“India is progressively getting unlocked. India has all of the raw material that it needs because it’s got significant supply of labour in order to be a supplier to the world,” he said.
The world’s fifth largest economy has improved over the years in terms of ease of doing business as bureaucratic red tape has lessened and many reforms such as the goods and services tax has made compliance easier.
“The government policies that have been put in place in India over the past few years, whether it is the digitization of the economy, or simplification of the GST… all of that are making India a much more attractive market, much more attractive opportunity for India to be a supplier to the world,” he added.
HSBC joins the growing list of global banks which have reworked their emerging markets strategy due to tighter regulations post the global financial crisis and accelerating digitisation.
‘Markets Likely to Remain Volatile’
Citigroup recently sold its Asian retail franchise, and JPMorgan, Barclays and Deutsche have realigned their strategy to squeeze more from corporates as the Indian domestic retail market is being served by the nimbler and .
Quinn believes global trade is leading to ‘re-globalisation’ where multiple supply chains are springing up in many geographies rather than one or two which offered to be the cheapest. This ‘re-globalisation’ is being driven by geopolitics and Covid experience that exposed dependency on one or two suppliers.
Global financial markets are likely to remain volatile as central banks in different parts of the world take divergent routes to tame price pressures which are running at multi-decade highs causing some social unrest.
“There’s a major economic challenge for the world with the level of inflation where it is,” said Quinn. “There will be a correction in the demand curve, because inflation is starting to impact disposable income. I believe some of the demand side of the equation is going to start to soften.”
Recently Federal Reserve chairman Jerome Powell signalled that he’s on course for a third 75 basis points increase in interest rate and the European Central Bank also reiterated its commitment to raise rates to douse the inflation fire sweeping across the continent.
India is among the four pillars of the British bank’s redrawn growth strategy after years of adjustments.
“We certainly see India as an investment market… also China, Singapore, and Hong Kong,” said Quinn. “They are the four pillars of strong growth across all of Asia. And we’re investing in all of those four pillars.”