India: bad debt levels remain high

Payment Practices Barometer

  • India
  • Chemicals/Pharma,
  • Consumer Durables,
  • Electronics/ICT

28th June 2022

Companies polled in India told us of the difficulty they found in collecting long unpaid trade debt.


The 2022 edition of the Atradius Payment Practices Barometer survey findings for India is a valuable opportunity to hear directly from companies about how their business operations are coping with the disruptive impact of the current challenging economic and trading circumstances.

Topics covered include: payment terms set for business-to-business (B2B) customers, the average time it takes to turn overdue B2B invoices into cash, the impact of late or non-payment on the business, and expected challenges to profitability during the coming months.

The survey questionnaire was completed by businesses in India during Q2 2022. Responses given by companies polled are contained in the report for India, which is part of the June 2022 edition of Atradius Payment Practices Barometer for Asia available on this website by clicking here.

Key takeaways from the report for India

Alarming levels of B2B bad debts and customer payment default

  • The level of bad debts written off as uncollectable and customer payment default remains high across all industries polled in the Indian market -- and these are both viewed as a major concern. In each case, the figures were particularly alarming in the consumer durables sector, which is suffering most from disruption to global supply chains. Our survey found a main factor for the problem is that many customers have liquidity problems.
  • Companies in India adopted widespread measures to combat the issue of overdue B2B trade debt. Some insisted on cash payments for delivery of goods and services, while others preferred more rigorous credit checks on customers. Offering discounts for early payments was another method, while in the electronics/ICT sector they tried a more flexible approach to payment terms. Overall, the average total value of B2B sales on credit dropped slightly, but still represented half of B2B turnover.

Credit risk strategy crucial as DSO worsens

  • Days-Sales-Outstanding (DSO) deteriorated for a staggering 60% more businesses polled in the Indian market than in our last survey. Companies also told us of the difficulty they found in collecting long unpaid trade debt. The clear consequence was that businesses were keenly aware of the vital need to strengthen their credit risk management. An increasing number of companies reported taking up credit insurance cover and the benefits of stability and access to finance which come with it.
  • Optimism for the future was shown in our survey by Indian companies saying they anticipate an increase in trading on credit with B2B customers during the coming months and also expect payment practices to improve. Despite this, however, businesses polled also anticipate a period of perhaps severe DSO volatility. That is one of several concerns looking ahead. Another is a potential fall in demand for products and services, while there is also worry about continued disruption to domestic and global trading conditions due to the pandemic.

Key survey findings for India

  • Nearly half of B2B turnover sold on credit, focus on customer retention
  • Payment terms in B2B trade hold steady, awareness of credit insurance grows
  • Bad debts and customer payment default levels remain high
  • Liquidity problems chief reason for customer payment defaults
  • DSO worsens, avoidance of cash flow bottlenecks paramount
  • Increase in B2B trading on credit expected, chiefly to grow sales
  • Concern about DSO volatility and falling demand for products and services

Interested in finding out more?

Please download the complete report for a complete overview of the payment practices in India and in the following local industries:

  • Chemicals/Pharma
  • Consumer durables
  • Electronics/ICT


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