India Country Risk Report & Analysis

India: At a crossroads

B3

MEDIUM RISK for entreprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

The country risk assessments are your North Star metrics to make the right decision for your business and understand the risks in international trade. We have always the best solution for your needs

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GDP USD2726bn (World ranking 7, World Bank 2018)
Population 1353mn (World ranking 2, World Bank 2018)
Form of state Federal Republic
Head of government Narendra Modi (PM)
Next elections 2022, presidential
  • Stable democracy, with peaceful changes of government
  • Large internal market, providing some insulation from global business cycle
  • Successful diversification into manufacturing (motor vehicles) and services (including call centres, IT and biotechnology)
  • High annual GDP growth
  • Low external debt relative to earnings and repayment capacity
  • Strong foreign exchange reserves
  • Vulnerable to natural disasters (including tsunami, droughts, floods and earthquakes)
  • The Kashmir region remains volatile and a source of potential conflict
  • The political system tends to engender coalition governments that lack the ability to push through economic reforms
  • Poverty remains pervasive and income distribution uneven
  • Structural weaknesses include inadequate infrastructure, current and fiscal account deficits and state involvement crowds out private sector initiatives in some sectors
  • Weak structural business environment

Trade structure by destination/origin

(% of total)

Exports Rank Imports
United States 16%
1
17% China
United Arab Emirates 12%
2
6% United States
Hong Kong 5%
3
5% Saudi Arabia
China 3%
4
5% United Arab Emirates
United Kingdom 3%
5
4% Switzerland

Trade structure by product

(% of total)

Exports Rank Imports
Non metallic mineral manufactures, n.e.s. 11%
1
19% Petroleum, petroleum products and related materials
Petroleum, petroleum products and related materials 11%
2
8% Non metallic mineral manufactures, n.e.s.
Articles of apparel & clothing accessories 7%
3
7% Gold, non-monetary (excluding gold ores and concentrates)
Miscellaneous manufactured articles, n.e.s. 6%
4
6% Telecommunication and sound recording apparatus
Textile yarn and related products 6%
5
5% Electrical machinery, apparatus and appliances, n.e.s.
DSO in India is 67 days, late payments are not regulated and ownership protection may be difficult to enforce.

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings

The court system is complex while extensive delays and costs make legal action difficult. Accelerated proceedings are not available for undisputed debts and foreign debt judgments would be enforced with difficulty.

A new insolvency regulation provides a framework for debt restructuring, priority rules, time frames and clawback, but in practice, once the debtor is insolvent, chances of recovery are virtually impossible.

Euler Hermes

Economic Research Team

research@eulerhermes.com

Mahamoud Islam

Senior Economist for Asia

mahamoud.islam@eulerhermes.com 

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