India11 Mar 2013
India would seem to be a natural home to a strong, expanding leasing industry. Although still in the ‘emerging’ stages, it is already the 10th largest economy globally and is predicted to surge to forth in the next decade.
This dynamism is in part founded on its huge and relatively young population, of which the majority remain of working age rather than having an ageing demographic, as is the case with many other countries. It has a burgeoning middle class, which is estimated will soon exceed the total population of the US if it hasn’t already done so, and this has fuelled a significant internal market with the scope for considerable expansion. India’s potential as a global hub, particularly for services and IT, is boosted by the large number of English speakers.
India’s economic growth over the last two decades is also based on positive financial policy changes. With the so-called ‘liberalization’ of the economy in 1991, the Indian government moved decisively towards a more open market model and welcomed foreign investment in many sectors that had been closed to external competition.
However, there have been downsides. The economy has faltered in the last two to three years, with the rate of growth slowing to a level that saw India’s credit rating threatened with a downgrade to ‘junk’ status. This spurred Manmohan Singh's government to initiate measures to boost business sentiment and improve the investment climate, including opening the retail and aviation sectors to more foreign investment; and the central bank, the Reserve Bank of India, to cut lending rates in an attempt to curb persistently high inflation.
This Country Survey aims to provide a balanced view of the equipment finance and auto leasing market in India. The survey will provide a summary of leasing activity; assess the current economic climate and the incentives for and constraints on doing business in India; provide comment from key industry figures on the market, its outlook and the challenges and opportunities that face it; and review the latest developments in taxation and how these reforms affect leasing.