The hope, however, was dashed with the onset of the Russia-Ukraine war, which disrupted supply chain management across industries and increased inflationary pressures.
After experiencing interruption in 2020 and 2021, India Inc thought that 2022 would be a year of recovery. Omicron, a new strain of Covid that emerged around the end of 2021, has other plans. The atmosphere darkened throughout the first few months of the new year.
With vaccination having increased and the new strain of virus not proving fatal, hope was restored. The expectation, however, was dashed with the outbreak of the Russia-Ukraine war, which disrupted the supply chain management of firms across industries.
History appears to be repeating itself in certain aspects. Just when enterprises were approaching consolidation mode and take-off would have been the next logical step, the surge of Covid cases in China has raised the question of whether 2023 would see a full-fledged comeback or whether supply chain concerns will once again drag numerous industries.
It’s tough to predict where 2023 will go, but one thing is certain: India Inc is looking forward to the year with hopes of resurgence and development, as well as an increase in private capital spending. If the growing Covid instances cast doubt on this optimism, it is mitigated by the government’s and industry’s two years of learning.
“The country has slowly but steadily emerged from the previous couple of years of volatility, exhibiting remarkable resilience,” says Sanjiv Mehta, MD and CEO of Hindustan Unilever. As we start the new year, the globe will continue to confront a turbulent external environment and the prospect of another wave of Covid-19 still hovers over our heads”. “It is a thrill to observe the new India evolve into a beacon of change and hope for the globe,” Mehta continues. There is a lot of hope in the country, and India has earned a bright position on the global stage.”
According to him, India’s long-term economic fundamentals have strengthened, and the country is becoming more popular as an investment destination. “Regardless of global uncertainty, I am hopeful that this decade and beyond will be India’s wonderful time, supported by structural reforms and supporting policy measures that will continue to offer an enabling climate for Indian business and entrepreneurs to thrive,” Mehta says.
The most difficult task for India Inc in 2023 would be dealing with the inflationary climate that had a negative influence on demand and consumption in 2022. “The inflationary climate and resulting price rises saw customers tightening their purse strings and even downtrading to smaller packs in the case of FMCG items,” Dabur India CEO Mohit Malhotra said.
Analysts predict that while margin pressures will likely lessen progressively in 2023 due to current trends in commodity price softening, concerns will continue due to the geopolitical environment. Despite some recent softening and stabilisation of commodity prices, India Inc’s ability to halt the decline in earnings will be dependent on factors such as energy cost inflation, evolving recessionary trends in developed markets, and the impact of currency fluctuations on both imports and export-oriented sectors.