Risk Analysis And Countermeasure Research Of Bank Guarantees In India Thermal Power Market

In the process of economic globalization,the Demand Guarantees issued by bank as a form of bank credit guarantee is deeplyfavored by the clients and banks because of its characteristics of independence,documentary,efficient and reliable,and it is widely used in international trade in various fields.Since China has presented the political and economic strategy "the Belt and Road",India has become an important market for Chinese electricity exports because of its irreplaceable importance in strategy and its great potential in the thermal power market.However,almost all Chinese electric power companies have been stuck in "dilemma"during the implementation of "going global" strategy in Indian market,many Demand Bank Guarantees issued by Chinese companies have been claimed by the Indian owners,or used as bargaining chips by the Indian owners to require the Chinese contractors make compromises and concessions on contractual disputes during the completion negotiation of the project.The risk of Demand Bank Guarantees has become a weakness for Chinese power companies to execute projects in India;it makes the Chinese companies in a passive position in the negotiations and brings economic losses to the Chinese companies.Therefore,while developing the India market,to analyze the risk and study the countermeasures of Demand Bank Guarantees based on the characteristics of the Indian thermal power market and the characteristics of Demand Bank Guarantees in India is a matter of great urgency.First,this paper introduces the Demand Bank Guarantees' definition,background,characteristics and issuances methods,and points out that the domestic thermal power market is shrinking and the industry is facing the problem of overcapacity,and India will become an important market for Chinese electricity exports due to its steadily growing demand for electricity.Then,the paper has identified and analyzed the risk of Demand Bank Guarantees in the application of the thermal power market in India,and summarized the prevention measures of Demand Bank Guarantees risk in five aspects.Then,according to the cases of two Indian thermal power projects of D company,the paper introduces two kinds of risk countermeasures--international arbitration and reconciliation which can be used when the Guarantee is faced with disputes,and the evaluation and practical application of the two methods are analyzed respectively.The author holds that,when meet with Demand Bank Guarantees disputes in India,to apply international arbitration will cost a lot of time and resources,and the results are full of uncertainty,so the Chinese contractors should consider the interests of claims,the time and costs of disputes resolution will cost and other factors to choose the appropriate dispute resolution.Finally,the paper proposes two new methods for the risk countermeasures of Demand Bank Guarantees,which proposes that the Chinese contractor could explore the meanings of the claim period and seek for the jurisdiction of the Chinese court,to explore new ways to solute the risk of Demand Bank Guarantees.