China’s Zero COVID Policy To Infect These Indian Sectors

China’s Zero COVID Policy
Share

Recently, because of the zero COVID policy, China has been going through a lot. But did you know that the scenario in China could infect a few Indian sectors as well? Let’s find out which sectors are those.

What’s Happening?

China’s zero COVID policy has ruined the life of its citizens in many ways. People have lost their jobs, citizens are falling short of food, companies are shutting down production, and recently, citizens have come down to protest against the zero COVID policy!

In a nutshell, things are hard in China. But, amid such hard times, how will the ‘Zero COVID Policy’ affect Indian sectors? Let’s find out.

China’s Zero COVID Policy Could Weigh Down These Sectors in India

  • Diamonds

China purchases nearly 40% of India’s cut and polished diamonds directly and indirectly through Hong Kong. It is the second largest importer of diamonds from India after the US. Now, the zero COVID policy has affected the import capacity of China, and so has it impacted India’s diamond exports. 

India’s diamond exports fell by 13.45% in July 2022 compared to the previous year, and the trend may sustain till the situation normalises in China. 

Moreover, this year, the orders for cut and polished diamonds from far east countries have also slowed down in the past few days.  

  • Consumer Electronics

India has been facing the supply chain issue since the the pandemic’s beginning. Even if things are back to normal in India, it is the same or worse in China. So, Indian manufacturing companies may fall short of the components needed to produce electronic appliances. The production of air conditioners may take the biggest hit as almost 75% of its components are imported from China. 

According to Economic Times, Chinese component manufacturers have indicated a delay in supplies by 10-14 days. If the protests continue, the crisis could dent domestic production.

  • Engineering Goods

India exports engineering goods to 25 destinations, out of which a decline was seen in 19 countries in October 2022. India’s engineering goods exports to China fell 64% YoY in October 2022. Apart from this, export to European Union also saw a dip of almost 23% in October 2022. 

What’s Next?

According to a report by Economic Times, European Parts Center (EPC) India chairman Mr Arun Kumar Garodia said, “The recent trends in India’s foreign trade point to challenging times ahead, at least for the near term. However, we expect India to be much less impacted by the global slowdown than many advanced major economies”.

Moreover, situations will return to normal once China’s internal conflict stabilises. 

Teji Mandi Multiplier Portfolio of high quality companies that blends shorter term tactical bets with long term winners Subscription Fee
CAGR
Min. Investment
Teji Mandi Multiplier Portfolio

Teji Mandi Multiplier

A basket of stocks of small and mid-sized public companies. This portfolio holds the potential to secure larger returns in the future as the companies grow.

1Y CAGR

Min. Investment

Subscription Fee

Teji Mandi Flagship A basket of 15-20 long-term and tactical stocks that we regularly rebalance to adjust to the market conditions. Subscription Fee
CAGR
Min. Investment
Teji mandi Flagship portfolio

Teji Mandi Flagship

A basket of 15-20 long-term and tactical stocks that are rebalanced regularly to adjust to the market changes.

1Y CAGR

Min. Investment

Subscription Fee

Recommended Articles

"Register Your Interest"

Already a member ? Log In