According to the latest International Business Report (IBR), Grant Thornton's global survey of mid-market companies, optimism among Indian business leaders increased throughout 2023, contrasting with declining confidence globally, making it a promising investment destination.

The H2 2023 IBR survey indicates that 80% of Indian businesses are optimistic about the economy in the next 12 months (compared to 78% in H1 2023). While India flourishes, confidence in the Asia-Pacific (APAC) region declined from 67% in H1 2023 to 66% in H2. Our 2024 Annual dealtracker also highlights increased interest from foreign investors, featuring 84 inbound deals totalling USD 7.7 billion.

Vishesh C Chandiok“ India remains the clear large economy outlier despite the global downturn in business optimism amongst international mid-market businesses (67% in H1 2023 to 65% in H2 2023), per Grant Thornton's International Business Report (IBR). IBR H2 2023 indicates that 80% of Indian mid-market businesses expressed optimism regarding the country's economic opportunities, up from 78% in H1 2023. These trends align with projections of India being the major contributor of this decade's absolute global growth. ”

Vishesh C Chandiok, Chief Executive Officer, Grant Thornton Bharat

India is currently the fastest-growing G20 economy and the fifth-largest economy globally. It is likely to become the third-largest economy soon, and aspires to be a developed economy by 2047 on the back of economic prosperity, environment sustainability, social advancement, and effective governance.

Buoyed by the heightened optimism in India, sectors such as automotive, infrastructure and consumer goods have grown significantly compared to the last year and have a promising outlook. The construction sector is projected to reach USD 1.42 trillion by 2027, expanding at a CAGR of 17.26% during 2022-27. The fast-moving consumer goods (FMCG) sector is expected to grow at a CAGR of 27.9% during 2021-27 to reach nearly USD 615.87 billion. India’s automotive sector, which is the third-largest globally, is projected to double in size to INR 15 lakh crore by the end of 2024.

Upbeat forecasts for profit and revenue

About 83% of Indian mid-market companies foresee an increase in profitability over the next 12 months, a significant jump from 76% in late 2022. This high level of confidence was last seen in Q4 2016, when 88% of companies expected profit growth, reflecting a strong belief in Indian businesses' resilience and adaptability despite global challenges.

India’s optimism, profit and revenue surpass APAC and global figures

Source: Grant Thornton IBR

Grant Thornton Global delivery partner Siddhartha Nigam picture “The bullish outlook extends beyond just profit expectations. 83% of Indian mid-market companies expect growth in revenue in the coming year, as India's expansive domestic market offers lucrative opportunities for expansion. Government initiatives such as 'Make in India', improvements in the ease of doing business, and the ongoing digital transformation have created a favourable environment for corporates. This revenue growth is likely to create more jobs, particularly in mid-market companies, as 78% of them anticipate a surge in employment this year, surpassing the global average of 51%.”

Siddhartha Nigam, Partner and National Global Delivery Leader, Grant Thornton Bharat

Way forward

Mid-market companies anticipate a surge in employment, with 78% in India projecting an increase this year, surpassing the global average of 51%. In the Emerging APAC region, only 49% expect an increase, while in Developed APAC and the European Union (EU), the figures are 41% and 39%, respectively.

Business constraints to the growth of Indian businesses

In the near future, 80% of Indian businesses intend to boost their tech investments, marking a notable increase from 73% in the first half of 2023. This is likely because, within the next six months, 61% of mid-market businesses perceive technology disruption as a significant risk.

Indian businesses are adapting to the changing business environment and reevaluating their strategic business priorities. The survey highlights that 45% of companies are prioritising the review of consent mechanisms and updating privacy policies to enhance data security and comply with the Digital Personal Data Protection Act 2023.

There is also a notable shift towards integrating advanced technologies, particularly AI, with a staggering 72% of business leaders foreseeing a surge in technology investments to leverage AI's potential. However, amidst this technological evolution, 44% acknowledge the potential increase in the cost of upskilling people due to AI, suggesting the need for strategic planning during this transition. Furthermore, 58% believe AI will drive innovation in products and services to create differentiation in the market and exceed customer expectations.

Raja Lahiri, Partner and Tech Industry Leader, Grant Thornton Bharat“Dynamic advancements and innovations can quickly disrupt traditional business models, leading to revenue decline and loss of market shares. To counteract these challenges, companies must maintain agility, consistently invest in technology especially Generative AI and cloud, and embrace digital and business transformation, with the highest standards of governance and trust.

Raja Lahiri, Partner and Tech Industry Leader, Grant Thornton Bharat

By taking a proactive approach to address emerging risks and capitalise on opportunities, Indian companies are in a favourable position to drive sustainable growth, create job opportunities, and contribute to the country's overall prosperity. Through innovation, adopting digital transformation, and cultivating a favourable business environment, India can continue to lead the way in the global economic landscape.

Key takeaways

International Business Report (IBR)

The International Business Report (IBR) is the world’s leading survey of mid-market companies. Launched in 1992, the IBR now provides insight into the views and expectations of around 10,000 businesses across 28 economies.

The research takes place twice a year and involves interviews with chief executive officers, managing directors, chairpersons or other senior executives from all industry sectors. Questionnaires are translated into local languages and fieldwork is undertaken through both online and telephone interviews.

The IBR data is referenced extensively in thought leadership by the Grant Thornton network and is the basis for our Global business pulse, the first index to track the health of mid-sized companies at a global, regional, country and sector level. Find out more about the index methodology here or explore the unique content that we create with the help of our many experts.

Click here to view Global IBR insights