With the dawn of 2020, the world witnessed the first outbreak of what was to become a global pandemic. Soon, the Covid-19 virus, first discovered in China’s Hubei province, spread to the farthest corners, and rattled the world economy almost overnight. Likewise, Indian businesses and economyalso took a massive blow as lockdowns were imposed all across the country.
On the one hand, some companies survived the blow through remote work; small businesses, unfortunately, were completely shut for a long time. India’s GDP dropped extremely low as the country saw the worst economic performance to date.
Sadly, the impact of pandemic on businesses and the Indian economy was far worse. Here are a few sectors that have been significantly affected by the pandemic in India.
Travel and tourism sector
When the country with the second-largest population saw the first wave of the Coronavirus, the government had to impose strict lockdowns and ban travelling. Naturally, this had a massive impact on the tourism industry, which is struggling to remain afloat. The tourism and travel sector contributes nearly 7% to the country’s annual GDP and comprises hotels, homestays, guest houses, motels, etc.
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The impact of pandemic on small businesses has been the worst. According to surveys, 82% of small businesses experienced a negative impact in 2020.
Manufacturing businesses faced a severe cash crunch as the manufacturing of non-essential items was restricted in 2020. Moreover, businesses that could not leverage the e-commerce medium were almost shut down for a long time.
Since small businesses have always been the most integral cogs for India’s growth engine, their loss directly impacted the economic downturn.
With nationwide lockdowns in 2020, the hospitality sector, including restaurants, cafes, bars, nightclubs, and more, were severely impacted. In 2021, although restaurants are allowed to open with strict restrictions and curfews in most states, the industry is still struggling. Moreover, business owners servicing business loan have had a hard time paying their monthly EMIs.
Last but not least, the automobile industry has faced huge losses and a heavy drop in production since the pandemic. In fact, major automobile brands like Honda, Hyundai, Renault and Volkswagen have witnessed a drop in production and sales of vehicles. Further, the automobile sector is expected to remain under pressure in the near future due to the COVID-19 situation of the country.
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What does the future hold?
With one of the highest infection rates, India has emerged as one of the worst affected nations in the world. However, given the rising percentage of fully vaccinated individuals and high patient recovery rate, the economy is expected to make a steady recovery.
Nonetheless, the government still needs to comprehensively examine the impact and take measures to fight the rising unemployment and poverty. Meanwhile, businesses must restructure and develop viable strategies and sound business plans to deal with the impact.
At Tata Capital, we offer low business loan interest rates and flexible repayment tenures to help your business thrive. If your savings accounts have been negatively impacted and you wish to expand your business, our loan offerings can be your guiding light. So, why delay? Reach out to Tata Capital today and figure out the best loan scheme for your enterprise!