The confidence among small and mid-market exporters and importers in India has increased significantly in the first half of 2010, according to the latest Trade Confidence Index commissioned by The Hongkong and Shanghai Banking Corporation Limited (HSBC).
India is the second most confident market in the HSBC survey.
The survey covered a total of 17 markets including key economies in the Asia-Pacific region, the Middle East, Latin America, the U.S. and Canada and /Europe.
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Addressing presspersons here on Tuesday Bhriguraj Singh, Head, Trade and Supply Chain, HSBC India, said the survey, carried out with 5,120 trade-oriented small and mid-market enterprises, revealed that globally trade confidence has remained firmly in the positive territory. India ranked second with 133 points out of 200.
The index ranged from 0 to 200 where 200 represented the highest confidence level, zero, the lowest and 100, the neutral level.
The survey parameters included the outlook on trade volume, buyer and supplier risks, need for trade finance, access to trade finance and the impact of foreign exchange on the businesses.
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As Indian companies prepare to keep up with the rising demand, the need for trade finance is most evident in the region and 60 per cent of the respondents expected their needs to increase in the next six months.
Respondents viewed currency volatility and rising interest rates as some of the top barriers to growing import and export businesses.
Mr. Bhriguraj Singh said “the sharp rise in confidence amongst Indian traders over the past few months appears to be well founded based on the increased confidence indices in several of the key trade corridors for India.
However Indian companies were still cautious about the risk of default of their counterparties and the need for trade finance and risk mitigation solutions have increased, Mr. Bhriguraj Singh said citing the survey.