(Bloomberg) — India imposed a three-week long nationwide lockdown for its 1.3 billion people, the most far-reaching measure undertaken by any government to curb the spread of the coronavirus pandemic.
“If we listen to the health experts, we know that 21 days are crucial to break the cycle of transmission,” Prime Minister Narendra Modi said in a televised address to the nation on Tuesday. “For a few days forget what it means to go out. Today’s decision of a nationwide lockdown draws a line outside your home.”
The South Asian nation is struggling to contain the economic and health fallout from the outbreak that has so far infected 519 people in the country and killed 10. India could become the next global hotspot for virus cases, with experts warning containment measures that proved successful elsewhere in Asia may not work in the world’s second-most populous country. On Tuesday, Modi also allocated about $2 billion for additional health care measures.
Ashish Chauhan, chief executive officer at the Bombay Stock Exchange, said the bourse will remain open through the lockdown.
India’s rupee weakened offshore during Modi’s address, which was after local markets had shut. The one-month non-deliverable forward was trading at 77.63 a dollar, versus 77.32 before the speech. The SGX Nifty Futures for March delivery slumped more than 3%.
In the last week, the government implemented a near complete lockdown of its major cities and suspended train, flight and long distance bus services.
“It’s a war of survival between us and the virus,” said Suresh Kumar Rathi, associate professor at the Public Health Foundation of India, and an epidemiologist. “Three weeks of complete lockdown is critical for India because it has a high density of population and limited resources.”
The biggest challenge for Modi will be to shield an economy that’s set to expand at the slowest pace in more than a decade. Experts say the country could be on the same trajectory as Italy, where the outbreak quickly escalated, causing hospitals to overflow.
In his speech lasting about 30 minutes, Modi said the amount set aside to fight coronavirus will be used for adding testing facilities, purchasing personal protective equipment for health workers and expanding isolation beds, ventilators and other important equipment.
State governments will ensure essential services and supplies. Hospitals, medical shops and establishments engaged in manufacturing medicines, vaccines, sanitizers, masks and medical devices will remain open, according to the statement.
The allocation for health comes at a time when the government’s income is already under pressure with falling tax collections. Global economic uncertainty is expected to derail plans to sell state-owned companies, and supply-chain disruptions may affect trade.
Oxford Economics has slashed India’s growth forecast for the first quarter of 2020 to 3%, a number not seen even during the worst of the global financial crisis. Meanwhile, the central bank last week announced measures to boost liquidity while holding back from following global peers with a rate cut.