India Predicted to be Fastest Growing Trade Market Till 2020 – HSBC
Global Trade Forecast
MUMBAI, December 4, 2012 /PRNewswire/ --
Emerging Markets to Drive Global Trade
Rebound
The HSBC Trade Forecast highlights India's critical role in world trade growth
over the entire period till 2030. As per the Forecast, India represents the fastest growing import or
export partner (or both) between 2013-15 or 2016-2020 for 23
markets. India's trade growth can
be linked to its growing consumer wealth and emerging middle class;
investment in infrastructure development; the impact of Foreign
Direct Investment (FDI); its diverse range of exports and a move to
produce goods higher up the value chain, and its developing role as
a supply chain hub for Asia.
'Dual speed' growth driven by
South-South trade
The HSBC Trade Forecast is outlining a dual speed trade rebound
as South-South corridors become more established, driving growth to
2015. before being rejoined by the developed world in the later
part of the decade.
According to the HSBC Trade Forecast, powerhouses India and China will be joined by emerging trading
nations including Vietnam,
Indonesia, Egypt, Turkey, Mexico and Poland to record significant trade growth in
the next three years. As these economies industrialise, trade
in higher value goods will increase, reflecting the greater
maturity of these faster-growing economies with large populations
and rapidly expanding middle-class consumer markets.
By 2020, HSBC expects that forward-thinking companies worldwide
will have exploited multiple trade corridors and partnerships,
created effective networked supply chains, and tightened efficiency
in their operations as a result. This trend continues through
2021-30, contributing to a stabilising of trade growth which also
reflects the growing maturity of emerging markets.
Key market and trade corridor trends from the HSBC Trade
Forecast:
- India tops the tables
for all 23 markets surveyed as either their fastest import or
export growth partner out to 2020.
- Bilateral trade between China and India is set to increase significantly.
India will be the fastest
expanding market for Chinese products, with export growth averaging
20% a year during 2013-15 and 17% a year during 2016-20. Meanwhile,
India exports to China are set to grow 23% between 2013-15 and
19% in 2016-20.
- South south trade continues to show up as a trend.
Brazil's fastest growing trade
partners are India, Vietnam and China and Mexico's imports from India and China will grow 13.9% and 13.4% respectively
between 2016 - 2020.
- Indonesia exports to
the rest of Asia (ex-Japan) are expected to grow at a solid pace of
close to 10% a year over the period 2021-30. The fastest growing
trade routes will be to India and
China over the medium term
(2013-2015), led by their insatiable demand for commodities.
- Singapore's exports to
Asia (ex-Japan) are forecast to rise by a fairly robust
7% a year on average during 2021-30. But the fastest growing trade
routes will be with China,
India and Vietnam over this period.
- Bangladesh is forecast
to develop its role linking 'emerging Asia', driven by trade growth with
India throughout the period.
Bangladesh's trade is expected to
increase 19% between 2013-2015 and 14% between 2016 -2020.
- Malaysia is forecast to
see strong growth to Latin America
in the years to 2020, at approximately 9% in the period 2016-20,
underpinned by a greater sophistication in the products imported by
the continent, particularly in electronic goods. Malaysia's exports to Brazil are predicted to grow 14% annualised
over the same period.
- Vietnam is expected to
record double digit annualised trade growth throughout the forecast
period 2012-30. China will have
overtaken the US as Vietnam's
largest export partner by 2030 but the US, Japan and Korea will remain key sources of
demand for Vietnam.
- Australia's main export
markets are in Asia, and this will
continue. Australia's exports to
Asia (ex-Japan) are forecast to grow by 6% a year in
2013-15.
- Hong Kong's total
exports are forecast to double from 4.8% in 2012 to 11.4% annually
throughout 2013-2015. Although China will remain Hong Kong's most important trading partner,
other developing East Asian nations will become increasingly
important, with exports to Vietnam
set to grow by 8% a year in the decade to 2030.
HSBC Trade Confidence Index
With a score of 135, India is
the most confident country according to the HSBC Trade Confidence
Index. Optimism has improved in the last six months with 71% of
importers and exporters surveyed expecting trade volumes to
increase and another 24% anticipating business to remain at current
levels. Their global outlook is more positive than other countries
in the region as well with 61% of Indian traders expecting to see
growth.
At the same time, however, Indian sellers are not overly
confident in their overseas business partners as 43% foresee an
increase in defaults. This is double what it was just six months
ago. To minimise risk exposure, suppliers intend to use trade
finance from banks, export credit insurance and other financial
instruments. In fact, 65% of Indian businesses say they will need
increased levels of trade financing in the coming months and will
look to their banks first for help. Indian importers' confidence in
the ability of their overseas suppliers to honour agreements is
also slipping. Twelve months ago only 13% expected an increase in
non-delivery while 43% do today.
Sandeep Uppal, Managing
Director and Head, Commercial Banking, HSBC India said: "Given
an expected pick-up in growth in India and a relatively stable global economy
in the coming years, exports to all regions are expected to grow
fairly robustly, helped by India's
wide range of export products. These increasingly will move away
from traditional goods to higher value goods and hi-tech products
as India steadily develops its
technology as well as manufacturing base."
Notes to Editors:
About the HSBC Trade Forecast -
Modelled by Oxford Economics
Oxford Economics has tailored a unique service for HSBC which
forecasts bilateral trade for total exports/imports of goods, based
on HSBC's own analysis and forecasts of the world economy to
generate a full bilateral set of trade flows for total imports and
exports of goods, and balances between 180 pairs of countries.
Oxford Economics produces a global report for HSBC, plus
regional reports and country specific reports on the following 23
countries: Hong Kong, China,
Australia, Indonesia, Malaysia, India, Singapore, Vietnam, Bangladesh, Canada, USA,
Brazil, Mexico, Argentina, UK, France, Turkey, Germany, Poland, Ireland, UAE, Saudi
Arabia, and Egypt.
Oxford Economics employs a global modelling framework that
ensures full consistency between all economies, in part driven by
trade linkages. The forecasts take into account factors such as the
rate of demand growth in the destination market and the exporter's
competitiveness. Exports, imports and trade balances are
identified, with both historical estimates and forecasts for the
periods 2013-15, 2016-20 and 2021-30.
Oxford Economics - formerly Oxford Economic Forecasting - was
founded in 1981 to provide independent forecasting and analysis
tailored to the needs of economists and planners in government and
business. It is now one of the world's leading providers of
economic analysis, advice and models, with over 500 clients. Oxford
Economics commands a high degree of professional and technical
expertise, both in its own staff of over 70 professionals based in
Oxford, London, Belfast, Paris, the UAE, Singapore, Philadelphia and New
York, and through its close links with Oxford University and a range of partner
institutions in Europe and the
US.
Trade Confidence Index
The HSBC Trade Confidence Index covers a total of 20 markets and
is the largest trade confidence survey globally. The current survey
comprises six-month views of 5,800 exporters, importers and traders
from small and mid-market enterprises on: trade volume; buyer and
supplier risks; the need for trade finance; access to trade
finance; and the impact of foreign exchange on their
businesses.
HSBC in India
The Hongkong and Shanghai Banking Corporation Limited in
India offers a full range of
banking and financial services to over 1 million customers through
its 50 branches and over 140 ATMs across 29 cities.
HSBC is one of India's leading
financial services groups, with over 30,000 employees in its
banking, investment banking and capital markets, asset management,
insurance broking, insurance, software development and global
resourcing operations in the country. It is a leading custodian in
India. Nearly 6% of India's exports and imports pass through HSBC
India's banking channels. The asset management business in
India is one of the leading
players in the industry. The Bank is at the forefront in arranging
deals for Indian companies investing overseas and foreign
investments into the country. It has a fully enabled and
established insurance advisory of international standards. It is
one of the leading players in domestic and export factoring, and
one of the leading banks for an increasing number of SMEs. With its
extensive reach across Asia, the
Americas and Europe, HSBC has the
capacity to offer complete banking and financial solutions to
India's burgeoning economy. In
2008, it acquired a majority stake in IL&FS Investsmart (now
renamed HSBC InvestDirect) that has enabled it to offer retail
brokerage services to its customer across a wider geography. It has
also formed a joint venture life insurance company with Canara Bank
and Oriental Bank of Commerce that is among the Top ten private
life insurers in the country today.
HSBC's network of branches is located at Ahmedabad, Bangalore, Chandigarh, Chennai, Coimbatore, Gurgaon, Guwahati,
Hyderabad, Indore, Jaipur,
Jodhpur, Kochi, Kolkata, Ludhiana,
Lucknow, Mumbai, Mysore, Nagpur,
Noida, New Delhi, Nasik, Patna,
Pune, Raipur, Surat, Trivandrum,
Thane, Vadodara and Visakhapatnam.
HSBC Holdings plc
HSBC Holdings plc, the parent company of the HSBC Group, is
headquartered in London. The Group
serves customers worldwide from around 6,900 offices in over 80
countries and territories in Europe, the Asia-Pacific region, North and Latin America, and the Middle East and North Africa. With assets of US$2,652bn at 30 June
2012, the HSBC Group is one of the world's largest banking
and financial services organisations.
Primary Media Contact: Sejal Shah, sejal1shah@hsbc.co.in,
91-22-22681344