India’s business fundamentals rank collapsed 8 positions: Agility Logistics Index 2020

February 11, 2020: In its new survey report ‘Agility Emerging Markets Logistics Index 2020’, the global logistics company reported that “India’s business fundamentals rank collapsed, dropping the market eight positions to 18th,” even though the country has maintained the second position in the overall ranking after China.

The survey blames India’s fall in the business fundamentals sub-Index to the unevenness of policy across the country’s regulatory system. The ranking had two more sub-indexes: Domestic Opportunities Index & International Opportunities Index and India remained at second position for both.

Why did the business fundamentals rank collapse?
“Second placed India, saw much more varied performance. GDP growth is faltering – at 4.5% in Q3 2019, growth has slowed for seven consecutive quarters and is at the lowest level seen since 2013. The country’s automotive sector has slumped as consumer lending has fallen, which combined with slowing economic growth has constrained spending and undermined confidence. These factors are amongst the reasons India’s business fundamentals rank collapsed, dropping the market eight positions to 18th. The challenges appear manageable, however, with analysts calling the credit squeeze ‘cyclical’. While 2020 may be another tough year, medium- and long-term prospects remain bright,” says the report.

Why Modi’s plan to double GDP to $5trillion by 2024 is impossible?
“Asserting re-election as confirmation of his pro-business agenda, Prime Minster Narendra Modi has announced bold plans to nearly double India’s GDP to $5trillion by 2024. Such an ambitious plan is impossible at current growth rates which the IMF forecasts at 6.1% in 2019 – the lowest level recorded in more than 6 years” states the report.

Just released: The 11th @Agility #EmergingMarkets #Logistics Index. Will #China keep its place at the top of the rankings? What topics have been keeping #supplychain executives awake at night? We've got the full rundown of 50 #emergingmarkets: https://t.co/GcH1frgEs8 pic.twitter.com/H8KKL1VsNE

— Agility (@Agility) February 10, 2020

Logistics industry expecting global recession in 2020
Logistics industry officials are expecting a recession in 2020 due to downward pressure on international trade volumes, unreliable growth forecasts, and on-going friction between the U.S. and China.

Sixty-four percent of supply chain executives surveyed for the 2020 Agility Emerging Markets Logistics Index say a recession is likely in the next 12 months. Only 12 percent of the 780 respondents say a recession is unlikely.

Respondents with operations and investments in China say if they were to move production or sourcing from the country, Vietnam and India were top choices of places to relocate.

“The fears of a recession are not to be taken lightly, especially because of uncertainty about the impact of the coronavirus outbreak,” says Essa Al-Saleh, CEO of Agility Global Logistics. “A positive sign, however, is that a large number of emerging markets economies were able to weather an array of issues — political and social unrest, structural problems, even international sanctions for some — without losing much ground in the past year.”

The ongoing trade war between the #US & #China continues to drive uncertainty and put pressure on global trade volumes. What does that mean for the #logistics industry? #AEMLI2020 https://t.co/kixaPvHyIy pic.twitter.com/LXDZTpTpno

— Agility (@Agility) February 11, 2020