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India generous in trade credit to foreign B2B customers

19 Sep, 2019

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A survey* has revealed that companies in India grant trade credit to their foreign B2B customers “because their customers demand it and to boost business internationally. Ease and convenience are also frequent reasons for trading on credit with B2B customers abroad.

The top three reasons for refusing to grant trade credit to foreign B2B customers are: the poor payment behaviour of the customer (mentioned by 57.1% of respondents), a lack of information on the customer’s business and payment performance (38.1%) and high economic and political risk in the customer’s country (mentioned by 33.3% of respondents). Domestic B2B customers of respondents in India are given, on average, 34 days to settle their invoices. This is six days longer than in 2017.

In contrast, foreign B2B customers are given, on average, 29 days to fulfil their payment obligations – one day shorter than in 2017. The average payment terms recorded in India are in line with the averages recorded in Asia Pacific overall. The headline statistic however: Payment delays caused 22.9% of Indian respondents to lose revenue.

*Atradius

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