How COVID-19 Has Impacted The Business Environment In India

How COVID-19 Has Impacted The Business Environment In India?

How COVID-19 Has Impacted The Business Environment In India? With the global outbreak of the Novel CoronaVirus, the overall economic structure of the whole world has seen some massive changes. Economists say that the scale of the disruptions caused by this pandemic is so high that it may even take more than 2 years to bring back things to normalcy. 

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According to a recent survey conducted by FICCI and Dhruva Advisors, about 72% of the industries in India feel that the CoronaVirus directly or indirectly has impacted their business. Also, they stated that as India is still battling hard with Covid-19, they do not know how to respond to these massive changes that have occurred in the Indian market. Most of the business owners are dealing with extremely high levels of uncertainty about their future. 

In fact, the condition is such that the Chief Economic Advisor to the Government of India recently stated that we should prepare to face a negative growth rate in the fiscal year 2020-21. He further reported that a relief package of about INR 70 Lakh Crore will be needed to overcome the contractions. 

Major Companies in India like the Aditya Birla Group, Ultratech Cement, Grasim Industries, Tata Motors, etc. have temporarily suspended or hugely reduced their operations. The Fast-Moving Consumer Goods companies are mainly focusing on essential commodities only. Young start-ups are also in trouble as funding has been affected. The stock market in India has never been so low and uncertain. All in all, the point is that the Novel CoronaVirus has taken a toll on the Indian economy as a whole and the next few months will be very significant to India’s growth in the near future. 

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Impact on The Prominent Industries in India 

As we have discussed the overall impact of the pandemic on the Indian economy, let us now analyse the individual impact on some of the most prominent industries in the country that is responsible for the livelihood of the major part of the population. 


A large part of rural India is solely dependent on agriculture for their daily bread and butter. According to sources, due to the lockdown, the farmers were not able to get pesticides and fertilizers for their crops which then of course affects the ultimate plantation. 

Additionally, due to the problems faced in logistics because of the lockdown, the tea estates could harvest the first flush. 

However, agriculture is mainly related to the products which fall in the ‘essential commodities’, so the impact has not been too severe but then indirect effects have been there. 

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Now, this is probably the most affected industry due to the pandemic. Major Indian companies like the Aditya Birla Group, Tata Industries, Larsen and Turbo, Ultratech Cement, Grasim Industries and many more have been forced to suspend their manufacturing operations due to the lockdown. 

Almost all the two-wheeler and four-wheeler productions are shut down and there is uncertainty about when they will start again. The FMCG companies are only focusing on the manufacturing of essentials.

Most of the smartphone producers and electronics manufacturing companies are closed until further notice. 

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Stock Market

On the 23rd of March, the Indian stock market witnessed the worst losses in its history. NSE NIFTY fell 1150 points and SENSEX fell 4000 points. However, on 25th March, when PM Modi announced the 21-day lockdown in India, SENSEX saw its biggest gain since 2011, adding a value of 4.4 lakh crore for its investors. 

As the pandemic is causing the highest damage in the United States, thigs are even worse in Wall Street, so it is obvious that the Indian stock market is impacted by that also. 

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The impact of CoronaVirus on E-Commerce Businesses as been quite huge as only the sale of non-essential commodities is allowed in most parts of India, so the overall sales have been affected significantly. E-Commerce giants in India like Amazon and Flipkart are only focussing on selling basic amenities and the reports provide that there is a surge in the number of orders per day. 

Online grocery stores like Grofers and Big Basket are also getting a lot of orders and the situation is such that people are finding it difficult to get a delivery spot due to the abundance of orders. Zomato, which is a food-ordering app, is also delivering groceries in limited areas. 

This seems to be one of the very few advantages of the lockdown that people are taking the help of online delivery services. Although, for now, the social distancing practise is mainly responsible for the increase in the online grocery orders, but this can be hugely beneficial in the long-term, especially for brands like Grofers and Big Basket. 

E-Commerce businesses are also seeking legal clarity from the authorities about what all things exactly fall into ‘essentials’. 

Matter of Concerns 


The biggest downside of the corona Virus outbreak is that many large companies are left with no chance but to fire their employees temporarily. The unemployment rate of India has drastically increased by 21% since the initial lockdown announcement and the figures are only expected to increase. More than 140,000,000 people have lost their only jobs during the lockdown. 

Industries like Travel, Hospitality, Airlines are ones who are contributing more to the above numbers and the reason behind that is that most of them are on the verge of becoming bankrupt as it has been more than a month since their operations were shut down.


On one hand, a large part of the working population has lost their jobs recently, whereas, on the other hand, many are not receiving their salaries or if they are, deductions are being made. 

The Prime Minister, in his address to the nation, insisted the businesses and the privileged segment of the society take care of the economic needs of their office staff, domestic help and the people who are directly dependent on you. 

The major companies in the country are paying the salaries to their employees but there are certain cuts in the pay. However, the main cause of concern is the small businesses who are now facing difficulties to pay salaries to their staff as the days pass. No matter how hard they try to help their immediate dependents, the money will end soon if things remain the same in the near future. 

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Migrant Workers  

Due to the lockdown, the community that has been hugely impacted is the labour class which earns their wages on a daily basis. Now that there is no work going on, they have no disposable income even to buy necessities and finding it very hard to make ends meet. 

The lockdown has restricted the movement of buses and trains, so the people who came from other states for work are not even able to go back to their hometown. Many of them even travelled for hundreds of kilometres by foot and that too in groups. This defeats the whole purpose of social distancing. 

Although, steps are taken to bring some relief to these people as the Government and many NGOs are supplying cooked food packets and basic grocery items so that at least basic maintenance is not an issue.

Small & Medium-Sized Businesses 

Even if the scale of the losses is very high in case of major companies, they will sooner or later make up for the damage and will continue to run operations smoothly once the lockdown is over because of the monetary backing that they have. 

The real problem here lies with the small and mid-size business owners whose profits are limited and now depleting fast as they also have to take care of the non-operating expenses like salary to staff or in some cases rent as well. If the lockdown is further extended, it will become very difficult for them to manage with the little funds they are left with. 

However, the problem does not end here. Even after the lockdown ends and things go back to normal, people who own retail or wholesale businesses of some non-essential commodities like clothing, sports, etc, will continue to suffer as the demand of these products will be low. 

Most people have not earned money in the last month and the same goes for the coming month also, so the purchasing power of the average consumer will be low, which will make it difficult for them to buy something not very necessary like a shirt. It will be the last thing that they would do only if they have covered their expenditure and savings goals as well. 


So, this was an analyzation of the Impact of Covid-19 on the Business Environment in India. As of now, we are on our 3rd lockdown and till now things are not very clear as to when the virus will be completely eradicated from our country. 

So, the best thing to do now is to just hang in there and be patient. Yes, the recovery will be very slow and may be frustrating but it will be over for sure.

As a global recession is to endanger the world in the near future, new ideas and strategies to adapt to the market situation can prove to be life-saving.

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