Family Businesses Drive Nearly 80% Of India's GDP, But Only 7% Heirs Obligated To Take Over: HSBC
Regionally, India shows the strongest intent to keep businesses in the family, with 79% of entrepreneurs planning to pass them on—much higher than 44% in Hong Kong or 56% in China.
Family-owned businesses continue to play a pivotal role in India’s economy, contributing to approximately 79% of the country’s gross domestic product—one of the highest ratios globally, according to HSBC Global's latest report.
However, only 7% of Indian respondents felt a sense of obligation to take on the family business, according to the ‘Family-owned businesses in Asia: Harmony through succession planning’ report.
The report explores the readiness of family-run enterprises in India and across Asia, to secure the future of their business and wealth. It offers critical insights into succession planning, intergenerational trust, and evolving attitudes among heirs.
While 88% of Indian entrepreneurs trust the next generation to manage family wealth, nearly half of those surveyed do not expect their children to take over the business. This includes 55% of first-generation and 35% of multi-generational entrepreneurs.
Interestingly, only a small fraction—7% of Indian respondents reported feeling obligated to assume control of the family business, indicating an increasing willingness among younger generations to explore opportunities beyond the family enterprise. This outlook is mirrored in the support they receive from older generations. In fact, 83% of Indian respondents felt empowered to pursue personal interests when they assumed leadership.
All In The Family
Despite these changing dynamics, a strong preference to keep businesses within the family remains. About 79% of Indian entrepreneurs still plan to hand over their businesses to family members, closely aligned with global trends—77% in the UK and 76% in Switzerland.
Moreover, trust within Indian families is notably high: 95% of second- and third-generation entrepreneurs in India said they felt trusted when taking over the business, significantly above the global average of 81%, as per the report.
India is on the threshold of a major intergenerational wealth transfer. According to Hurun, in 2024, India had 334 billionaires in US dollar terms, a 29% rise from the previous year. Nearly 70% of them are poised to pass on a combined $1.5 trillion in wealth—over one-third of India’s GDP—highlighting the urgent need for effective succession strategies.
"India’s family-owned businesses are balancing legacy preservation with modernity," said Sandeep Batra, head of International Wealth and Premier Banking, HSBC India.
India's Bet On 'Family'
Regionally, India shows the strongest intent to keep businesses in the family, with 79% of entrepreneurs planning to pass them on—much higher than 44% in Hong Kong or 56% in China.
The report notes that many family businesses in India were established during the 1990s economic liberalisation. Today’s second-generation leaders, often educated abroad and raised in cosmopolitan settings, bring new perspectives while maintaining cultural values. Extended family and kinship remain central to business operations in multi-generational firms.
"While there is trust in the next generation to uphold the values and culture of the family business, there is also a need for open communication and robust succession planning. This proactive approach not only strengthens family bonds but also safeguards the long-term sustainability of these businesses," Batra further added.
Entrepreneurs in countries like China, Hong Kong, and Taiwan show greater interest in selling their businesses. Despite lower succession preparedness across Asia, many families now recognise the need to formalise wealth structures, given the vital role family businesses play in regional economies.
