Global downturn may hurt India too: KPMG | Mint

Global downturn may hurt India too: KPMG

Yezdi Nagporewalla, chief executive officer, KPMG India.
Yezdi Nagporewalla, chief executive officer, KPMG India.

Summary

  • No other country offers a similar opportunity for talent, says India chief

NEW DELHI : India may not escape the impact of a global economic downturn particularly at a time elections are coming up, KPMG India chief executive officer (CEO) Yezdi Nagporewalla said. He also highlighted the opportunities thrown up by India’s large talent pool.

“We are at a juncture where the global trends are not very positive. And you are seeing trends indicating a different story. In India, of course, it has not impacted us yet. But there is a chance that it will impact us," Nagporewalla said in an interview. “I don’t know the quantum or the quality of the impact. But that, along with the fact that we are getting into an election year, can be precarious for India."

Many large economies are facing slowing growth amid steep interest rates and military conflict. India remains the fastest growing major economy in the world, at a time the US is tackling heavy debt, and China is wading through a real estate slowdown. The International Monetary Fund (IMF) expects India’s gross domestic product (GDP) to grow at 6.3% in FY24.

After the covid-19 pandemic originated in China’s Wuhan, many multinational companies have attempted to move their global supply chains away from China to other Asian countries. India is hoping to bank on this diversification with the government unveiling several targeted measures in the last few years to ramp up the country’s manufacturing sector.

Although some of the low-cost manufacturing is going to countries like Vietnam, India is a niche market with an edge over others, Nagporewalla said.

“As India is becoming more and more integrated, a global player which we are, it is now pretty clear that India is the talent hub. It’s probably got the largest English-speaking population and the investments that the authorities and the government made on skilling and educating people is now paying off," Nagporewalla said.

“As a result, there is no other country that offers a similar opportunity for talent, so to speak," he added.

Commenting on the audit quality of companies in India, Nagporewalla said such concerns were a global phenomenon. He added that the Indian government has embarked on a journey to improve the audit quality of companies and bring it on a par with global standards.

“Whether you see aspects of us aligning with the IFRS (International Financial Reporting Standards) as a framework or whether you see certain aspects of the Companies Act and corporate governance being aligned with the international framework—these are all steps in that direction. But you have to give it time and you have to test it," Nagporewalla added.

Nagporewalla also expressed optimism over the growing green energy sector in India, which is receiving good investments. “I think the largest investments would go into hydrogen, into green energy, that’s also fairly intensive on investments as such, but parallelly equally important are things like storage and stuff like different ways of creating batteries for storage."

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