Indian companies operating in China are facing huge challenges due to the outbreak of the Coronavirus, besides decreasing revenues and increasing unplanned spending of these companies. Along with this, there is a big challenge to keep the employees scared of the deadly virus. At the same time, Indian companies which import their raw materials from China are also finding it difficult to meet their needs. With this, by Monday night, the number of people killed by coronavirus in China had reached 2,666 and the number of infected people had reached 77,780.
China is the world's largest exporter
As of 14 February in China, 48 cities and 4 provinces were in lockdown mode. With this, China is the world's largest exporter and second-largest importer. China accounts for 13 percent of the world's total exports and 11 percent of the total imports. The lockdown has affected 500 million people in China, severely affecting the consumption of goods. China's oil consumption is estimated to fall by 30 percent due to the coronavirus outbreak. The Confederation of Indian Industry (CII) has released a survey report titled 'Novel Coronavirus in India: An Impact Analysis "on 16 February. To recruit, because most people want to work near their home and are afraid to travel far. It was told that the Indian IT companies in China have suffered badly.
Adverse effect on both revenue and growth
"The expansion of Lunar New Year holiday in China has adversely affected the revenue and growth of Indian IT companies operating outside China, while IT companies are heavily dependent on manpower and movement of people," CII said in the report. But due to the ban, they are unable to function. '' Apart from this, global customers of IT companies moving away, CII further said, 'As a result, Indian IT Companies are not able to timely completion of Projects and declining new Proteks. With this, global customers of Indian IT companies based in China are turning to new service providers in places like Malaysia and Vietnam.
Business is closed from January 24 in many places
The survey states that productivity has declined due to expansion of holidays, which has a direct impact on revenue and growth. Trade in many places in China has been closed since last January 24. In China, these Indian companies are involved in sectors like industrial manufacturing, manufacturing services, IT & BPO, logistics, chemical, airline and tourism. Companies expect their revenue to fall by 15-20 per cent in the first and second quarter. It is believed that the business will be normalized by the third quarter itself.
Fixed cost became a sore throat
In its report, CII said, "Due to the stagnation of production, companies, especially manufacturing companies are facing fixed costs like salary, office rent, interest, statutory overheads, etc. There is also a possibility of loss of cash due to loss of revenue in February and March, as fixed cost can remain constant without any sale.
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