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India shuts off economy for world's largest coronavirus lockdown

Factories and stores forced to close, in further blow to decelerating growth

People buy vegetables at a market in New Delhi after Prime Minister Narendra Modi called for a three-week nationwide lockdown to limit the spreading of the coronavirus.   © Reuters

MUMBAI -- Much of India's economy came to a halt under a three-week nationwide lockdown that began Wednesday, shutting down stores and manufacturing plants, with broad repercussions for the nation's 1.3 billion people.

The order mandates the closure of all nonessential businesses and government offices. Those allowed to stay open include producers and sellers of food and medical products, as well as telecommunications and power companies, banks, law enforcement and media.

"The nation will have to certainly pay an economic cost because of this lockdown," Prime Minister Narendra Modi warned in a speech Tuesday night announcing the measure.

This will be another blow to an economy that had already been cooling, with growth coming to just 4.7% on the year in the fourth quarter of 2019 and a six-year-plus low of 4.5% in the previous three months.

Maruti Suzuki, India's largest automaker and a unit of Japan's Suzuki Motor, halted two plants in the northern state of Haryana on Sunday. "The duration of this shutdown will depend upon government policy," the company said in a statement.

Japanese carmakers Toyota Motor and Honda Motor suspended production from Sunday and Monday, respectively. South Korea's Hyundai Motor, the country's No. 2 carmaker, and local players including Tata Motors had shut down manufacturing operations by Tuesday.

Major appliance manufacturers, including Panasonic and Samsung Electronics, have also stopped production. Top iPhone assembler Foxconn, also known as Hon Hai Precision Industry, has halted all production in India, Bloomberg reported Wednesday.

"Violators will be punished, so there's nothing private-sector companies can do but obey" the lockdown order, said a representative of a Japanese business in India.

India had at least 560 COVID-19 cases as of Wednesday, including noncitizens, according to the Ministry of Health and Family Welfare. While the total is small compared with other major countries, it has more than tripled over the past five days, alarming the government. India's low testing capacity and relatively underdeveloped health care system may be unable to handle a spike in cases.

Individual cities, including New Delhi and Mumbai, had previously issued lockdown orders, and the disruption has hit even industries specified as exempt. The Indian arm of Nestle said Tuesday that it had been forced to suspend operations at some plants and distribution centers and is now in talks with authorities on getting them running again.

While people are allowed to go out to buy food, the lockdown has spurred a rush to the stores, and frozen foods and nonperishables are in short supply. With food growing difficult to come by in certain areas, some Japanese companies have directed staff stationed in India to return home.

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