HSBC’s Noel Quinn says the center’s policies make India a more attractive market
“India is gradually opening up,” he said. “India has all the raw materials it needs because it has a large supply of labor to become a supplier to the world.”
The world’s fifth largest economy has improved over the years in terms of ease of doing business as bureaucracy has decreased and many reforms such as the Goods and Services Tax have made compliance easier.
“Government policies that have been put in place in India over the past few years, whether it is digitizing the economy, simplifying the GST… all makes India a more attractive market, and a much more attractive opportunity for India to be a supplier to the world.”
HSBC joins the growing list of global banks that are reshaping their strategy for emerging markets due to tightening regulations after the global financial crisis and accelerating digitization.
Markets are likely to remain volatile
Citigroup recently sold off its Asian retail franchise, and JPMorgan, Barclays and Deutsche have rethought their strategy to squeeze more companies as the Indian domestic retail market is being served by a nimble man.
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Quinn believes that global trade leads to a “reglobalization” where multiple supply chains appear in many geographies rather than one or two considered the cheapest. This “reglobalization” is driven by geopolitics and the Covid experience which has revealed dependence on one or two suppliers.
Global financial markets are likely to remain volatile as central banks in different parts of the world are taking divergent ways to tame price pressures that are reaching multi-decade highs causing some social unrest.
“There is a major economic challenge to the world with the level of inflation where it is,” Quinn said. “There will be a correction in the demand curve, because inflation is starting to affect disposable income. And I think some of the demand side of the equation is going to start to subside.”
Recently, Federal Reserve Chairman Jerome Powell indicated that he is on his way to increase the interest rate by 75 basis points, and the European Central Bank has reiterated its commitment to raise interest rates to quell the inflation fire sweeping the continent.
India is among the four pillars of the growth strategy adopted by the British Bank to be redrawn after years of adjustments.
“We definitely see India as an investment market…as well as China, Singapore and Hong Kong,” Quinn said. “It’s the four pillars of strong growth across Asia. We are investing in all four of those pillars.”