Allianz Trade has outlined its plans for growth in India as the country is set to outrun its peers in the region over the next decade.
A recent report from the company painted a cautious picture of the global economy, highlighting challenges expected to persist due to the combined effects of monetary policy tightening until the end of 2024. The projected global GDP growth indicates a slowdown, with an expected +2.7% growth in 2023 and +2.4% in 2024.
In contrast, India is predicted to outpace its regional counterparts in terms of real GDP growth over the next decade, surpassing China, emerging Asia, and ASEAN countries. Allianz Trade also expects the Indian economy to achieve an average growth of +6.4% between 2023 and 2027.
In terms of exports, the United States remains India's largest export partner, with estimated export gains of US$6.86 billion in 2024. Among key sectors, India is anticipated to garner the highest export gains from software and IT services, amounting to approximately US$19.28 billion in 2024.
On the flip side, Allianz Trade predicts a rebound in business insolvencies in India this year, primarily due to the catch-up effect following the extended court suspensions during the COVID years. Insolvencies in India are expected to increase by +36% this year and a further +6% in 2024. Despite the rise in insolvency numbers, both working capital requirement (WCR) and days sales outstanding (DSO) in India are expected to witness a marginal increase of five days and three days, respectively. In general, Asia and Latin America are the only two regions where insolvencies are not projected to return to 2019 levels by 2024.
Recognising India's potential as a growth engine in Asia, Allianz Trade has appointed a new country manager, Imran Khan, to support growth and is planning further investments in the country.
“India is poised to become the second largest economy in Asia Pacific by 2030. An important driving force is its large and fast-growing middle class, which is helping to fuel consumer spending. Furthermore, India is going to be one of the most important long-term growth markets for multinationals in a wide range of industries, including manufacturing such as automotive, electronics, pharmaceuticals, speciality chemicals and in services such as banking, financial services, insurance, health care and IT,” Khan said.
Allianz Asia Pacific also recently announced that it is embarking on a transformation of its IT services and capabilities through the adoption of a standardised and industrialised operating model.
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