MUMBAI: Indian companies are increasingly moving up the value chain, focusing on higher-end and better-quality products as they look to expand into markets such as the European Union and the US, according to Citi’s global head of commercial banking, Tasnim Ghiawadwala.
Speaking to Mint, Ghiawadwala said many of the bank’s commercial banking clients in India are no longer aiming only for domestic leadership but are pursuing global scale and competitiveness. The shift, she said, reflects a steady move away from competing at the low end of product segments.
Citi’s commercial banking unit serves two broad client segments: emerging corporates with revenues of $10-100 million, and mid-sized companies with sales of $100 million to $3 billion.
“The ambition is much more than what I've seen and I've been covering India for many, many years,” said Ghiawadwala.
Ghiawadwala has spent most of her career at Citi, working in investment banking, corporate banking and commercial banking roles, alongside regional leadership positions until 2018. She then joined Barclays for three years before returning to Citi in 2021.
She said Indian firms’ push towards higher-quality products and innovation mirrors an earlier phase of China’s industrial evolution.
“If you think about Chinese companies, they have gone through that same cycle of almost being the manufacturer of the world and the focus was always on the cheapest product to market. Now it is much more about innovation and that same trend is beginning to happen in India as well,” she said.
PLI support
India, traditionally dominated by services, is attempting to expand its manufacturing base. The government has sought to attract investment through incentives, including the production-linked incentive (PLI) scheme, which has generated investments of more than ₹2.16 trillion as of 31 December, according to government data released in March.
The schemes span 14 sectors, including large-scale electronics manufacturing, IT hardware, pharmaceuticals, bulk drugs, medical devices, automobiles and auto components.
“The capability centres, offshoring have been big growth drivers in India but many of our clients in commercial banking are producing something. They're manufacturers and we like that space,” said Ghiawadwala.
At the same time, Indian companies are increasingly deploying capital overseas—both to be closer to end markets and to take advantage of lower asset prices in some jurisdictions. Broader macroeconomic uncertainty, including tensions in West Asia and shifting trade dynamics, has also prompted firms to reassess strategy.
“I just met a client and he was telling me that he has got a pile of cash that he is sitting on and is thinking about what's the best use. Maybe he is thinking about making an acquisition in Europe,” said Ghiawadwala.
She said firms are also evaluating setting up factories outside India.
“One is just part of diversification. I think if you are selling to the US, you don't want all your factories only in India. They are also taking advantage of various incentives that lots of countries are offering and Indian companies are also figuring out what is the best place to have their factories, their sales offices,” she said.
Ghiawadwala said that companies are mostly passing on rising input costs to the end consumers. “I have not really heard from many clients that they are having to absorb all of the costs and the buyers are not. I think everybody is in the same boat and ultimately, the customer has to pay that increased cost.”
She added that uncertainty has become a structural feature since the pandemic. “It feels like the uncertainty has just become a continuous thing.”
Post-pandemic, she said, companies have increasingly focused on resilience, diversifying suppliers and avoiding dependence on a single country or source.