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Representative office in Mumbai

Our gateway to the Indian subcontinent

The representative office in Mumbai (Bombay), the country's economic centre, supports the activities of KfW IPEX-Bank in India.


Important target market

The region is an important target market for KfW IPEX-Bank. It assists enterprises of the German and European export industry with sales financings and finances German direct investments in this region. In addition, KfW IPEX-Bank supports local companies outside the region in financing investments with German or European relevance and pursuing trade with German and European customers.

KfW IPEX-Bank is active in all its business sectors in the region.

Luis-Miguel Gutiérrez, Director of the representative office in Mumbai, talks about opportunities for German and European exporters in India.

Luis-Miguel Gutiérrez
Luis-Miguel Gutiérrez, Office Director in Mumbai

Mr. Gutiérrez, do you see financing covered by an ECA as an appealing option for initiatives such as “Make in India” as there will be higher localization?

In the short run, yes of course! Setting up or expanding manufacturing capacities requires fresh capex investments and this is precisely where ECAs come into play. Borrowers usually use ECA loans to maximize the financing tenors and significantly reduce financing costs. In the past the incorporation of subsidized interest schemes under ECA frameworks has been of additional benefit to borrowers in India. However, with the historical low interbank reference rates, the demand in India for these specific schemes has been slowing down. Now borrowers usually prefer floating rate ECA loans. In the long run, there might be some reduction of the number of transactions eligible for ECA cover, but I am not overly concerned. You will always find transactions where ECAs can add value.

Would this somehow not lead to a shift in your portfolio and doing more non ECA business?

Though ECA financing is one of our core competencies, in India we also support borrowers with external commercial borrowing (ECB) and trade loans on a selective basis. I do see continuity in that respect. Our portfolio in India today consists to almost 60% of long term financings in the petrochemical and metals sector. The rest is widely spread across infrastructure and industries such as ports, power generation, the manufacturing industry or the maritime as well as the aviation sector. In the last years we have also expanded our business into short term trade facilities. Going ahead we will stay committed to our existing customers and sector coverage. In parallel I see our headquarters in Frankfurt endeavoring further into commodities, airports, maritime offshore assets and urban mobility projects such as light rail projects, metros and buses.

What role does the Representative Office in Mumbai play?

It is important to know that our largest exposure within the BRICS countries lies in India and we only have more outstanding commitments in the EU and USA. I think the positioning of India from that angle is impressive! This representative office plays a vital support role for the headquarters by facilitating dialogue with partners on the ground and helping us to observe the market developments closely. Beyond that everything is catered out of our headquarters.

Being a bank how do you feel about the current NPA levels and stresses in certain sectors?

In my view the banking sector is right now at a point of inflection. I personally see addressing the question about adequate allocation of risk from the very beginning and recovery of stressed funds as a real game changer. Reserve Bank of India as well as the Government of India are working hard to strengthen the banking sector on one side and to deepen the debt and capital markets on the other. The list of measures is already impressive. Yes, there are still pitfalls putting these into practice. But it is important to acknowledge that we are seeing a gradual shift towards a more adequate risk sharing between sponsors, lenders and, where applicable, public authorities. I am confident that continuity on that path will attract more international equity and debt contributing to a sustainable growth in India. I believe we are on the right way.

KfW IPEX-Bank's representative office in Mumbai does not conduct any bank business of its own. Instead, its sole function is to support the bank's headquarters in Frankfurt.