The Interpreneur survey: Understanding mid-market business trends in India
India is set to be the fastest-growing G20 economy in 2024, setting a backdrop of rapid infrastructure development and high government capital spending for ambitious entrepreneurs.
To understand how this landscape is affecting mid-market businesses, we recently surveyed 1,400 C-suite business leaders in 14 countries, in private sector companies earning up to £300m a year that have expanded internationally. We call these CEOs ‘interpreneurs’.
We have analysed the India data against the global outlook to get a better understanding of what drives Indian interpreneurs.
Global business trends: Do Indian business leaders believe more businesses will expand overseas in the next 12 months?
| Significantly increase | 55% |
| Moderately increase | 41% |
| No change | 1% |
| Moderately decrease | 2% |
| Significantly decrease | 1% |
| Significantly increase | 55% |
India in the top 5 most optimistic countries surveyed regarding overseas business expansion
At a total of 96% of respondents expecting to see an increase in international business, India was one of only 7 countries surveyed that felt strongly about an increase, scoring over 90%.
Which markets do Indian businesses prefer to expand into?
| Which, if any, of the following regions or countries would you / your business considering expanding to? (Select all that apply) | |
|---|---|
| Western Europe (e.g. Germany, France, UK, etc) | 55% |
| North America (e.g. USA, Canada, Mexico, etc) | 55% |
| North Asia (e.g. China, Japan, Korea, etc) | 33% |
| Middle East | 29% |
| South Asia (e.g. Thailand, Vietnam, Singapore, etc) | 23% |
| Eastern Europe (e.g. Poland, Hungary, Romania, etc) | 19% |
| Australia/New Zealand | 19% |
| South America (e.g. Brazil, Chile, Colombia, etc) | 18% |
| Africa | 7% |
| Other | 3% |
North America and Western Europe share number one spot for Indian interpreneurs
Proximity, unlike some responding countries, was not an influencing factor for Indian respondents. Although the ranking was in the middle of the pack, India scored the Middle East the highest out of all the responding countries. India was one of the least likely countries of all surveyed to consider investing in Africa.
What makes a country more attractive to Indian businesses looking to expand globally?
| Which, if any, of the following would make a country most attractive for international expansion? [Select up to five] | |
|---|---|
| Future economic growth prospects | 55% |
| Skills and talent (e.g. availability of local talent and openness to skilled talent immigration) | 46% |
| Favorable trade agreements (e.g. free trade zones, diplomatic partnerships, or preferential tariff treatment) | 43% |
| Tech infrastructure and digitalisation | 42% |
| Government support (e.g. grants, incubators, and mentorship programs) | 36% |
| Cultural and language similarity to existing operations | 36% |
| Transparent regulatory environment | 35% |
| Alignment with long-term growth strategy (e.g. regional investment into specific industries) | 34% |
| Favorable tax policies | 29% |
| Geographic proximity to existing operations | 26% |
Economic growth prospects primary attractor for Indian CEOs
Although a majority of respondents worldwide felt that future economic growth prospects made a country more attractive, India was the country most likely to be influenced by cultural and language similarities.
What motivates Indian interpreneurs to expand internationally?
| What were the primary motivators for your business expanding internationally? [Select up to three] | |
|---|---|
| Market growth opportunities: Accessing new customer segments | 58% |
| Competitive advantage: Gaining a foothold in new markets before rivals | 38% |
| Talent acquisition: Recruiting skilled employees from a broader pool | 38% |
| Resourcing: Manufacturing, supply chain or other resourcing opportunities | 34% |
| Access to digital technologies and innovation | 31% |
| Cost optimisation: Leveraging lower production/resource costs | 24% |
| Diversification: Reducing dependence on any single market | 16% |
| Government incentives in host country (including regulatory framework and tax incentives) | 12% |
| Existing personal network abroad | 11% |
58% of respondents said their business was primarily motivated to expand internationally by market growth opportunities: accessing new customer segments.
38% were motivated by the possibility of a talent acquisition (recruiting skilled employees from a broader pool).
38% said competitive advantage (gaining a foothold in new markets before rivals) motivated their business’s international expansion.
What are the biggest international expansion challenges in 2024 according to Indian Interpreneurs?
| Top 3 biggest challenges during international expansion process | |
|---|---|
| Managing economic volatility (e.g. currency fluctuations, inflation and or low growth) | 51% |
| Finding the right local partners (e.g. building reliable and trustworthy relationships) | 41% |
| Adapting logistics and supply chain issues (e.g. managing international shipping, distribution, and communication) | 40% |
Economic volatility biggest challenge to doing business internationally say Indian CEOs
Indian respondents were the most affected by economic volatility (51%), with Japan being the least affected (21%), but also were the country most likely to feel that localising back end and infrastructure was a challenge.
Other significant challenges were:
- Adapting logistics and supply chain issues (e.g. managing international shipping, distribution, and communication)- 40%
- Understanding complex compliance requirements (e.g. ESG and legal compliance)- 30%
Risk: What do Indian CEOs think are the biggest risks to global business expansion in 2024?
Economic slowdown biggest risk to Indian businesses
How much of a risk do the following pose to your business’s international expansion or planned international expansion?
| Escalating geopolitical tensions and instability | Disruptive risk | 5% |
| Significant risk | 24% | |
| Moderate risk | 28% | |
| Minimal risk | 26% | |
| No risk | 17% | |
| Not Sure / Not applicable | 0% | |
| Economic slowdown or recession | Disruptive risk | 11% |
| Significant risk | 26% | |
| Moderate risk | 26% | |
| Minimal risk | 22% | |
| No risk | 15% | |
| Not Sure / Not applicable | 0% | |
| Financial market and foreign exchange volatility | Disruptive risk | 12% |
| Significant risk | 22% | |
| Moderate risk | 21% | |
| Minimal risk | 21% | |
| No risk | 24% | |
| Not Sure / Not applicable | 0% | |
| Cybersecurity threats and data breaches | Disruptive risk | 17% |
| Significant risk | 22% | |
| Moderate risk | 17% | |
| Minimal risk | 25% | |
| No risk | 19% | |
| Not Sure / Not applicable | 0% | |
| Talent shortages and skilled labour gaps | Disruptive risk | 9% |
| Significant risk | 19% | |
| Moderate risk | 19% | |
| Minimal risk | 33% | |
| No risk | 20% | |
| Not Sure / Not applicable | 0% | |
| Technological disruption from AI and new technologies | Disruptive risk | 5% |
| Significant risk | 28% | |
| Moderate risk | 22% | |
| Minimal risk | 23% | |
| No risk | 22% | |
| Not Sure / Not applicable | 0% | |
| Environmental disruption and extreme weather | Disruptive risk | 5% |
| Significant risk | 22% | |
| Moderate risk | 24% | |
| Minimal risk | 27% | |
| No risk | 21% | |
| Not Sure / Not applicable | 1% |
India was the only country surveyed to be the most concerned with cybersecurity threats and data breaches pose a disruptive or significant risk to their business’s international expansion or planned expansion at 39%. Egypt scored slightly higher (41%), but overall were more concerned with economic volatility (42%).
37% of Indian respondents also felt that economic slowdown or recession poses a disruptive or significant risk to their business and an additional 34% felt this from financial market and foreign exchange volatility.
HNWIs vs Equity Schemes: Which is the preferred international expansion funding source for Indian businesses?
| Private investors (including HNWIs) | 63% |
| Employee equity schemes | 55% |
| Capital markets (i.e. IPO) | 50% |
| Venture capital or private equity | 42% |
| Management buyout | 40% |
| Government funding | 29% |
| Crowdfunding | 26% |
| Debt | 20% |
| Private investors (including HNWIs) | 63% |
Private investors financing Indian businesses international expansion.
India is one of only four countries, four that also share the most positive outlook for international expansion, that scored private investment the highest as a form of finance-raising. It is an interesting correlation between fast growing and developing economies.
Understanding global tax: Is the C-suite ready for a global tax threshold?
| How confident are you in your understanding of the global international tax rules (for example transfer pricing, VAT) that govern multinational businesses? | |
|---|---|
| Extremely confident: I have a deep understanding of global tax rules and their implications for multinational businesses | 44% |
| Confident: I have a good grasp of key principles and can navigate common scenarios, but may seek external guidance for complex situations | 55% |
| Not very confident: My understanding of global tax rules is limited, and I rely heavily on external advisors for guidance and analysis | 1% |
Confidence high on understanding global taxation for Indian businesses
India was one of the few countries that displayed very little fear of global tax rules and had no respondents for not confident at all.
The growing importance of ESG for Indian investors and interpreneurs
| We do / would prioritise ESG | 44% |
| We do / would value ESG, but it wouldn’t be our top priority | 20% |
| We do / would consider ESG practices but if only if they don’t interfere with our other priorities | 34% |
| We don’t / wouldn’t strongly consider ESG practices | 2% |
India considering ESG as a top priority
Most (98%) do/would consider ESG practices when considering counties or regions to expand into:
- 44% of respondents said that their business does or would prioritise ESG
- 20% do/would value it, but it wouldn’t be a priority
- 34% do/would if it didn’t interfere with their other priorities.
Only 2% of respondents said that they don’t / wouldn’t consider ESG practices.
The benefits of AI in international business operations
| To what extent do you agree or disagree with the following statement: ‘I feel prepared to harness the benefits of AI in global business operations within the next two years? | |
|---|---|
| Strongly agree | 59% |
| Somewhat agree | 37% |
| Neither agree nor disagree | 3% |
| Somewhat disagree | 1% |
Indian business leaders confident about the use of AI in global operations
Most respondents (96%) agree that they feel prepared to harness the benefits of AI in global business operations in the next 2 years.
- 59% strongly agree.
- 37% somewhat agree
- Just 1% of respondents disagreed with this statement
