Country risk is low to moderate in India, with the OECD giving India a country risk score of 3; scores comparable with the Philippines, Thailand and Indonesia. This indicates a relatively low to moderate likelihood that India will be unable and/or unwilling to meet its external debt obligations—though, needless to say, individual private and sub-sovereign debtors can and do default). India’s large pile of troubled debts is weighing on the flow of credit to the economy and could cause additional payment delays for businesses. Bad debts are already weighing on credit growth, with some Indian businesses struggling to get loans. Companies in India are also having to wait longer to get paid. It currently takes 75 days for the average business to get payment from its debtors, which is higher than the 66 days noted in 2012. Payment times in Australia are closer to 42 days on average.
India’s is ranked 100 out of a possible 190 on the World Bank’s ease of doing business scorecard. India ranks below the emerging and developing Asian average in all categories except for protecting minority investors, getting credit and accessing electricity. Prime Minister Modi aims to get India within the top 30 economies by 2020.
The risk of expropriation in India is low to moderate. But under legislative enforcement (Enemy Property Act -1968), over 2,100 properties were seized during the wars with Pakistan and China in the 1960s. Even though India has reversed its stance on systematic expropriation, the volatile economic environment suggests that government interference may still be a possibility.
India’s political risk is low to moderate. India scores above the emerging and developing Asian averages on all governance indicators except for political stability and absence of violence.