India is among the markets with the greatest potential for future trade growth
India is among the markets with the greatest potential for future trade growth, with legislative reforms and infrastructure improvements driving its success, stated a new research from Standard Chartered placing India at number two in the Trade20 index.
“Policy improvements and the government’s focus on promoting the country as a manufacturing hub are clearly paying off. We expect to see higher investments flowing into India, which will ultimately result in increased domestic and cross-border trade. We also see tremendous potential for growth in trade digitisation backed by newer technologies, clients willing to experiment and facilitative government and regulatory mechanisms,” said Ricky Kaura, Transaction Banking Head of East, Standard Chartered.
The research said, India performs particularly well in the trade readiness pillar – defined as a market’s foundations for future trade growth. India’s strong trade readiness score is driven by fast-paced business environment improvements and infrastructure upgrades.
Business reforms over recent years have helped to improve India’s ease of doing business score, and it has also enhanced its digital infrastructure, spearheading mobile payment innovations, witnessing rapid e-commerce growth and using technology to revamp the taxation system, it added.
Trade20 examines 12 metrics across 66 global markets – the major global economies plus the major economies in each region – to reveal the 20 that are most rapidly improving their potential for trade to grow.
These markets are identified by measuring changes in 12 metrics under three pillars: economic dynamism (foreign direct investment, export and GDP growth), trade readiness (infrastructure, e-commerce, and ease of doing business) and export diversity (the range of exports).
Higher exports are strongly correlated with higher imports, of both capital and consumer goods, offering opportunities for companies worldwide. A high ranking also suggests a market that is improving as a possible outsourcing location.
The study does not look at the trade growth potential of each market in absolute terms, but at its individual potential for trade growth relative to its size. In absolute terms, large economies will, of course, offer greater potential and opportunity overall than smaller ones.
Trade20 points towards strong potential for trade growth for a number of markets outside the China-US-Europe trade axis, with India, the ASEAN region, and several economies in Africa and the Middle East ranking highly. 15 of the Trade20 markets are in Asia-Pacific, Africa or the Middle East, and emerging markets dominate. For many of these high-potential emerging markets, the key driver of momentum is trade readiness, as rapid urbanisation and growing middle-class populations spur infrastructure spending and improvements to the business environment.