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Recession, Confrontation with China Challenge India

Anjana Pasricha

   NEW DELHI - India this year confronted its most serious economic and
   security challenges in decades as the COVID-19 pandemic plunged the
   country into a recession and a military standoff with China along their
   unresolved Himalayan borders derailed relations with its powerful
   neighbor.

   One of the world's strictest lockdowns imposed in March when it had
   just a few hundred cases did not stop the virus from wreaking havoc
   when the country began opening up. By the end of the year it was the
   second-worst hit nation, counting nearly 10 million cases.

   But as millions lost jobs and hundreds of small businesses shut down,
   analysts warned that the economic scars inflicted by the pandemic ran
   deeper than the health crisis.

   The first signals of widespread distress came in April, when India
   witnessed an unprecedented exodus of migrant labor stranded without
   jobs in cities, many walking hundreds of kilometers as all transport
   was abruptly shut down.

   "Nowhere else in the world you saw millions and millions of people
   trudging to their villages on empty stomachs and without money," said
   economist Arun Kumar in New Delhi. "The tragedy was that the
   unorganized sector was the hardest hit by the lockdown because many of
   these people have very little capital to survive a long shutdown."

   India has been the worst hit among major economies because nearly 90%
   of its workforce is sustained by the country's vast informal sector.
   The economy is forecast to shrink by some 9% this year, its worst
   recession in four decades.

   The Center for Monitoring Indian Economy estimated that some 120
   million jobs were lost from April to June. While many came back as the
   government began easing restrictions to kickstart the economy, millions
   were still struggling to find work or restore livelihoods at the end of
   the year.

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