Companies in India are optimistic about their growth prospects despite geopolitical uncertainty, according to an HSBC report released on Tuesday.
The survey gauged the sentiment of business leaders from over 9,100 companies across 35 markets globally – including more than 3,200 businesses in 12 Asian markets, with 350 of them in India.
According to the report, 96% of companies surveyed in India are projecting growth in their businesses next year, markedly higher than global and Asian peers (79% and 77%, respectively).
The report comes at a time when the Indian economy is in the midst of a slowdown. Last week brought some more troubling data showing that the core infrastructure industries’ output contracted to the lowest in at least 14 years. The gauge contracted by 5.2% in September from a growth of 4.3% in the year-ago period.
The HSBC report found that over the next five years, half of the companies surveyed in India are expecting sales growth of 15% or more, more than double the rate of gross domestic product (GDP) growth in the country. The report pointed out that this optimism extends to export projections as well as nearly 98% of Indian firms with international operations expect international sales to grow over the next two years, considerably higher than global peers at 81%.
Rajat Verma, head of commercial banking, HSBC India, said in a statement that India is at a crucial point with respect to trade policy.
“It is believed that the current factors which are threatening short-term growth will eventually stabilise and have a positive impact on mid to long term growth. The survey highlights that the key for businesses to grow is to invest in digitisation and expand to new markets," said Verma.
The report also shows that 86% of businesses in India feel protectionism is increasing in their main market. However, they also believe that the impact of protectionism has been more positive than negative for business growth. Less than 14% of businesses surveyed feel protectionist policies have had a detrimental effect.