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India is one of the key markets globally for HSBC. According to James Emmett, global head of trade and receivables finance at HSBC, when it comes to global trade India cannot be matched against some of the other faster-growing economies due to its differentiating domestic scale and industry type. In an interview to Neelasri Barman, he says that India needs to maximise the opportunities opening up across different parts of the world and identify key markets, such as Asia.
Edited Excerpts:
Can you throw some light on HSBC's global trade and receivable finance division?
In revenue terms, HSBC is the largest trade and receivables finance provider globally. With presence across all important markets around the globe, HSBC’s geographical foot print reaches across 77% of world trade flows. This helps our customers to grow their businesses. If we help customers in growing their business, fundamentally we are helping in the growth of the economy and we are helping businesses prosper.
What are the key trends you are seeing in international trade globally?
We are seeing three broad trends. First being the developments in emerging market corridors and the fact that a number of countries, particularly in faster-growing economies, are moving into production of higher-value goods. The second thing is that developed markets are also part of this trend towards higher-value goods, as there remains a significant opportunity to specialise and further innovate. The third is that of key trade hubs –cities/regions which have the ability to expand their trading relationships in markets like Mumbai have the potential to be one.
What is the outlook in terms of areas of growth for India?
We see very significant growth in areas such as transportation and specialised components manufacturing. The emergence of new trade corridors also play a very important role. India is one of our key markets globally. On the exports side, we are seeing a significant change in the dynamics of the Indian market. We are there to support Indian companies who are looking to export, and those who are looking for opportunities to connect and trade globally.
What are the learnings which Indian companies can take when it comes to global trade from other emerging economies?
India cannot be matched against some of the other faster-growing economies due to its differentiating domestic scale and industry type. The importance of metals manufacturing and mineral manufacturing are key for India. This means maximising the opportunities opening up across different parts of the world and identifying key markets, such as Asia. These include China, which should be recognised as a developing export market. The UAE and the Middle-East also remain very significant, as are the ASEAN markets.
India should be looking to identify the key products which will meet the needs of those markets. We are looking to support our Indian clients meet their international needs, especially as payments risks for these clients need to be effectively managed. The key markets for growth will be Asia, but India will continue to have significant opportunities in developed markets such as the US and EU and with the Middle East.
In a scenario where we are expecting slower growth in the economy even in the next fiscal, how do you see the situation of international trade for Indian clients?
The growth of global trade for India is tied to a great extent to the global economy. We are not talking specifically about GDP, but we are talking about India's opportunities to increase their exports. India should identify areas of potential significant growth such as China. There is a need to identify and market differentiating capabilities.
How proactive has the government of India been in terms of facilitating growth in international trade?
India's international trade has developed very significantly since the 90s due to liberalisation. The challenge for government is to look at how they can facilitate exports, by that I mean make the exports very meaningful to trading partners.
Has the competition intensified in this trade and receivable finance segment when it comes to India, as many Indian banks have similar offerings for Indian companies looking at exports?
It is important that competition continues to develop and yes it has intensified. This reflects growth in the market. Indian banks are going abroad and they are looking to provide international trade finance. That is going to be very important for Indian exporters. HSBC offers a global network which is unique in its ability to support. We help Indian companies in risk mitigation and financing their international trade requirements. India's growth story in international trade is going to be very significant. HSBC is very excited about the opportunities that are opening up for Indian exporters and we look forward to helping them make use of these opportunities.
