A difficult and slow recovery

B3

SENSITIVE RISK for entreprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

Last updated in July 2021.

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GDP USD2875bn (World ranking 5, World Bank 2019)
Population 1366mn (World ranking 2, World Bank 2019)
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
  • Growing financial risk, with deterioration of balance sheets for banks and non-bank financial institutions amid the Covid-19 crisis.
  • The Kashmir region remains volatile and a source of potential conflict. India-China relations have also deteriorated recently due to border disputes.
  • The political system tends to engender coalition governments that lack the ability to push through economic reforms. Political opposition and nationwide protests against the Citizenship Amendment Act emerged in late 2019, and have dissipated for now amid the Covid-19 pandemic.
  • Poverty remains pervasive and income distribution uneven.
  • Structural weaknesses include inadequate infrastructure, current and fiscal account deficits and state involvement that crowds out private sector initiatives in some sectors.
  • Weak structural business environment (though improving)
  • Vulnerable to natural disasters (including tsunamis, droughts, floods and earthquakes).

Trade structure by destination/origin

(% of total)

Exports Rank Imports
United States 16.8%
1
14.3% China
United Arab Emirates 9.1%
2
7.3% United States
China 5.3%
3
6.3% United Arab Emirates
Hong-Kong, China 3.6%
4
5.6% Saudi Arabia
Singapore 3.3%
5
4.6% Iraq

Trade structure by product

(% of total)

Exports Rank Imports
Mineral fuels, mineral oils, and related products 13.78%
1
31.88% Petroleum, petroleum products and related materials
Pearls, precious stones, precious metals 11.36%
2
12.3% Pearls, precious stones, precious metals
Machinery and mechanical appliances 6.58%
3
10.62% Electrical machinery and equipment
Organic chemicals 5.64%
4
9.29% Machinery and mechanical appliances
Motor vehicles 5.39%
5
4.29% Organic chemicals
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

  • 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.

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