Despite presenting a brave face to the world, Modi’s India is under an unprecedented economic threat. An economy painstakingly built on exports, even at the cost of 800 million poor of India, is squeaking under the pressure of COVID-19, and it has just started revealing the horrendous signals.

The problems of the Indian economy, which was already reeling under poor management by Modi and his Nazi cabal, are not directly linked to spread of coronavirus but are accentuated by it. We have selected three major sectors of Indian economy to analyse the impact of COVID-19 and how these are going to affect the health of India in the next five years.

Many in Pakistan may not know that the Indian diamond industry is one of the most profit-making industries and it has been hit hard by COVI-19.

Standard and Poor’s 31 March report suggests that the new coronavirus has been taking a heavy toll on the already subdued diamond sector, with sales seeing an almost immediate impact from the lockdown in China and the rest of the globe following suit with containment measures including the US, a top diamond buyer. The whole supply chain from mining to sales and trading is frozen, diamond industry analyst Paul Zimnisky told S&P Global Market Intelligence. “The impact could well lead the diamond industry into a recession.”

Sudden stops in economic activity caused by lockdowns and other quarantine measures have the potential to create longer-term disruptions to global productivity that could continue well after the viral outbreak is brought under control, according to Zimnisky.

Reduced supply as a result of diamond mines being placed on care and maintenance would assist the market, with a possible supply shortage in the fourth quarter of 2020, but it will all come down to demand, Zimnisky said.

The recent lockdown in the US, which is responsible for 50 percent of demand, dealt another blow to the sector. The diamond industry had a difficult year in 2019, due in part to a glut in rough and polished diamond supply eroding margins along the supply chain, Bloomberg News reported earlier in March. The sector was also strained by trade wars between the US and China, and protests in Hong Kong hitting retail sales.

Economic Times had already warned India about the coming crisis and the glut in the diamond industry, The Economic Times report of 5 February quoted Gems and Jewellery Export Promotion Council (GJEPC) regional chairman Dinesh Navadiya who said that polished diamonds worth around Rs 50,000 crore are exported from Surat to Hong Kong every year. “That’s around 37 per cent of the total exports from here. Now, due to coronavirus scare, Hong Kong has declared a month-long vacation. Gujarati traders having offices there are coming back to India,” he said. If the situation does not improve, it will have a huge impact on the Surat diamond industry, which polishes 99 per cent of all rough diamonds imported in the country, he said. “The Surat diamond industry is staring at a loss of around Rs 8,000 crore for February and March,” he added.

The steel sector is no exception; Reuters’ report of April 1 has painted a very dismal picture of the steel sector. Sales of cars, a key source of demand for steel, are expected in the US to plummet 80 percent or more in states with lockdowns. “The virus has taken what was already set to be a dismal year for steel production, and turned it into a catastrophe,” said Kieran Clancy, assistant commodities economist at Capital Economics.

As reported in Argus Media magazine, India’s auto sector, which accounts for about 12 percent of India’s 100 million ton per year steel demand has slowed down, “Labour is not available and plants are running at low capacity,” said a product manager at a Kolkata-based re-rolling mill. A Delhi-based steel wheels plant was also forced to shut down because of a lack of staff. Most consumer sectors have halted operations so “steel demand has been hit and sales will decline in coming days,” said a sales manager at state-owned Steel Authority of India.

Major automakers such as Maruti Suzuki, Mahindra & Mahindra, Fiat and Hyundai have announced a halt to operations to contain the spread of the coronavirus. “The duration of this shutdown will depend on government policy,” Maruti Suzuki, the largest carmaker in India, stated recently.

Third major sector is the migration worker and its dependent industries.

Live Mint report of January 17 2019 has highlighted the plight of migration workers. Migration for work within India is highly circular, with migrants working in multiple destinations during their lifetimes, and retiring in their native places. As per the Economic Survey of India 2016-17, there are over a hundred million migrant workers in India, of which most are circular migrants. The durations can be as short as a day or a week, in which case they are referred to as commuters, numbering in the tens of millions, who frequently board trains and buses bound toward a nearby town or city.

A few more tens of millions migrate seasonally for work—for a few months of the year, drawn disproportionately from the Scheduled Castes and Tribes and from particular clusters in central India. They work in precarious worksites in sectors ranging from construction and brick kilns to rural harvesting operations.

Modi’s abrupt lockdown came as a bolt from the sky as 136 million migrant workers were trapped between industrial cities and their native towns and villages. Without sufficient warning, the Centre had asked states to seal their borders, provide migrant workers shelter and food, and set up quarantine centres to prevent their further movement until the lockdown ends. It left millions of migrant workers jobless, and many defied the restrictions imposed on movement as they tried to return home on foot in the absence of any public transport.

India’s 136 million daily wage labourers, many of them migrant workers, are the worst impacted by the day lockdown. With no food and no money, their anger is spilling onto the streets. So technically one tenth of India’s population is without any income as they are daily wage earners, and it doesn’t stop here, as per experts 40% of these daily wage earners will remain without jobs for another two years, susceptible to hunger; actually India may need 10 times the size of the package offered by the Modi government.

Recently, a French scholar and South Asia watcher, Christophe Jaffrelot, was interviewed by Mitali Mukharjee in The Wire magazine. Jaffrelot thinks that the COVID crisis has become a double-edged sword for rural Indian populations as their incomes have dried up and their crops are not fetching them the desired rates due to disruption in food supply chain. He strongly feels that perception of India back to stereotype of a ‘Poor Nation’ is getting strengthened, as coronavirus has exposed the poor governance and mismanagement of resources.

Adeela Naureen and Umar Waqar The writers are freelance journalists. They can be reached at