Everybody anticipated that right after budget 2020 in February, things would acquire a good momentum. However, post Feb’2020, new developments happening in the country or globe are making the economic market to collapse instead of revival. The crisis like COVID19 and existing conditions of auto-sector had created havoc in markets. However, with all these adversaries decline in the consumption of petroleum-related products in China will help India to grow in many sectors.
The growth of India was already hit to a greater extent after the surprise announcement rather than the enforcement of demonetization and GST. Good or bad, due to these decisions all walks of life have been impacted adversely at the end consumer level by all means including personal toil to professional disturbance. Slowed processes followed by these decisions created uncertainty in Indian consumption trends which is a trouble for the government. It is evident from our declining trends in GDP.
The automobile market which was already swirling with uncertainty on inventory and forthcoming issues related to the transition to BS-VI is also badly affected. Now, it is expected to pick up from at least the 4th quarter of 2019-2020.
Oil marketers have already pumped funds for up-gradation of the refinery for producing the BS-VI fuels complying with government regulations from 1st April 2020. In addition to this, the newly rising trends of EV into this virgin Indian market is already sending the jittery to Original Equipment Manufacturers (OEMs) in the auto sector.
Like one proposes and God disposes of, we are almost stalled by stagnation in every domain. To add to the existing problems due to disruption of the market COVID19 unpacked itself in a bigger way in China. It started in a big way and their auto and other automotive dependent sectors got adversely impacted.
Among all these adversities positive things for the Indian Market happened and that is the decline of consumption of petroleum-related products in China. Due to this sudden development, India is getting spot discounts on loads of containers on base oils and similar petroleum products. These discounts are likely to square off few losses incurred by this country based oil refining companies earlier.
Due to the downtrend of monopoly products, the recession will go down along with an expected increase in consumption in all sectors. Make in India, as auspiciously promoted by the Government of India, is augmenting the sectoral growth in segments like Infrastructure, road enhancements, mining, and real estate. This growth will again result in growth in Light Commercial Vehicles (LCV), Heavy Commercial vehicles (HCV) and off-highway and related equipment. As their number increases, the demand for petroleum products like Petrol, Diesel, and lubricants will also get increased rampantly.
This decrease in the pricing of petroleum products is likely to reduce inflation and can foster the consumption invariably. The consumption of petroleum products at par with the increasing population will obviously result in multiplied growth in the personal transport segment.
There is potential for huge consumption, the global players are also eying on India from the business point of view besides augmenting the infrastructure. Across the globe, many of the countries are now focusing on sustainability issues and trying to include many changes in products and processes. As India is now showing some kind of recovery this can help the country to become the sweet spot for scale-up of existing as well as a new business.