India set to be fastest growing trade market in the world: HSBC Global Trade Forecast

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Emerging Markets to Drive Global Trade Rebound The HSBC Trade Forecast highlights India's critical role in world trade growth over the entire period till 2030. (Reuters) Emerging Markets to Drive Global Trade Rebound The HSBC Trade Forecast highlights India's critical role in world trade growth over the entire period till 2030. (Reuters)
SummaryHSBC highlights India's critical role in world trade - India also tops HSBC confidence index.

Rising bilateral trade with China, growing consumer wealth and high confidence level among its traders will push India to the top league of trading nations beginning 2013 and it is set to retain the fastest growth rate till 2020, says HSBC.

"The growing Indo-China bilateral trade is set to increase significantly and the country will be the fastest expanding market for Chinese products, with import growth averaging 20 per cent annually during 2013-15 and 17 percent during 2016-20, while exports clipping at 23 per cent during 2013-15 and 19 percent during 2016-20," says the HSBC trade forecast released today.

India tops the tables for all 23 markets surveyed as either their fastest import or export growth partner out to 2020, it said.

The country also tops the HSBC trade confidence index apart from having the most promising global outlook with 61 per cent of traders expecting to see growth.

"With a score of 135, India is the most confident country. Optimism has improved in the past six months with 71 percent of importers and exporters surveyed expecting trade volume to increase and another 24 per cent anticipating business to remain at current levels," said the report that covered 5,800 exporters, importers and traders over the past six months in 23 markets.

This upside to trade will be backed by the growing consumer wealth that will push the country to be the fastest growing trade market - import or export or both - among the 23 largest trading markets, according to the forecast.

The optimism comes from a dual speed trade rebound as South-South corridors become more established, driving growth to 2015 before being rejoined by the developed world in the later part of the decade, notes the report.

As per the report, India and China will be joined by emerging trading nations like Vietnam, Indonesia, Egypt, Turkey, Mexico and Poland to record significant trade growth in the next three years.

South-South trade continues to show up as a trend.

Brazil's fastest growing trade partners are India, Vietnam and China and Mexico's imports from India and China will grow 13.9 percent and 13.4 percent respectively between 2016 and 2020, the HSBC report said.

Indonesian exports, led by commodities, to Asia (ex-Japan) are expected to grow at around 10 percent annually during 2021-30, with shipments to India and China leading the growth during 2013-15.

Singapore's exports to Asia (ex-Japan) are forecast to rise by 7 per cent on average during 2021-30, again led by China, India and Vietnam.

Bangladesh is forecast to develop its role linking the new emerging Asia, driven by trade growth with India throughout the period. Its trade is expected to jump 19 percent during 2013-15 and 14 percent during 2016-20, the report said.

Another major trading power will be Malaysia, which is set to see 9 per cent spike in its exports to Latin America during 2016-20, with its exports to Brazil alone growing at 14 percent annually during this period.

Vietnamese exports are expected to clip at double-digits annually throughout the forecast period of 2012-30.

The report said China will overtake the US as Vietnam's largest export partner by 2030 but the US, followed by Japan and Korea.

Australia's dependence on Asian markets for commodities shipments will continue during this period, recording an annual growth of (ex-Japan) 6 percent during 2013-15.

Hong Kong's exports are forecast to more than double from 4.8 per cent in 2012 to 11.4 percent annually through 2013-15. Although China will remain Hong Kong's most important trading partner, other developing East Asian nations will become increasingly important, with exports to Vietnam growing 8 percent in the decade to 2030.

India set to be fastest growing trading nation

(PR Newswire) Emerging Markets to Drive Global Trade Rebound The HSBC Trade Forecast highlights India's critical role in world trade growth over the entire period till 2030.

As per the Forecast, India represents the fastest growing import or export partner (or both) between 2013-15 or 2016-2020 for 23 markets. India's trade growth can be linked to its growing consumer wealth and emerging middle class; investment in infrastructure development; the impact of Foreign Direct Investment (FDI); its diverse range of exports and a move to produce goods higher up the value chain, and its developing role as a supply chain hub for Asia.

'Dual speed' growth driven by South-South trade- The HSBC Trade Forecast is outlining a dual speed trade rebound as South-South corridors become more established, driving growth to 2015. before being rejoined by the developed world in the later part of the decade.

According to the HSBC Trade Forecast, powerhouses India and China will be joined by emerging trading nations including Vietnam, Indonesia, Egypt, Turkey, Mexico and Poland to record significant trade growth in the next three years. As these economies industrialise, trade in higher value goods will increase, reflecting the greater maturity of these faster-growing economies with large populations and rapidly expanding middle-class consumer markets.

By 2020, HSBC expects that forward-thinking companies worldwide will have exploited multiple trade corridors and partnerships, created effective networked supply chains, and tightened efficiency in their operations as a result. This trend continues through 2021-30, contributing to a stabilising of trade growth which also reflects the growing maturity of emerging markets.

Key market and trade corridor trends from the HSBC Trade Forecast:

- India tops the tables for all 23 markets surveyed as either their fastest import or export growth partner out to 2020. - Bilateral trade between China and India is set to increase significantly. India will be the fastest expanding market for Chinese products, with export growth averaging 20% a year during 2013-15 and 17% a year during 2016-20. Meanwhile, India exports to China are set to grow 23% between 2013-15 and 19% in 2016-20.

- South south trade continues to show up as a trend. Brazil's fastest growing trade partners are India, Vietnam and China and Mexico's imports from India and China will grow 13.9% and 13.4% respectively between 2016 Ė 2020.

Indonesia exports to the rest of Asia (ex-Japan) are expected to grow at a solid pace of close to 10% a year over the period 2021-30. The fastest growing trade routes will be to India and China over the medium term (2013-2015), led by their insatiable demand for commodities.

- Singapore's exports to Asia (ex-Japan) are forecast to rise by a fairly robust 7% a year on average during 2021-30. But the fastest growing trade routes will be with China, India and Vietnam over this period.

- Bangladesh is forecast to develop its role linking 'emerging Asia', driven by trade growth with India throughout the period. Bangladesh's trade is expected to increase 19% between 2013-2015 and 14% between 2016 -2020.

- Malaysia is forecast to see strong growth to Latin America in the years to 2020, at approximately 9% in the period 2016-20, underpinned by a greater sophistication in the products imported by the continent, particularly in electronic goods. Malaysia's exports to Brazil are predicted to grow 14% annualised over the same period.

- Vietnam is expected to record double digit annualised trade growth throughout the forecast period 2012-30. China will have overtaken the US as Vietnam's largest export partner by 2030 but the US, Japan and Korea will remain key sources of demand for Vietnam.

- Australia's main export markets are in Asia, and this will continue. Australia's exports to Asia (ex-Japan) are forecast to grow by 6% a year in 2013-15.

- Hong Kong's total exports are forecast to double from 4.8% in 2012 to 11.4% annually throughout 2013-2015. Although China will remain Hong Kong's most important trading partner, other developing East Asian nations will become increasinglyimportant, with exports to Vietnam set to grow by 8% a year in the decade to 2030.

HSBC Trade Confidence Index: With a score of 135, India is the most confident country according to the HSBC Trade Confidence Index. Optimism has improved in the last six months with 71% of importers and exporters surveyed expecting trade

volumes to increase and another 24% anticipating business to remain at current levels. Their global outlook is more positive than other countries in the region as well with 61% of Indian traders expecting to see growth.

At the same time, however, Indian sellers are not overly confident in their overseas business partners as 43% foresee an increase in defaults. This is double what it was just six months ago. To minimise risk exposure, suppliers intend to use trade finance from banks, export credit insurance and other financial instruments.

In fact, 65% of Indian businesses say they will need increased levels of trade financing in the coming months and will look to their banks first for help. Indian importers' confidence in the ability of their overseas suppliers to honour agreements is also slipping. Twelve months ago only 13% expected an increase in non-delivery while 43% do today. Sandeep Uppal, Managing Director and Head, Commercial Banking, HSBC India said: "Given an expected pick-up in growth in India and a relatively stable global economy in the coming years, exports to all regions are expected to grow fairly robustly, helped by India's wide range of export products. These increasingly will move away from traditional goods to higher value goods and hi-tech products as India steadily develops its technology as well as manufacturing base."

Notes to Editors: About the HSBC Trade Forecast - Modelled by Oxford Economics Oxford Economics has tailored a unique service for HSBC which forecasts bilateral trade for total exports/imports of goods, based on HSBC's own analysis and forecasts of the world economy to generate a full bilateral set of trade flows for total imports and exports of goods, and balances between 180 pairs of countries.

Oxford Economics produces a global report for HSBC, plus regional reports and country specific reports on the following 23 countries: Hong Kong, China, Australia, Indonesia, Malaysia, India, Singapore, Vietnam, Bangladesh, Canada, USA,

Brazil, Mexico, Argentina, UK, France, Turkey, Germany, Poland, Ireland, UAE, Saudi Arabia, and Egypt.

Oxford Economics employs a global modelling framework that ensures full consistency between all economies, in part driven by trade linkages. The forecasts take into account factors such as the rate of demand growth in the destination market and the exporter's competitiveness. Exports, imports and trade balances are identified, with both historical estimates and forecasts for the periods 2013-15, 2016-20 and

2021-30.

Oxford Economics - formerly Oxford Economic Forecasting - was founded in 1981 to provide independent forecasting and analysis tailored to the needs of economists and planners in government and business. It is now one of the world's leading providers of economic analysis, advice and models, with over 500 clients. Oxford Economics commands a high degree of professional and technical expertise, both in its own staff of over 70 professionals based in Oxford, London, Belfast, Paris, the UAE, Singapore, Philadelphia and New York, and through its close links with Oxford University and a range of partner institutions in Europe and the US.

Trade Confidence Index - The HSBC Trade Confidence Index covers a total of 20 markets and is the largest trade confidence survey globally. The current survey comprises six-month views of 5,800 exporters, importers and traders from small and mid-market enterprises on: trade volume; buyer and supplier risks; the need for trade finance; access to trade finance; and the impact of foreign exchange on their businesses.

HSBC in India The Hongkong and Shanghai Banking Corporation Limited in India offers a full range of banking and financial services to over 1 million customers through its 50 branches and over 140 ATMs across 29 cities.

HSBC is one of India's leading financial services groups, with over 30,000 employees in its banking, investment banking and capital markets, asset management, insurance broking, insurance, software development and global resourcing operations in the country. It is a leading custodian in India. Nearly 6% of India's exports and imports pass through HSBC India's banking channels.

The asset management business in India is one of the leading players in the industry. The Bank is at the forefront in arranging deals for Indian companies investing overseas and foreign investments into the country. It has a fully enabled and established insurance advisory of international standards. It is one of the leading players in domestic and export factoring, and one of the leading banks for an increasing number of SMEs.

With its extensive reach across Asia, the Americas and Europe, HSBC has the capacity to offer complete banking and financial solutions to India's burgeoning economy. In 2008, it acquired a majority stake in IL&FS Investsmart (now renamed HSBC InvestDirect) that has enabled it to offer retail brokerage services to its customer across a wider geography. It has also formed a joint venture life insurance company with Canara Bank and Oriental Bank of Commerce that is among the

Top ten private life insurers in the country today.

HSBC's network of branches is located at Ahmedabad, Bangalore, Chandigarh, Chennai, Coimbatore, Gurgaon, Guwahati, Hyderabad, Indore, Jaipur, Jodhpur, Kochi, Kolkata, Ludhiana, Lucknow, Mumbai, Mysore, Nagpur, Noida, New Delhi, Nasik, Patna, Pune, Raipur, Surat, Trivandrum, Thane, Vadodara and Visakhapatnam.

HSBC Holdings plc HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 6,900 offices in over 80 countries and territories in Europe, the Asia-Pacific

region, North and Latin America, and the Middle East and North Africa. With assets of US$2,652bn at 30 June 2012, the HSBC Group is one of the world's largest banking and financial services organisations.

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