and changes consumption patterns leading to hoarding of
essential goods, thus rise in its price and unavailability
★ Postponement to spend on non-essential goods, thus bringing steep decline in
demand and resulting in closures of many firms dealing in same, resulting in layoffs
18. Immediate Goals
➢ Policy for operations units catering to or providing essential services under
strict containment approach
➢ Need of a clear yet gradual exit policy post containment period
➢ Introduction of permanent measures to ensure that SEZs and nation are
prepared for such other events or pandemics
19. Conclusion
❖ Research and Development
❖ Recommendations
❖ Fiscal Stimulus
❖ 6 Objectives of stimulus package
20. ❖ Research and Development
➔ SEZs must become the mark of excellence in production, design,
productivity, cost efficiencies as well as identifying and establishing
new trends
➔ Despite all resources and expertise, India lags behind in R&D index
➔ R&D plays a very important role in getting the first mover advantage,
which helps an organisation/ country move up the value chain.
➔ Fiscal stimulus must constitute a fair share for the units in SEZs
setting up R&D centres, common data centres, or testing
laboratories.
21. ❖ Recommendations
➔ Awareness, right diagnosis, prevention, medication, surgery and if
necessary amputations are undertaken by experienced surgeons to
save the life of their patients…the current situation too demands,
immediate relief, intermediate and long term strategy
➔ Bold reforms across the value chain starting with approvals,
clearances, land, labour reforms to attract investment as India
emerges as an alternative manufacturing base.
22. ❖ Fiscal stimulus
➔ Japan offered 1 Trillion USD stimulus package
➔ USA on March 17, the Trump administration proposed a stimulus
package of $1 trillion.
➔ March 13, China's central bank launched $79 billion stimulus effort
➔ Kingdom has sanctioned 330 billion pounds ($424 billion) to fight the
coronavirus pandemic
➔ Italy has announced a rescue package of up to 25 billion euros ($28
billion) on March 16.
➔ Uzbekistan created $1bln special fund ,$3bln loans to the private
sector, $500 mln loan deferrals, bonuses and other financial support
equalling close to 10% of GDP
23. ❖ 6 objectives of Stimulus Package
➔ Develop preventive measures against the spread of infection and
strengthen treatment capacity
➔ Regain economic activities after containment
➔ Protect employment and businesses (formal & informal)
➔ Rebuild a resilient economic structure
➔ Leapfrog to Self-sufficiency (Aggressive push on Infra development)
➔ Enhance readiness for the future
24. Why SEZs?
❖ Foreign Investors who wish to set up new manufacturing units will find the SEZs as
attractive investment hubs
❖ Nearly one -third of Indian Exports are out of SEZs, which now have the potential
to become a strong pillar of the Indian economy and allow integration of
technology and businesses to tap and drive the growth potential of the country
❖ Multi sector Special economic zones offer a true ecosystem of operations
❖ They are located near large metropolitan areas and transport hubs with superb
connectivity domestically and internationally
❖ The facilities are world class, offering manufacturing and warehousing plug and
play solutions with excellent infrastructure, simple and fast start up of operations
and operational flexibility to react effectively in the future
❖ SEZs can promote themselves as a very attractive solution for global businesses
25. What if I need more time to paying my taxes?
❖ If you have temporary financial difficulties and you need more time for
paying your taxes, you can ask for a payment arrangement.
❖ While you have a payment arrangement in force, the Tax Administration will
not send the taxes included in the arrangement to the enforcement
authorities for recovery.
❖ The Government has proposed a legal amendment that lays down
temporary provisions on reduced late-payment interest on the taxes covered
by such arrangements.
