Impact of COVID-19 pandemic on small and medium business in india

Covid-19 epidemic

The Covid-19 epidemic is one among the main disasters within the history of pandemics. The impact of corona virus pandemic is extremely disturbing and it’s spared nobody with its ill effects. There has been a serious increase within the death rates across the planet . Not only people are losing their loved ones but they’re also losing their jobs and their source of income. Economic activities of quite 100 countries are affected and a few of the countries have even asked for monetary help from IMF.

Impact on Economy of India:

India may be a developing economy and after the Prime Minister Narendra Modi had announced 21 day lockdown for the security of individuals , the country has observed a high unemployment and economic depression. India has observed an excellent decrease in growth of the income and government revenues because the novel corona virus hits economic activities of India as an entire . consistent with a recent study the country has observed employment loss of 40 million people, majorly within the unorganized sectors.

Schools and colleges are shut down; sports events like IPL are postponed, businesses across the planet like entertainment, hospitality, aviation, restaurants, hotels, pubs, malls, transport and factories have also faced major negative impacts in terms of their economy. thanks to the fear of corona virus people weren’t going out of their houses even to shop for daily necessary items, of these have somewhere contributed in affecting the economy.

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There has been a cut within the global growth from 2.9% to 2.4%, and it’s going to fall as low as 1.5% consistent with the Organization for Economic Co- Operation and Development (OECD).

The lockdown in India will have a serious impact on the consumption level which is that the main element of GDP. there’ll be an interruption of worldwide trade and provide chain this may majorly affect the countries that are strong exporters and also those countries which are importers.

  • Total electronic import of India is adequate to 45% that of China. India imports approximately two-fifths of organic chemicals and one-third of machinery from China along side automotive parts and fertilizers.
  • Also approximately 90% of mobiles and 65% to 70% of active pharmaceutical ingredients are imported from China to India.

There will be an expected global trade fall up to 32% within the year 2020 consistent with the planet Trade Organization (WT0).

Sectorial Impacts:

Labour sector:

  • This sector is that the worst impacted as most of the labourers lost their jobs as most of them were engaged in construction companies and were daily wage works.
  • Quarantine and travelling restrictions have left Indian factories in need of labours.
  • The country has seen people moving from urban areas to rural areas.


  • According to the NRAI which represents may restaurants have advised its restaurants to pack up . Also all the restaurants, clubs, pubs, cafes are pack up consistent with the orders by the govt . Also orders on online food delivery platforms like zomato and swiggy have experienced a serious fall of about 60% during the pandemic.

Food and Agriculture:

  • This sector contributes majorly in GDP to the utilization sector. the availability of food and agriculture products like dairy products, edible oils and cereals are going to be highly affected this year.
  • The Agro- chemical companies which affect the import of raw materials and export for finished goods also will be affected.
  • The online food grocery also suffers an excellent loss thanks to the shortage of delivery vehicles.
  • There has been a serious loss within the consumer demand for commodities like sea food, grapes and mangoes.

Online business:

  • This sector contributes 10% to the Indian GDP and its major segments are healthcare, household and private care products, and food and beverage sector.
  • Due to the fear of corona virus people are avoiding to stock essential commodities like rice, flour and lentils thanks to which their is rise within the sales of FMCG companies which saw it fall in trade thanks to disrupted chain supply.


  • This sector contributes 305 to 35% to the Indian GDP. Maharashtra, Tamil Nadu , and Madhya Pradesh have the very best number of registered MSME’S consistent with an estimated study by AIMO 1 / 4 of over 75 million is facing closure and if the closure still continues for four weeks then if will affect the utilization of 114 million people affecting the GDP.
  • Garments, consumers goods, logistics have faced a decrease within the business and therefore the MSMEs engaged remains functioning but is probably going to isolate thanks to the purchasing capacity and plunging liquidity constraints.
  • Since most of the MSMEs depend upon the loan funding from the govt , there has been a relief since the RBI had announced a 3 months repayments of loans and reduction within the repo rate.

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Stated above are a number of the negative impacts that the corona virus has on the economy of India. But this pandemic has all taught us many things. Many Multi National Companies have now shifted from physical to online platforms. People have now started performing from home. The digital world got a push during this pandemic as people have now started using apps like PayTM, Google buy the payment rather than using cash. the faculties and colleges have now started operating online on zoom meeting, Google meets and Google classrooms. Students are now ready to access their assignments online and that they can now give their exams online through various platforms. This crisis also highlighted the importance of investing in technologies and like cloud data, self service capabilities, e-business, e-governance and cyber security.

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