Indian companies with an ASEAN focus are highly optimistic about business growth in the region, according to “Borderless Business: India-ASEAN Corridor,” a strategic report that explores high-potential opportunities for cross-border growth commissioned by Standard Chartered.

Indian companies expect their business to increase production in ASEAN, with a more than 90 per cent projected growth in revenue over the next 12 months.

Access to the large and growing ASEAN consumer market (90 per cent), availability of an abundant and skilled workforce (51 per cent) and access to a global market enabled by a network of Free Trade Agreements (44 per cent) are regarded as the most critical drivers for expansion into the region by senior executives Indian companies.

The Regional Comprehensive Economic Partnership is also expected to attract more investments into the 10-nation bloc. Some 63 per cent of respondents indicate that their company will increase investments into ASEAN over the next 3-5 years on the back of the ratification of the RCEP agreement.

In terms of target countries within ASEAN, survey respondents consider Indonesia (61 per cent) the top market that offers the best expansion opportunities for their company, followed by Viet Nam (49 per cent), Malaysia and Singapore (46 per cent each).

The survey also showed Indian companies recognise a wide range of risks despite the opportunities. The top three identified risks were the COVID-19 pandemic or other health crises (85 per cent), a slow revival of the economy and a drop in consumer spending (73 per cent), as well as geopolitical uncertainty and trade conflicts (54 per cent).

Furthermore, more than 60 per cent of the respondents said that adapting their business model to industry practices and conditions within ASEAN, regional understanding regulations, payment methods and infrastructure, as well building relationships with suppliers and adapting supply chain logistics were the most significant challenges in the next 6 to 12 months.

To mitigate these risks and challenges and drive resilient and rebalanced growth in ASEAN, the survey respondents consider entering new partnerships/joint ventures to increase market presence (73 per cent), investing in leadership and talent development (59 per cent) and driving sustainability and ESG (Environment, Social and Governance) initiatives (41 per cent) as the most important areas for their companies to focus on.

To support their growth, these companies said they are seeking banking partners with one-stop corporate financing and capital raising services (59 per cent), digital platforms for foreign exchange, transaction banking (54 per cent) and foreign exchange hedging and comprehensive multi-currency settlement services (46 per cent).

Gaurav Bhatnagar, Head, Trade and Working Capital, India and South Asia, Standard Chartered, said: “ASEAN is one of India’s largest trading partners. With its ‘Act East Policy, India aims to enhance trade and commerce with its eastern neighbours, positioning the ASEAN region as an important player to deliver future growth aspirations for the nation.”

“Standard Chartered is committed to delivering sustainable trade finance solutions to our clients. This trade corridor is expected to grow rapidly with a strong Government impetus and a perceptible shift in consumer demand favouring clean technology.

“Sectors like IT services, trading, pharmaceuticals, automobile (particularly electric vehicles) and renewable energy offer significant export opportunities to Indian firms. With Standard Chartered’s long-standing and prominent presence in ASEAN and India, we are uniquely positioned to facilitate the growth of trade and commerce in this vital trade corridor.”

Michele Wee, CEO of Standard Chartered Bank Vietnam, said: “Viet Nam is a fast-growing economy which offers a sizeable domestic market, young, well-educated, tech-savvy and cost-competitive labour force, advantages of being a member of multiple free trade agreements and a strategic location.”

“The country is also a key link in the global supply chain. We believe that Viet Nam continues to offer appealing business and investment opportunities for foreign businesses and investors. Levering our deep local knowledge drawing our 118 years of history in Viet Nam, combined with our unrivalled international expertise, Standard Chartered is committed to supporting our clients in Viet Nam and overseas in doing cross-border business and realising their growth ambitions.” — VNS