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02
November 2018
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Opportunities (The Total Investment & Insurance Solutions)
Indian firms are upbeat on local and global
opportunities, with 96 per cent having positive outlook on the international
trading environment, according to a survey.
While
94 per cent companies are upbeat about their growth prospects, a similar
majority, 97 per cent, of Indian businesses are bullish about the growth
opportunities, global banking giant HSBC said in its 'Navigator' survey.
Indian
companies were found to be significantly more optimistic about the above three
factors than the global average of global trading environment (78 per cent),
market (76 per cent) and for their own company (77 per cent).
The three key drivers of growth of trade for
Indian firms, according to the survey, are greater use of technology (41 per
cent), increasing demand for their products (34 per cent) and growth of
ecommerce (33 per cent).
Further, optimism amongst Indian firms about
growth prospects of their own company is largely driven by an expectation of global
economic growth (46 per cent), introduction of new technologies (38 per cent)
and consumer confidence (34 per cent). The
Total Investment & Insurance Solutions
The US, the UK and China are the top three
current trading partners for Indian firms, the survey revealed. The Total Investment & Insurance
Solutions
Going forward, companies expect the US,
Australia and Canada to be the key markets for their expansion. The threat of
protectionism is one development that is worrying Indian businesses. Majority
of respondents (81 per cent) said the governments in foreign markets were
becoming more protectionist, which was far above the global average (63 per
cent), the survey showed. On the other hand, Indian respondents do not
necessarily believe that regulations are always negative for their business. The Total Investment & Insurance
Solutions
Although just under a third (31 per cent)
felt complex approval systems made it hard to do business, nearly two in five
firms said regulations are increasing competitiveness of their business and
just under a third believed that it increased the value of their business, it
said. Around two-thirds (67 per cent) of Indian firms expect industry or sector
specific free tradeagreements to have a positive impact on their businesses in
the next three years. Businesses appear most confident about the positive
impact of India's free trade agreement with ASEAN, according to the survey. The Total Investment & Insurance
Solutions
Interestingly, a quarter of firms felt that
Brexit will create opportunities for them outside and inside of the European
Union. Diversification into other products and services (37 per cent) and
expansion to other markets (35 per 11/2/2018 Indian firms upbeat on local &
global opportunities in addition to increased spend on research and development
and technology (33 per cent) are the major changes companies have made in the
last two years, according to the survey.
This has been done with the intention of
attracting new customers (41 per cent), driving product innovation (40 per
cent) and driving growth (38 per cent). Growing market share is the key factor
in setting the future direction for two in five (40 per cent) Indian
businesses.
"Global trends point towards a rise in
protectionist sentiment. While this is a concern, we believe that India will
continue to hold its position as one of the fastest growing economies globally,
and hence, present long term growth opportunities," said Rajat Verma, head
of commercial banking, HSBC India.
Globally, the survey revealed that businesses
are upbeat about their prospects, encouraged by customer demand and favourable
economic conditions, but are revising their strategies as protectionism dents
the outlook for international trade. Moreover, political headwinds are gaining
strength as 63 per cent of firms globally think governments are becoming more
protective of their home economies, up 2 per cent since the first quarter of
2018.
Reflecting these uncertainties, many
companies are turning their attention to intra-regional rather than
inter-regional trading opportunities, it added. The survey was conducted among
among 8,650 decision makers in 34 markets globally, including in India. The Total Investment & Insurance
Solutions
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