New Delhi, March 21 (IANS) Indian companies are most concerned about increasing protectionism around the world, a report said on Wednesday.
“The survey data shows that almost nine of 10 businesses in India feel that governments are turning increasingly protectionist, leading to a rise in the cost of doing international business, altering trade routes and raising hurdles to obtaining trade finance,” said the HSBC report “Navigator: Now, next and how for business”.
Concern in India is significantly higher than the global average, as among the 6,000 firms surveyed across 26 countries, three in five (61 per cent) firms globally are concerned regarding rising protectionism, it added.
Other regions where the sentiment is strongest among companies are the Middle East and North Africa (70 per cent) and Asia-Pacific (68 per cent).
In the US, 61 per cent are concerned while in Europe the number is half the total number of companies there, according to the survey.
Commenting on the survey, Rajat Verma, Head of Commercial Banking – HSBC India, said: “An increase in protectionist sentiment is causing concern about the cost of doing cross-border trade and international business. Companies are adopting business plans and relationships to participate in shifting supply chains.”
Strategies by companies include increasing regional trade, establishing joint ventures or local subsidiaries in more markets and capitalising on trends in consumer demands and digital technologies, he pointed out.
In India, trade initiatives that are likely to lower trade barriers are viewed positively, according to the survey.
However, “globally, majority of firms are looking to regional partners to develop trade opportunities, with almost three quarters (74 per cent) of overseas trade in Europe and Asia-Pacific being conducted within their ‘home’ region”, it said.
The trend is set to continue with regional ties being prioritised in firms’ expansion plans for the next three to five years, the report noted.
Companies around the world are focused on growth, with more than three in four (77 per cent) businesses optimistic about their international business prospects, and they expect the volume of trade to increase over the next 12 months, it said.
The report attributes the confidence among the companies to increase in demand for their products from consumers and businesses (33 per cent), favourable economic conditions (31 per cent) and the greater use of technology (22 per cent) in driving growth, among others.