The COVID will eventually end, after its innings of destruction and death. The nations will spring back and so will India too. The challenges to the economy can only be offset partly by the government’s massive spend by way of subsidies to the poor.
The sudden lack of demand, due to lifestyle changes, will impact big and small industries alike, from autos to the smallest MSMEs. The close encounter with the kiss of death will change the attitudes of the consumers, moving from materialism to plain and simple living for quite a while. Job losses, which India is already suffering for the last couple of years can only increase, for which none can have a magic wand.
Amidst all this, the world is sure to move away from focusing on China as a manufacturing hub, or a principal raw material source. India dreaming to grab the slot cleared by China must be backed by appropriate infrastructure capacity building, which will take a couple of years.
The economy of India is no more independent from our neighbours,’ of which Bangladesh is the most important. They have a low labour cost and the advantage of a Least Developed country, having no quotas for their exports of apparels. It has become the second-largest exporter of Ready-Made-Garments, next only to China, their textile and apparel sector contributing 20% of their GDP of US$ 315 Bn.
I have visited the stitching factories in the early ninety’s: clothes exported by Indians, stitched and shipped from B’desh, exploiting their free exports. B’desh graduated to weaving factories, importing yarns from India, and then spinning factories, buying cotton from Indi and later from Central Asian countries. The immense skilled labour and low costs helped them.
The COVID may change all that, as B’desh reportedly is staring at a loss of orders to the extent of US$ 6 Bn., Including Primark and Matalan for US$ 2.4 Bn. The cancellations of orders might lead to a million workers unemployed. The second whammy is the millions of Bangladeshis employed in the gulf, who stand to lose their jobs, and stop repatriating the much-needed foreign exchange to Bangladesh. Similar scenarios could happen in the Indian state of Kerala too.
India must sit with the friendly Bangladesh government to critically analyse the post-Covid situation, which may not be much different than what is described above. Crossing over to India for survival by jobless Bangladeshis will become a humanitarian crisis affecting in particular Assam, Tripura and West Bengal. These poor do not know CAA or NPR but have to save their families, from starvation and disaster.
It is not impossible to ponder the reaction of the jobless local youths on more acute competition in an already job-scarce market from any infiltration, which must be avoided prudently and well in advance.
Sampath Kumar
Intrépide Voix
