by Priya Jadhav
Mumbai , Feb 2020:As the world combats a global healthcare crisis, it could prove to be a tough blow for a world economy that had seemed to be on the cusp of a modest revival. The trajectory of the epidemic could cause a serious blow for business in several countries.
With China -- the world’s second-largest economy and engine of global economic growth -- coming to a near standstill, there are bound to be significant ramifications all over the world. Global supply chains may be affected in more ways than one. According to analytics firm Dun & Bradstreet, at least 51,000, including 163 Fortune 1,000 companies around the world, have one or more direct suppliers in China’s Hubei province. At least five million companies have one or more tier-2 suppliers in and around the epicenter of the outbreak.
For India too, the disruption in business will be felt gradually. China is India’s second largest trading partner. The country accounted for 13.7% of India’s total imports in 2018-19 while 5.1% of India’s total exports went there, according to ministry of commerce data. The Indian pharma industry is dependent on Chinese imports to make medicines with APIs (active pharma ingredients) coming from China. The $30 billion domestic smartphone market, world’s second largest, is also likely to see major disruptions as it is heavily dependent on imports from China.
There may be a supply crunch in smartphones, TVs and electronics too which could impact ecommerce sales dearly. Machinery is one of the five import items that India is heavily dependent on China for and these are the ones that make up about 28% of India’s import basket which could be hit the most due to a potential shutdown.
There is a silver lining to the cloud though.
This is the time when countries like Taiwan with all their expertise in offering a slew of smart services that are efficient, sustainable, accessible and affordable are ready to step into a role to help, assist and co-operate while dealing with the global catastrophe. Taiwan can offer India expertise in a number of areas including auto components and parts, chemicals, engineering, financial services, information and communication technology. Given its immense know-how in the fields of smart solutions, hardware manufacturing, construction, infrastructure, mine exploration, electronic manufacturing, logistics, automobiles, food processing and others, Taiwan has already been playing a vital role in the success of the Indian government’s “Make in India,” “Digital India” and “Skill India” initiatives and it will continue to do so.
India and Taiwan should strengthen business amid uncertainty over the global economy.
Taiwan can also increase cooperation with India in areas such as air quality management, agriculture, education, culture and tourism as it has done through various events and expos in the past. Even CNN from the United States has conducted special discussions on Taiwan’s health care system as they are rated top of the world. Taiwan can offer cooperation in terms of industrial upgrade and factory optimization through its smart machinery industry that combines its powerful ICT industry chain and precision machinery technology. Taiwan’s overall smart production solutions make it the best choice during this global industrial upgrading phase.
Moreover, Taiwan is now keener than ever to collaborate with Indian companies that can bring in mutual benefits at times like these. The current trade volume between India and Taiwan stands at $7.5 billion. The bilateral trade between the two countries has gone up. What stood at $1 billion in 2000 rose to $7.5 billion in 2019 -- a six times increase in volume. There are many Taiwanese companies working in different sectors of the Indian economy. Several MOUs have been signed between Indian and Taiwanese companies in the recent past. The environment is conducive for Taiwan to further business relations in India while offering solid assistance and co-operation to India in filling any void in business caused by the global health calamity.