Country risk

Country risk is low to moderate in India. The OECD country risk grade is 3; comparable with the Philippines, Thailand and Indonesia. This indicates a relatively low to moderate likelihood that India will be unable and/or unwilling to meet its external debt obligations—though individual private debtors can and do default.


India ranked 63rd out of a possible 190 countries on the World Bank’s latest ease of doing business scorecard, improving 14 places from the prior year. Dealing with construction permits, trading across borders, protecting minority investors, getting electricity and credit are easier in India relative to most emerging Asian economies. But enforcing contracts, starting a business, paying taxes and registering property are still more difficult.

The risk of expropriation in India is low to moderate. According to the US investment climate statements, the government has made progress in recent years in strengthening regulations around expropriation and compensation. This includes the successful carrying out the largest spectrum auction in the country’s history in 2016, the implementation of transfer pricing, the introduction of a goods and services tax in 2017 and new insolvency and bankruptcy laws.

India’s political risk is low to moderate. The ongoing Kashmir conflict between India and Pakistan poses ongoing military risks, while longstanding border issues with China also recently intensified. Such disputes, if they escalate, could weigh on business confidence and undermine the economic recovery.

India scores above the emerging and developing Asian averages on all governance indicators, except for political stability and absence of violence.