A difficult and slow recovery
SENSITIVE RISK for entreprise
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Economic risk
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Business environment risk
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Political risk
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Commercial risk
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Financing risk
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Economic risk
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Business environment risk
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Political risk
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Commercial risk
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Financing risk
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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 |
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- 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
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- 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%
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1 |
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United Arab Emirates
9.1%
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2 |
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China
5.3%
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3 |
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Hong-Kong, China
3.6%
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4 |
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Singapore
3.3%
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5 |
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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
|
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Low
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Medium
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Sensitive
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High
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Payments
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Court proceedings
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Insolvency proceedings
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Payments
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Court proceedings
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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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