India is a promising emerging market for Danish exports and Danish investments.
India is subject to major regional and local differences, and periodic uncertainty surrounding local political developments especially. There is a risk of spells of local unrest as a result of chiefly religious, social, political or ethnic tensions. However, India's democratic tradition is firmly entrenched and the opinion overall is that the domestic political situation in the country is set to stabilize within the next few years. India enjoys good relations with the EU and the USA, together with the majority of Asian countries. There is, however, a risk that the already strained foreign policy relations with Pakistan, as a result of factors such as unresolved border disputes. China and India are expanding their cooperation in a number of areas. Unresolved border issues are however straining the development.
India has enjoyed high economic growth rates for a number of years now, and these are expected to continue climbing in the years ahead. India's growth is domestically driven to a great extent. The service sector is taking on increasing significance, and within several sectors there is potential for sustained global expansion. The need still remains for modernization of the agricultural sector, but reforms are slow in coming. The Indian government, which has a good track record in meeting payments, is expected to continue servicing its foreign debts over the coming years.
EKF's assessment is that India generally has relatively well-run institutional frameworks, but that exports and investments in India are associated with moderate risk. The greatest risk lies in the commercial climate, where corruption in particular may hamper investments.
EKF is anticipating an increase in commitments to India in the coming years, as this is one of the most promising emerging markets with high economic growth in sight and mounting interest from Danish business and industry.