India’s National Export Credit Agency Investor Presentation January 2020
Presentation Outline Exim Key Credit Highlights The India Story The Exim Bank Story Appendix 2
Exim Bank: Key Credit Highlights
Exim Bank: Key Credit Highlights 1 100% owned by GoI and 100% owned by the Government of India (‘’GoI’’) and Exim Bank Bonds EMBIG eligible Bonds eligible for inclusion in EMBIG GOI Backstop- Policy Business 2 International investment grade ratings at par with Sovereign India’s engine 5 Exim: for growth of Policy Bank for India’s Economic Diplomacy Proxy to International Sovereign Trade Strong regulatory capital position Financial Strength -strong regulatory capital GoI Backstop – Policy Business guaranteed/ insured by the Policy Role at positon National Level Sovereign 4 3 4
The India Story
India: Strong Macro backed by supportive Policy Environment Resilient GDP Growth (1,2,3) 7.2% 7.0% 6000 8.2% 9.0% 6.8% 8.0% 6.1% 7.4% 5000 7.2% 8.0% 6.8% 6.8% 6.6% 6.1% 5.8% 4000 7.0% 3.8% (US$ bn) 3.6% 3.4% 2779 3.0% 2626 3000 6.0% 2287 2148 2043 54.3% 53.5% 2.9% 2000 5.0% 52.7% 2.4% 2.4% 52.3% 51.8% 2.1% 29.6% 1000 29.3% 4.0% 30.0% 29.4% 30.0% 18.2% 17.7% 17.9% 17.2% 16.1% CY 2017 CY 2018 CY 2019 P CY 2020 P 0 3.0% FY 15 FY 16 FY 17 FY 18 FY 19 India China United States World Agriculture (%) Industry (%) Services (%) Real GDP Growth (%) • World’s 5th largest economy based on nominal GDP in CY 2019, up from being the 7th largest economy in CY 2018. (2) o Nominal GDP for CY 2019: ~US$ 2.9 tn. (2) • World’s 3rd largest economy based on GDP measured in PPP terms in CY2019. (2) o GDP in PPP terms for CY 2019: ~US$ 11.3 tn. (2) • Real GDP during Q2 FY20 grew by 4.5%. (3) Real GDP growth projected at 5% in FY20 . (4) • India jumped up 14 notches to the 63rd position from 77 during 2018-19 on the World Bank’s ‘Ease of Doing Business’ Ranking 2020 . Source: (1) Institute of International Finance (IIF); (2) IMF World Economic Outlook October 2019. Data for CY; (3) Ministry of Statistics and Programme Implementation (MOSPI); (4) Reserve Bank of India (RBI); CY 6 means calendar year ; FYxx means financial year ended March 31, 20xx.; P – IMF Projections
Indian Economy: Key Economic Indicators General Government Debt (% of GDP) (1) Key Macroeconomic Metrices Key Parameters FY17 FY18 FY19 Change Gross Domestic Saving (% of GDP) (3) 30.3 30.5 - - 68.9 68.6 68.3 66.6 65.2 Gross Domestic Investment (% of GDP) (3) 30.9 32.3 - - 17.1 15.2 19.8 20.1 15.6 Gross Fixed Capital Formation (% of GDP) (3) 28.2 28.6 29.3 70 bps Fiscal Deficit (% of GDP) (3) 3.5 3.5 3.4 (10 bps) 51.4 51.5 49.6 49.1 48.2 Revenue Deficit (% of GDP) (3) 2.1 2.6 2.2 (40 bps) FDI Inflows (US$ bn) (2) 60.2 61.0 64.4 5.60% FY 15 FY 16 FY 17 FY 18 FY 19 Exchange Rate (INR/US$, avg.) (2) 67.1 64.5 69.9 8.37% Centre State Inflation/ Policy Rates (2)* Banking Sector Statistics (2) Key Parameters FY17 FY18 FY19 Change Credit Deposit Ratio 73.0 74.2 78.2 400 bps Banking Sector CRAR 13.6 13.8 14.3 50 bps Banking Sector Net NPAs 5.3 6.0 3.7 (230 bps) Provision Coverage Ratio 43.5 48.3 60.5 1220 bps NBFC CRAR 22.1 22.1 19.5 (260 bps) NBFC Net NPAs 4.4 3.3 3.4 10 bps Source: (1) Institute of International Finance (IIF) Database; (2) Reserve Bank of India, Press Releases and Online Database (accessed online on 31/12/2019); (3) Central Statistics Office; * Annual Average CPI inflation 7 with base year 2012=100
Sound External Sector Composition of CAD (2) Trade Trends (1)(2) FY17 FY18 FY19 FY 20 (Apr-Sep) 639 584 150.0 2.5% 538 499 126 480 (US$ bn) 439 (US$ bn) 118 360 96 208 195 308 163 0.5% 75 513 466 -0.6% -1.5% 122 285 -50.0 384 330 304 276 -1.9% 186 -2.1% -1.5% -20.4 -14.4 FY17 FY18 FY19 FY 20 (Apr-Oct) -48.7 -250.0 -3.5% -57.2 Services Exports Services Imports Trade Deficit Services Surplus Primary Income Merchandise Exports Merchandise Imports Secondary Income Current Account Deficit CAD (% of GDP) Merchandise Trade Pattern in FY 19 (1) Services Trade Pattern in FY19 (2) Exports 46 40 44 37 29 28 25 27 53 Exports US$ 208 bn US$ 330 bn 80 28 17 5 19 46 US$ 126 bn US$ 513 bn Imports 141 65 48 55 46 34 32 20 73 Imports 7 22 21 3 40 33 Petroleum Products Gems & Jewellery Chemicals Telecom, computer & information services Travel Electronics Items Machinery Ores & Minerals Transport Financial services Base Metals Transport Equipment Others Other Business services Others Agri & Allied Products Textiles 8 Source: (1) MOCI; (2) Balance of Payment Statistics, RBI; CAD – Current Account Deficit
Sound External Sector Major Trading Partners (1) Regional Trade Direction (1) CIS, USA China Latin Latin America Baltics & CIS, Baltics & Rep. of Korea Saudi Arabia America 5% Hong Kong Switzerland 17 UAE Others Others Singapore Indonesia Africa 4% Germany Africa 0.3 2% 2% Malaysia 9% Belgium 8% (US$ bn) Japan Iraq Iran 88 87 North 60 North 34 America 31 28 24 24 Asia 21 21 19 18 17 17 17 America Exports Imports 8% 49% 17% -5 -4 -5 -8 -12 -6 -54 -4 -10 Europe -11 -17 Asia -21 15% -23 62% Europe Total Trade Trade Balance 20% India’s Export Markets (1) India’s Import Sources (1) USA 16% China 14% USA UAE 9% 7% China UAE 6% 5% Saudi Arabia Hong Kong 4% 6% Singapore Iraq 4% 4% Switzerland UK 3% 4% Bangladesh Hong Kong 4% 3% Rep. of Korea Germany 3% 3% Singapore 3% Netherlands 3% Indonesia Nepal 3% 2% Note: Data for North America does not include Mexico; Mexico has been included in Latin America; the above charts represent India’s merchandise trade for FY 2019 9 Source: (1) MOCI
External Debt vis-à-vis External Reserves Analysis of External Debt vs External Reserves (US$ bn) Mar ‘19 Sep ‘19 External Debt 543.2 557.5 External Reserves 412.9 433.7 External Debt External Reserves As on Mar 2019 As on Mar 2019 5% 2% 6% 1% 11% Commercial Borrowings Short Term FC Assets 38% Non Resident Gold 20% Multilateral SDRs / Reserve Tranche Bilateral Trade Credit 93% 24% (1) ‘Volatile Capital Flows’ is defined to include cumulative portfolio inflows and short-term debt (RBI); (2) Volatile Capital Flows to Reserves ratio peaked at 97.4% in September 2013; (3) Source: RBI/Ministry of 10 Finance, Government of India; * Short-term debt with residual maturity
Recent Policy Measures to Boost Growth Automotive Sector • BS IV vehicles purchased till March 31, 2020 to remain operational for entire period of registration • Revision of one time registration fees deferred till June 2020 • Rate of depreciation on all vehicles (acquired until March 31, 2020) increased to 30% • Both electric vehicles (EVs) and internal combustion vehicles (ICVs) will continue to be registered • Government to focus on setting up infrastructure for development of ancillaries /components including batteries for export Consumption • Ban on purchase of new vehicles for replacing all old vehicles by government departments to be lifted demand Housing Sector • Easing of ECB guidelines for HFCs to facilitate financing for eligible borrowers under Pradhan Mantri Awas Yojana (Housing for All) • The interest rate on House Building Advance shall be lowered and linked to 10 Year G Sec Yields • Stimulus package of INR 25,000 crore announced to provide priority debt financing for the completion of stalled housing projects in the Affordable and Middle-Income Housing sector • INR 102 trillion for developing modern infrastructure during the fiscals 2020 to 2025 ; projects identified are in sectors such as Infrastructure energy, roads, urban development and railways. • Delayed Payments from Government/ Central Public Sector Enterprises (CPSEs) to be monitored by Department of Expenditure • One day required to incorporate a company - Central Registration Centre for name reservation & incorporation. • Amendment to MSME Act - Single definition to be considered Corporate • UK Sinha Committee recommendations on ease of credit, marketing, technology, delayed payments etc. to be considered Affairs & • Banks to issue improved transparent One Time Settlement policy to benefit MSME and retail borrowers in settling their overdues for MSME improved transparency
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