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India open for trade and competition

India open for trade and competition article image

A report on payment behaviour issued by international credit agency Coface has revealed that more Indian companies  have started to adopt open accounts in their business dealings, a significant step for a method that was relatively unknown a decade ago. "The use of open account payment terms has now become common practice in India," according to Coface’s survey. The method is used "as a commercial argument in India in a competitive environment". More than 70 percent of surveyed companies use an open account, although most grant only 30-day terms, half that of countries such as China and Australia, which both typically grant 60 days. "The vast majority of respondents cited the need to retain their existing client bases and customer expansion as the main reason for adopting the open account," read the Coface report. "Increasing competition from countries such as China and South East Asia and the uncertainty of orders from USA, EU has driven Indian firms to adopt a more customer-focused payment strategy."

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