Reply To: What are the key differences between domestic and international trade finance regulations?

[John Babu]

There are several key differences between Indian and international trade finance regulations, including:

1. Foreign exchange regulations: India has strict foreign exchange regulations in place, which can make it more difficult for businesses to engage in international trade.
2. Trade financing: India has a more developed domestic trade financing market, which can make it easier for businesses to secure financing for domestic trade, but more difficult for businesses to secure financing for international trade.
3. Risk management: International trade finance regulations tend to place a greater emphasis on risk management and compliance, which can make it more difficult for businesses to engage in international trade.
4. Legal framework: India has a more complex legal framework for trade finance, which can make it more difficult for businesses to navigate the regulations and requirements.
5. Collateral requirements: International trade finance regulations often require more extensive collateral to secure a loan, which can make it more difficult for small and medium-sized enterprises to secure financing.
6. KYC norms: Different countries have different KYC norms and India is no exception, Indian banks and financial institutions have more stringent KYC norms than international institutions.
7. Credit scoring: There is a difference in credit scoring and rating system in India and other countries, which can have an impact on trade finance availability.