The Sales Managers Index: India

The First Data on Economic Activity Levels in India - Every Month

Released: 29 April 2021

April SMI Shows Covid Impact on Indian Business

The impact of the Covid virus in India accelerated sharply in April. The green shoots of recovery visible only a month ago have withered under the surge in Covid related cases and deaths. 

The Sales Managers Survey Staffing Levels Index in particular showed a dramatic fall,  reflecting the chaotic management of virus control.  

Massive unemployment and the loss of output created by Covid in India will now not reverse overnight. The virus continues to rage everywhere although with each region impacted very differently.

However looking at available data in detail some surprising factors show up.

First, Indian deaths although monumental and horrific in absolute terms, show far less of a crisis in relative terms. Covid related weekly deaths in India have only just exceeded deaths at the pre-vaccination peak in the USA, despite the fact that the US population is less than a quarter the size of India's massive total. Total Covid deaths per million in India remain less than 20% of US and western Europe totals.

A variety of conclusions are possible from this apparently remarkable difference:

  • It may be that the rise of infection in India still has a long way to go - that things can get far worse before they get better.
  • It could be that deaths have been considerably underreported in India, but if this is the case (and its likely), the underreporting would have to be monumental to reflect the differences in death rates evident from the data.
  • Most survey data derives from the second and third weeks of April, before the greatest impact of the virus had become apparent, so certainly underreport the peak impact to date on economic activity in the last week of April.
  • Finally, the median age of the population in India (27) is far below that of most developed countries 38 in the US, 40 in the UK, and 47 in Italy which has reported one of the highest death rates. As Covid impacts on the old to a much greater extent than on the young, this alone almost certainly offers a partial explanation.

Back to the survey data, it seems clear that economic activity in April as a whole did not fall off to the extent that could be expected from the alarming pictures of overwhelmed hospitals, and other manifestations of the misery caused by the virus. Travel and workplace trends generally have held up. Sales Managers virtually all reported negative manifestations arising from the impact of the virus, but few of crisis proportions. India is so large it is difficult to generalise but we believe that the combination of a very young population, a  large capacity to produce vaccines, and the probably lower-to-date death rates in India mean that although there is considerable scope for conditions to worsen in May, a total breakdown in economic activity is unlikely.

India's position as one of the three great global growth drivers over the past decade will certainly suffer this year, it's likely ban on vaccine exports may hurt other countries in the area, and the dangers of mutant versions of Covid remain, but overall we believe the impact of Covid on India's economy is not likely to be significantly worse that the impact that has already been seen on most European states.


India Headline Sales Managers Index (SMI)



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