India reported its first case of the COVID-19 (the coronavirus) on January 30, 2020, but it appears to be spreading more slowly in India than in other countries: As of March 18, there were 130 confirmed cases in the country, according to data from the Ministry of Health and Family Welfare. Of these 130 cases, 25 were foreign nationals, including a group of tourists from Italy.

What the Government is Doing

The government has taken measures to contain the spread of the virus in India.

Travel restrictions: The government suspended all visas to India from March 13 until April 15, 2020, except those on diplomatic, official, United Nations, employment or project visas. Those with existing visas in India can remain. Apart from suspending visas to India, the government is screening passengers entering the country for symptoms and quarantining if necessary.

All travelers, including Indian nationals, arriving from or who have visited China, France, Germany, Iran, Italy, Korea or Spain after February 15, 2020 will be quarantined for at least 14 days. All travelers coming from or transiting through the UAE, Qatar, Oman and Kuwait will be quarantined for a minimum period of 14 days. The government has imposed a ban on travelers from the UK, the Philippines, Turkey, Afghanistan, Malaysia, and countries of the European Union and the European Free Trade Association, until March 31. The government has also advised against travel to these countries, advised against “non-essential travel” domestic and international travel and restricted travel through international land borders to designated check posts.

Closure of public spaces, schools and venues of large gatherings: Various state governments have shut public spaces, including malls, cinemas, schools, colleges, gyms and swimming pools. State governments have also restricted large gatherings for weddings, seminars, workshops, conferences and sporting events, and even banned them altogether in some states.

Free testing at government-approved labs: The Ministry of Health and Family Welfare is offering free COVID-19 tests, but patients need to qualify for the tests based on symptoms, exposure to an infected person or travel to affected areas.

Joining with other South Asian nations: On March 15, Indian Prime Minister Narendra Modi hosted a video conference with leaders from the eight nations that comprise the South Asian Association for Regional Cooperation (SAARC), a regional intergovernmental organization. In the call, leaders from Afghanistan, Bangladesh, Bhutan, the Maldives, Nepal, Pakistan and Sri Lanka discussed strategies to tackle the virus. Modi proposed creating an emergency fund to be seeded with $10 million from India, and also a research platform to study and control epidemic diseases in the SAARC region.

Despite these measures, we believe there is still risk COVID-19 may spread easily in India, and have a profound impact on its economy. India’s population density is 464 people per square kilometer, (versus 153 in China and just 36 in the US. This suggests there should be greater opportunity for the virus to spread than in countries with lower population densities.

Economic Impact on India

Economists have trimmed their outlook for economic growth in light of the COVID-19 outbreak.

Slowing growth in 2020: Moody’s Investor Services cut its outlook for 2020 GDP growth to 5.3% from 6.6%, while the OECD cut its projection from 6.2% to 5.1%. India’s travel and tourism sector contributes 9.2% of GDP, according to the World Travel and Tourism Council, has already taken a hit in the January to March quarter-to-date and will certainly suffer more from the visa ban. Foreign tourist arrivals are expected to fall around 67% while domestic travel is estimated to be down 40% percent compared to the quarter ended December 2019, according to Indian Association of Tour Operators President Pronab Sarkar.

Sectors that depend on China are under pressure: China supplies about 18% of India ’s merchandise imports, according to ratings and research firm Crisil. With China shut down for nearly two months, supply chains many Indian industries rely on have been disrupted, including in electronics, consumer durables, auto component manufacturing and pharmaceuticals. The electronics industry is particularly dependent on China for inputs and may see serious supply shortages that could push up prices, including for mobile phones.

Prices of medicines, sanitizers and masks jump: India imports some 69% of its bulk pharmaceuticals from China, with a significant portion coming from factories in Hubei province, the epicenter of the COVID-19 outbreak, according to Crisil data. With India unable to import items from these factories, prices of common drugs in India have soared: The price of acetaminophen (sold in the US under the brand name Tylenol) has jumped 40% while the price for penicillin G, a raw material used to make antibiotics, has jumped 58%, according to a report by domestic business magazine Business Today. The same report highlighted that protective masks are being sold at a premium of over 300% while hand sanitizer sells at nearly 30 times original price.

How Businesses Are Responding

With more states shutting down non-essential services, businesses are responding in innovative ways to work with customers and the larger community.

Education technology startups offer free services: India has some 500 million people aged five to 24 years, according to the India Brand Equity Foundation. With schools and colleges closed, education technology startups are using the opportunity to reach more students by offering free access to apps and courses. BYJU’S – The Learning App, the brand name for Think and Learn, has offered free access to its app and some learning programs for students in grades 1 to 12 until the end of April. Platforms Toppr and Vendantu have also made some classes temporarily free.

Gyms offer membership extensions and free online classes: Health and fitness startup CureFit has offered to pause memberships for 14 days so users can use the days later and offers some classes online free.

Remote medical consultations: Health startup mFine is offering remote video medical consultations, and has released a video to help educate and inform people about COVID-19 symptoms.

Insurance: Insurance tech startup Digit Insurance is offering a fixed-benefit insurance policy for people up to the age of 75. The policy covers screening and treatment, even for patients whose results are negative.

Contactless food delivery: Food delivery firms Swiggy and Zomato are offering a delivery service that just leaves deliveries at the doorstep, so consumers do not have to interact with delivery persons.