The BGA India Team, led by Managing Director Ratan Shrivastava, recently wrote an update to clients on the implications of India’s new wave of Covid-19 cases. While the exact economic and political consequences of the new wave may still be unclear and the government of Prime Minister Narendra Modi has quickly stepped in to try to address the crisis, it already is showing signs of affecting the country’s overall growth and certain sectors that have implications for companies.


India is facing a second wave of the Covid-19 outbreak, with a virus that has mutated twice and is infecting even those who are vaccinated in the largest spike since the country was impacted by the pandemic in March 2020. The wave led by a resurgence in infections in the state of Maharashtra in March 2021 has now spread to other parts of the country, with the infected including chief ministers of the states of Uttar Pradesh, Karnataka, Kerala and Telangana and former Prime Minister Manmohan Singh.

The current outbreak has been attributed to multiple factors including a double mutation of the virus and an onset of Covid fatigue. Experts and leading virologists are concerned about the transmission of the highly infectious B.1.1.7 mutated strain of the virus among the population as it spreads rapidly among the younger population and children.


The outbreak has overwhelmed the country’s health care systems, with several states now reporting a shortage of hospital beds, oxygen and antiviral drugs. States are also grappling with dwindling supplies of vaccines as the country faces a capacity crunch in vaccine manufacturing.

The central government led by Prime Minister Narendra Modi has attempted to step in quickly. The Modi government has tried to reinforce the country’s vaccination drive and has also empowered states to impose restrictions. It has also stressed the importance of tracking, tracing and testing to effectively contain the spread along with social distancing and the wearing of masks.

The rising number of infections has seen states reintroduce restrictions such as night curfews, limited lockdowns and restrictions on large public gatherings. Delhi has introduced a lockdown until April 26. This has added some pressure on the country’s economic recovery, with several brokerages and ratings agencies revising their growth forecasts for FY 2022.


Domestic travel has taken a hit in recent weeks because states have announced the need for negative RT-PCR tests from passengers arriving from hotspot states. Some states have reintroduced mandatory quarantine requirements for domestic passengers, and these restrictions are expected to put a further strain on airlines, with carriers likely seeking financial support from the government.

The new Covid-wave is already having an economic impactthough it remains to be seen how long this will last. While it is unclear if the effects will be as much as it was during the first wave,

sectoral areas such as manufacturing and services have already shown declines, and, in the agricultural sector, hits will be particularly notable since India is also currently going through the rabi (which refers to crops planted in winter and harvested in spring) marketing season. As states impose and lift restrictions, India’s growth forecasts are expected to be revised continuously throughout the year.

BGA will continue to keep you updated on new developments as they occur. If you have any questions or comments, please reach out to BGA India Managing Director Ratan Shrivastava at