87 pc of Indian firms shift focus to domestic markets amid global uncertainties
New Delhi: Amid global uncertainties, Indian businesses are rethinking their trade strategies to adapt to evolving market dynamics, with 87 per cent of firms pivoting their focus toward domestic clients, prioritising local customer needs to ensure stability, a new HSBC Global report said on Thursday.
About 76 per cent of Indian firms are reassessing their long-term business strategies in response to changes in trade policies, while 80 per cent report exercising greater caution in expansion and investment decisions due to trade-related uncertainties, according to the 'HSBC Global Trade Pulse Survey'.
It examined the business strategies and sentiments of 5,750 international companies in 13 global markets, including 250 firms from India, in relation to tariffs and trade.
'Indian businesses are demonstrating remarkable resilience and adaptability in the face of global trade uncertainties. The findings highlight a pivotal shift, with Indian firms recalibrating their focus toward domestic markets and actively exploring new regions to mitigate risks and seize emerging opportunities,' said Runa Baksi, Head of Global Trade Solutions, HSBC India.
This dual approach underscores the agility of Indian enterprises in navigating complex trade dynamics while maintaining an optimistic outlook on growth, Baksi added.
In light of the current trade dynamics, businesses are adopting various strategies to navigate uncertainties.
A significant 91 per cent of Indian firms are focusing on entering new markets, particularly in regions less affected by trade disruptions, while 87 per cent are shifting their attention to domestic markets, prioritizing local customers, and minimising international exposure.
Additionally, 82 per cent are choosing to exit high-risk markets impacted by trade uncertainty, and 87 per cent are exploring mergers and acquisitions to bolster their market position or strengthen supply chains through strategic partnerships.
The survey also shows 83 per cent of Indian firms (73 per cent global average) anticipate a substantial rise in cost in the next six months due to trade uncertainties, with 51 per cent of these firms being concerned by the escalating expenses driven by tariffs and other trade-related factors.
To address these challenges, 42 per cent of Indian companies have already adjusted their prices to account for higher costs, while 48 per cent are planning similar measures.
Additionally, 45 per cent of Asian firms have increased their inventory levels to mitigate supply chain disruptions, with another 48 per cent of Indian firms intending to follow suit, said the report.
--IANS
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