India has set new records in both the number of confirmed cases and deaths of the new coronavirus (COVID-19), according to data released by the Ministry of Health on Monday. Last week, India accounted for 46% of the new confirmed cases and about 25% of the new deaths, according to the World Health Organization.


Analysts believe that the continued deterioration of the epidemic in India will not only affect the country's economic recovery, but also bring multiple adverse effects on the world economic recovery. First, the worsening of the epidemic in India is a drag on the global epidemic prevention process and a threat to the foundation of world economic recovery. The head of the International Monetary Fund, Georgieva, has said that accelerating vaccination is a priority for global policymakers and that "a shot in the arm is the fastest way to economic recovery". Some public health experts are concerned that the outbreak in India, which is aggressive and shows no signs of abating, may bring a new variant called coronavirus, posing a serious challenge to the global epidemic prevention process.

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Ashish Jha, dean of the School of Public Health at Brown University in the United States, believes that given India's population, the longer the outbreak lasts, the more likely it is to produce more mutated viruses that could affect the effectiveness of existing vaccines. There are signs that the outbreak in India is beginning to spill over to some neighboring countries and regions. If the spillover of the mutated virus continues, the global recovery from the epidemic will be delayed.


Second, the shortage of vaccines in India has led to a run on health resources, adding to the imbalance in the world's economic recovery. The global epidemic is showing a diverging trend. Developed economies such as the United States and the United Kingdom are on the upswing and enjoying steady economic recovery, while many developing economies are hampered by the record number of new confirmed cases. India's role in global vaccination is being forced to shift from donor to recipient, creating a run on global vaccine resources.


The Serum Institute of India is the world's largest vaccine manufacturer and the largest supplier of COVID-19 vaccine implementation programme, which is led by the World Health Organization, according to The Atlantic. Judging by the current outbreak in India, the country's existing capacity of 70 million doses of COVID-19 vaccine per month is no longer sufficient to meet domestic demand, so vaccine exports have plummeted. India has even had to import medical supplies, with the consequence that many developing countries will not be able to access India's exported vaccines as planned.


Some analysts are concerned that the world economic recovery is already unbalanced and that the passive role of developing countries in the response to the epidemic could exacerbate this imbalance.


Third, India's epidemic-related prevention and control has exacerbated supply chain tensions, bringing knock-on impact to the industry. Some countries and regions have imposed stricter quarantine rules on ships and personnel involved in Indian shipping because of fears of an outbreak on cargo ships, the Financial Times reported, putting pressure on many shipping companies to adjust their seafarers.

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There are about 1.6 million seafarers working on ocean-going ships globally, of whom 240,000 are Indians, according to the International Maritime Council. Given that shipping carries 80% of global trade in goods, the impact of the Indian outbreak on maritime trade cannot be underestimated. Mark O 'Neill, president of the International Ship Managers Association, described the blockage in the Suez Canal in March as "small fry" compared with the impact on the supply chain of seafarers struggling to adjust.


Myron Brilliant, executive vice-president of the US Chamber of Commerce, said many European and US companies had their back office operations in India and employed millions of Indians. Now the outbreak is threatening those back-office operations and is likely to drag down business operations in Europe and the US.


Optimistic expectations for India's economic recovery are fading due to the recent worsening of the epidemic in India, and some institutions have successively downgraded their economic growth forecasts. Sonal Varma, chief economist for India at Nomura, estimates that India's economy may contract by 1.5 per cent in the second quarter from a year earlier. Prakash Sakpal, senior Asia economist at ING, said that while some institutions still saw double-digit growth this year, that outlook was looking fragile and "we believe there will be more downgrades soon".