India sees a worsening of non-performing loans

According to the latest Payment Practices Barometer released by Crédito y Caución, 50% of Indian companies are experiencing a deterioration in the payment practices of their B2B customers, which is causing cash flow disruptions and financial difficulties across all sectors in the country. 

These developments are reflected in the levels of late payments, which affect 52% of B2B sales. In addition, 5% of all invoices end in non-payment. 

The Indian agri-food sector is particularly affected by late payments due to its vulnerability, unpredictable market conditions and fluctuating commodity prices. 

Currently, the average collection delay for B2B transactions in India stands at 34 days. Customer cash flow problems and administrative inefficiencies are the main reasons for late payment. 

To reduce the risk of a possible cash crunch, most Indian companies are slowing down payments to their own suppliers, even at the risk of a domino effect. 

74% are resorting to bank credit to cover temporary liquidity shortfalls and 43% to internal funds. 51% focus on improving their average payment terms to avoid financial losses. Despite widespread concerns about late payment, Indian companies continue to consider trade credit as an important strategy. 

Around 50% of B2B sales are made on credit. Many of them have relaxed payment terms to their customers to strengthen the business relationship.  

The barometer reveals widespread concern about the growth of insolvencies in 2025. This is predicted by 71% of Indian entities, due to an uncertain economic outlook, cash flow problems, regulatory changes and supply chain disruptions. 

Despite this, 89% expect demand for their products and services to increase, 76% are confident of achieving higher profitability and 71% expect that their customers' payment practices will not deteriorate. 

The main concern for Indian companies going forward is the unpredictability of the business climate, particularly in the textile and clothing sector. There is also widespread concern about financial constraints. The environment and sustainability pose other major challenges. Other concerns identified by companies include customer acquisition problems, especially in the agri-food sector, and cyber-security risks threatening data integrity and confidentiality. 

Human resource constraints are another cause for concern, as many organisations face a lack of skilled labour.