Johannesburg: A major risk insurance group has advised South African businesses dealing with India to ensure that they had adequate comprehensive insurance cover.

Credit Guarantee Executive Director Mike Truter said that the company had been forced to issue the advice to local business following difficulty in securing payment from a number of Indian businesses.

"We have been dealing with the Indian subcontinent for some years now and have encountered a number of instances where Indian companies are slow or reluctant to pay up on deals struck with South African businesses," said Truter.

"We have, in the process, experienced debt problems with sizeable businesses in India," he added.

Truter emphasised that he is not generalising the issue but said that while there were tremendous opportunities for business with India, South African businesses needed to be "cautious" when dealing with that country and would be well-advised to secure risk insurance.

"Debt recovery in India is a slow, cumbersome process because of the legal system there," said Truter. "In one case, involving the largest steel mill in India, we are still trying to recover a debt of about 40 million Rands two years after the company had signed an acknowledgement of debt. That company is still operating in India today, while we are waiting for settlement of the debt," he added.

Credit Guarantee's largest payout has been in connection with an Indian transaction, Truter said.

India Abroad News Service

Home    News