Guangdong's sorrow is turning out to be Goa's joy. While China may still be reeling under the impact of the Severe Acute Respiratory Syndrome (SARS), it has brought some unexpected benefits to Indian businesses. In Goa, bang in the middle of the lean season, tourists are flocking in. Leading five-star hotels in Goa-Marriott and Taj Village-are full. "All our 135 rooms are occupied as against only 35 rooms in June 2002," says Sunil Chopra, resident manager, Bogmallo Beach Resort, Goa. Even airlines are flying to full capacity. Air Sahara has seen its passenger traffic rise 4.5 per cent in May and June. Says U.K. Bose, CEO, Air Sahara: "The rise in seat occupancy this year is partly due to the diversion of tourist traffic to India because of SARS."

SEWING SUCCESS: Garment exports gained most from SARS

With the SARS scare raging high in popular tourist destinations like Singapore, China and South-east Asia, India was a safer alternative. Between January and May, foreign tourist arrivals rose by 9.4 per cent-from 9.9 lakh last year to 10.8 lakh this year. Also, a large number of Indians go to South-east Asia during summers. This year, many of them decided to holiday within India. Says Ankur Bhatia, managing director, Amadeus India: "We expect the South-east Asian traffic from India to dip 25-30 per cent this year."

While the windfall for tourism and airlines is more visible, exporters have gained more, with handicrafts and garment exporters being the biggest winners. The cancellation of two big fairs in April-a gift and houseware show in Hong Kong and an 11-day commodity fair in Canton-kept many global buyers from placing orders with Chinese companies. Says Sudhir Dhingra, chairman, Orient Crafts Ltd, who landed a Rs 10 crore order owing to sars: "Since foreign buyers could not visit China, some of the orders came to India." The SARS scare will boost handicraft exports by an estimated 5-7 per cent and garment exports by 7-10 per cent in 2003-4. Pharmaceutical companies Alembic and Indswift, cashing in on the demand for macrolides which are used for treating sars, bagged export orders worth Rs 12-15 crore.

To be fair, the gains from SARS did not just fall into the lap of Indian business houses. They came due to deft marketing and swift action. Hotels and airlines joined hands to offer attractive packages to major tourist destinations across the country. Air Sahara alone has tied up with 25 hotels in Goa offering holiday packages inclusive of airfare, boarding and lodging. Similarly, exporters have gone all out to attract new buyers by pitching India's strengths and diverse product range. Says Bert Rend, a handicrafts buyer from Holland, who upped his imports from India three-fold this summer: "Many European buyers did not visit China due to SARS. India emerged as a good alternative with its diverse range."

Moreover, SARS may have made MNCs realise that they should not source all their eggs from one basket. "Geographical derisking will be one of the factors that MNCs might look at in future," says Michael Spencer, chief economist, Asia, Deutsche Bank. India could be a beneficiary of such derisking. In fact, a report by Jones Lang LaSalle, a real estate consultancy firm, sees nations like India gaining as MNCs try to diversify their sourcing centres.

Will the gains from SARS last? Will buyers and tourists, who came to India only because of the epidemic in South-east Asia, go back once the scare is over? Exporters are confident that their new customers will come back for more. Says Rakesh Kumar, executive director, Export Promotion Council for Handicrafts: "Twelve big buyers, who came to India only because of SARS, will also come next year."

If that happens, the temporary windfall from SARS will translate into permanent gains. Or else the benefits will disappear as soon as the disease disappears from China.