India Trade Finance Market Size
| Study Period | 2020 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2020 - 2022 |
| CAGR | 8.15 % |
| Market Concentration | Medium |
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*Disclaimer: Major Players sorted in no particular order |
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India Trade Finance Market Analysis
India Trade Finance Market is estimated to be at USD 2 billion in the current year and witnessing a growth rate of 8.15% during the forecast period.
Various financial products used by organizations to handle global trade and commerce are referred to as "trade finance," sometimes known as "export finance." Banks, trade finance firms, export credit organizations, importers, and exporters frequently use it. Trade finance in various forms may prove to be one of the most important modes of sufficient funding for Indian business houses. Unlike loan facilities, the rate of default in trade finance is very low as it is purely dependent on the business strength and past record of the debtor, and the need of the hour is to have a level playing field for all the onshore and global financiers.
With the impact of the COVID-19 pandemic breakout, more and more trade and commerce operations were managed remotely using a variety of electronic devices, including optical character recognition (OCR), QR codes, and RFID readers. Over the past century, trade finance has played a significant role in the growth of global trade, and now, bank-mediated transactions account for more than a third of global trade, or trillions of dollars annually. The Indian trade finance market is increasingly applying technologies such as blockchain, artificial intelligence (AI), machine learning (ML), and the Internet of Things (IoT) that will boost the trade finance market in the country.
India Trade Finance Market Trends
This section covers the major market trends shaping the India Trade Finance Market according to our research experts:
Digitalization is Driving the Market
Many governments are spending a lot of money to create "digital public roadways" that businesses can use. These measures include opening bank accounts and providing each citizen with a unique form of identity. The fact that mobile phone penetration in India is higher than 100% and that smartphone penetration makes up between 50% and 60% of this total helps the government of India in its efforts. These elements have combined to change India's payment systems, which are now available around the clock and making enormous strides toward the establishment of "contextual banking" (also known as "in-app purchases"). These are payment choices for customers who already use "freemium" internet services, such as Spotify, which offers both basic free and paid ad-free options.
Consumer experience is a major area of focus, as smartphone adoption and digitalization allow businesses to interact directly with their clientele. However, the business digitalization process is neither a magic bullet nor a quick answer. A tremendous amount of labor and significant skill is required to ensure that the architecture of current systems can be developed to the point where it can handle increased frequency, volume, and transaction size. The digitalization of their treasury function, in conjunction with the automation of their fundamental banking operations, enables foreign multinationals operating in India to optimize their cash forecasting, liquidity, and FX exposure while freeing up more time to concentrate on important strategic areas.
Adoption of Trade Finance by MSME is Driving the Market
In India, small businesses frequently have very limited access to loans and other forms of short-term finance to cover the cost of the commodities they want to buy or sell. Importers and exporters were able to close the financial gap with the assistance of the short- to medium-term operating capital provided by trade finance. Additionally, it offered security for the items or services that were being imported or exported and enabled risk mitigation through auxiliary elements or goods. Small businesses are better able to trade larger volumes since their end customers have stronger trade credit. Due to the growing importance of the trading system, business problems like finding strange behavior and figuring out what's at risk are being solved. This has helped the trade finance sector grow.
For MSMEs, the complexity of transactions involving trade financing is a major problem. Multiple parties are involved in complex workflows, which necessitate a great deal of manual effort and frequently necessitate the exchange of paper documents, increasing operational costs and credit risk. A more robust global trade finance ecosystem might be able to overcome these issues by connecting the digital islands. Realizing this goal requires an "interoperability layer" that encourages ubiquitous access across networks and platforms. Instead of viewing trade finance as a service offered by a separate bank network, network interoperability enables companies to use it as a native part of their supply chain platform.
India Trade Finance Industry Overview
The study gives a general overview of the trade financing market's competition and gives a quick rundown of recent merger and acquisition transactions. It comprises corporate profiles of a few trade, finance, and trade technology companies in the industry, in addition to banks. The major players include SBM Bank, HDFC Bank, Yes Bank, Terker Capital, and Standard Chartered, among others.
India Trade Finance Market Leaders
SBM Bank
HDFC Bank
Yes Bank
Terker Capital
Standard Chartered
*Disclaimer: Major Players sorted in no particular order
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India Trade Finance Market News
- July 2022: A new foreign exchange mechanism has been introduced by the Reserve Bank of India (RBI) to stabilize the Indian economy and promote increased international trade. According to a public statement made on July 11th, the system will make it easier for international trade transactions to be made in Indian rupees (INR). Indian importers and exporters can now use their own currency instead of US dollars to pay for transactions. This arrangement needs to be approved by banks first.
- December 2022: Japan's MUFG Bank announced the execution of a INR 450 crore (USD 54.3 million) sustainable trade finance facility for Tata Power. MUFG has extended this financing for the procurement of two solar power projects of TP Kirnali Limited (TPKL).
India Trade Finance Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS AND INSIGHTS
4.1 Market Overview
4.2 Market Drivers
4.3 Market Restraints
4.4 Industry Attractiveness - Porters' Five Forces Analysis
4.4.1 Threat of New Entrants
4.4.2 Bargaining Power of Buyers
4.4.3 Bargaining Power of Suppliers
4.4.4 Threat of Substitutes
4.4.5 Intensity of Competitive Rivalry
4.5 Insights on Various Regulatory Trends Shaping Trade Finance Market
4.6 Insights on Impact of Technology and Innovation in Trade Finance Market
4.7 Impact of COVID-19 on the Market
5. MARKET SEGMENTATION
5.1 Service Provider
5.1.1 Banks
5.1.2 Trade Finance Companies
5.1.3 Insurance Companies
5.1.4 Others
5.2 Application
5.2.1 Domestic
5.2.2 International
6. COMPETITIVE LANDSCAPE
6.1 Market Concentration & Overview
6.2 Company Profiles
6.2.1 SBM Bank
6.2.2 Terker Capital
6.2.3 HDFC Bank
6.2.4 Yes Bank
6.2.5 Standard Chartered
6.2.6 Kotak Mahindra Bank
6.2.7 Federal Bank
6.2.8 Bank of Baroda
6.2.9 CITI Bank
6.2.10 HSBC*
- *List Not Exhaustive
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
8. DISCLAIMER AND ABOUT US
India Trade Finance Industry Segmentation
The research offers a thorough overview of the market's rivals. It also offers a financial performance analysis of the market's listed companies. The report offers comprehensive information on the companies' most recent developments and the competitive landscape. The India Trade Finance Market is segmented by Service Provider (Banks, Trade Finance Companies, Insurance Companies, and Others) and by Application (Domestic and International). The report offers market size and forecasts for the India Trade Finance Market in value (USD million) for all the above segments.
| Service Provider | |
| Banks | |
| Trade Finance Companies | |
| Insurance Companies | |
| Others |
| Application | |
| Domestic | |
| International |
India Trade Finance Market Research FAQs
What is the current India Trade Finance Market size?
The India Trade Finance Market is projected to register a CAGR of 8.15% during the forecast period (2024-2029)
Who are the key players in India Trade Finance Market?
SBM Bank, HDFC Bank, Yes Bank, Terker Capital and Standard Chartered are the major companies operating in the India Trade Finance Market.
What years does this India Trade Finance Market cover?
The report covers the India Trade Finance Market historical market size for years: 2020, 2021, 2022 and 2023. The report also forecasts the India Trade Finance Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Trade Finance in India Industry Report
Statistics for the 2024 Trade Finance in India market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Trade Finance in India analysis includes a market forecast outlook 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
