Do You Know Indian Family Businesses Contribute ₹79 Out of Every ₹100 to GDP?

India’s economic landscape continues to be shaped by family-owned businesses, which account for an estimated 79% of the country’s GDP, according to HSBC Global Private Banking’s recent report, Family-owned businesses in Asia: Harmony through succession planning. 

The report explores how Indian family businesses are navigating succession, modernisation, and legacy, while highlighting their confidence in the next generation and the importance of structured planning.

Family Businesses Account for 79% of India's GDP

The report identifies India as one of the leading countries globally where family businesses dominate the economic framework. A significant 79% of India's GDP is contributed by such enterprises, which means Indian family businesses contribute ₹79 out of every ₹100 to GDP, highlighting their pivotal role in the national economy. Many of these businesses trace their origins to the liberalisation of the Indian economy in the 1990s.

Read More: India’s GDP Doubles in a Decade to $4.27 Trillion: IMF.

New Generation Brings Fresh Perspective

Second-generation entrepreneurs are increasingly playing a critical role in reshaping traditional businesses. These successors, often globally educated and raised in urban environments, are introducing new ideas, management styles, and digital-first strategies, blending legacy with innovation.

Optimism in the Next Generation’s Capabilities

According to the report, 88% of Indian business owners express strong confidence in their successors’ ability to manage both business operations and family wealth. This trust underscores a broader trend in Asia where intergenerational cooperation is being seen as a strength.

Succession Planning Still Has Gaps

Despite the optimism, the report reveals that 45% of entrepreneurs do not expect their children to take over the business. This includes 55% of first-generation owners and 35% of multi-generation entrepreneurs, indicating a shift in expectations and possibly in succession strategy.

Empowered Successors in Multi-Generational Firms

Among those who have taken over family businesses, 83% of respondents from multi-generational enterprises reported feeling empowered to pursue their own interests when they assumed control. This reflects an evolving approach where autonomy and tradition co-exist.

India Leads in Business Continuity Intent

A striking 79% of Indian entrepreneurs intend to pass their business to family members. This is higher than the corresponding figures in the UK (77%) and Switzerland (76%). The trend signals a strong preference for familial legacy and continuity in Indian business culture.

Regional Differences Across Asia

The intention to pass on businesses varies across Asia. In Hong Kong, only 44% share this intent, compared to 56% in mainland China and 61% in Taiwan. A notable proportion of entrepreneurs in these regions are considering selling their businesses, 25% in mainland China, 29% in Hong Kong, 27% in Taiwan and 22% in Singapore.

Conclusion

Sandeep Batra, Head of International Wealth and Premier Banking at HSBC India, notes that India’s family-owned businesses are striving to preserve their legacy while embracing modernity. He emphasises the importance of open communication and succession planning to ensure long-term sustainability and harmony within family-run enterprises.

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