Indian companies are most concerned about rising protectionism across the world, finds an HSBC survey covering 6,000 companies across 26 countries.
The survey shows that nine out of 10 businesses in India feel that governments are turning increasingly protectionist, leading to a rise in the cost of doing international business, an altering of trade routes and raising hurdles to obtaining trade finance, Business Standard reported.
This is significantly higher than the global average where three in five (60 percent) think governments are becoming more protective of their domestic economies, the newspaper reported.
Other regions where the sentiment is strongest among companies are the Middle East and North Africa (70 percent) and Asia-Pacific (68 percent).
In the US, 61 percent are concerned while in Europe the number is half the total number of companies here, according to the survey.
Commenting on the survey, Rajat Verma, Head of Commercial Banking - HSBC India, said: “An increase in protectionist sentiment is causing concern about the cost of doing cross-border trade and international business. Companies are adopting business plans and relationships to participate in shifting supply chains.” Mr Verma was quoted on Business Standard.
Strategies by companies include increasing regional trade, establishing joint ventures or local subsidiaries in more markets and capitalising on trends in consumer demands and digital technologies, he pointed out.
As a result of the high level of concern about protectionism, initiatives aimed at lowering trade barriers are viewed positively in India. Firms are near unanimous on the positive impact of Asean 2025 and SAFTA (South Asian Free Trade Area) on their businesses. And, perhaps surprisingly, even with the negative press around H-1B visas, most firms (63 percent) believe that US policies and its regulatory environment will be beneficial for their businesses. The firms are less optimistic about China’s Belt and Road Initiative though, with 22 percent respondents indicating a negative impact on their business, Live Mint reported.