New Delhi: Indian businesses face a range of challenges including trade wars and a global economic slowdown – but few firms are taking steps to mitigate the risk, according to a new study by TMF Group, a leading provider of international business administration services.
The report found that nearly half of Indian respondents (49%) predict that a global economic slowdown will be a key challenge for Indian firms in the coming year. 46% cite trade wars as a danger, with 37% concern about the impact of climate change on business. 34% believe that a EU/US trade dispute will damage India, while 33% of respondents feel that the UK leaving the European Union will have a bad effect on Indian companies.
Despite this, very few companies have taken steps to minimise the impact of geopolitical shocks. A mere 1% of Indian respondents report they have identified new customer target markets that are less affected by trade disputes, and less than 1% said they have identified new markets which are less affected by Brexit. Only 31% of respondents say they plan to reduce their operations in countries that are affected by trade wars.
Shagun Kumar, Managing Director for India at TMF Group, said: “International geopolitics can seem a long way away, but Indian firms – even the smallest ones – are closely connected to the world’s economy. 2020 is likely to contain a large number of international business shocks, and these present both a challenge and an opportunity for Indian firms. Given the pace and complexity of changes and enormity of their impact, it is worrying that so few firms are proactively preparing to manage business continuity and growth.”
Other statistics from the report included:
- When asked to predict the most likely geopolitical shocks in 2020, Chinese businesspeople were the most likely to mention trade wars, with 53% selecting this option. France was the least at 30%. Likewise, Chinese respondents were most likely to predict a global economic slowdown (51% predicting this). US respondents were the most worried about cyber-crime (cited by 38% of respondents), with Chinese as the least (19%).
- When asked to name challenges for the year ahead, 23% of Indian respondents cited “Creating and building a unified multicultural global workforce”. 29% cited “Increased demands by regulators for live data and insights across legal and finance functions”; and 35% cited “Keeping on top of increasingly demanding data protection laws (e.g. the EU’s General Data Protection Regulation (GDPR) and Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA))”.