Treasury Peer Panel : India

Report date: 
5 Jul 2021


[The full report can be downloaded by subscribers at the foot of this article]

This session was requested by a member whose company plans to expand its business in India from $100m a year currently to $1bn. This raises a series of questions about how to manage M&A, since part of the growth is expected to be inorganic, as well as how to fund the business, manage working capital, and structure the treasury team and operations.

This triggered a very healthy and open discussion in which members shared their experiences in India. Although it is a difficult environment, most of the experiences are positive, and things can be done. These range from managing local bond issues to restructuring legal entities. Most participants find that a local team is required at some point, and this can present issues, especially with local management feeling a need to play a role. Tax legislation is complex, and there is often a need to have at least some level of relationship with local banks.

The report is a good guide to the challenges faced when operating in India, and the ways in which these challenges can be successfully addressed.

Key Takeaways

M&A – with a focus on due diligence

  • Often acquisitions in India are part of global acquisition with the due diligence and funding handled at a global level
  • Regarding due diligence, one panel peer looks to the big accounting firms and global banks to help with the initial due diligence, but stressed the importance of digging further wherever there is a question of ethics
  • It was noted that the Indian authorities can turn a blind eye to questionable activities on the part of an Indian headquartered company, but that once it is part of a global company, the situation can escalate in a direction you don’t want to go – and it can be difficult to put an end to any questionable practices you inherit.


  • Most panel peers have established lines with local banks which are rarely used and primarily in place to meet recent regulatory requirement that cash management banks must also be credit banks
  • Most funding remains offshore
  • One peer had established a successful commercial paper programme in India with attractive rates.  There is a strong bond market there creating demand for the paper. 

Treasury Operations and Banking Relations

  • Treasury team is usually part of a larger finance team reporting to local managers
  • The focus of these teams is usually quite local in part due to local management
  • India is unique in that corporate treasury can have limited influence on the local team in terms of bank selection, cash management processes and a global treasury orientation
  • It is difficult for companies with sizable operations in India to operate without any treasury resources on the ground who understand the regulations and culture, can physically work with the local banks, establish, and manage the local banking relationships, ensure execution of tax payments, etc
  • Because of the autonomy of the local treasury and finance teams and the need to work closely with the local banks, local banking relationships are primarily managed locally with corporate treasury kept informed. 

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