Assessment of the business situation in India by medium-sized companies
The interest of European companies in investing in India will continue to increase in 2022. The overall positive developments continue to make India attractive as an investment destination for German-speaking medium-sized businesses.
In our annual survey, in which we ask our customers from German-speaking medium-sized businesses with business activities in India about their assessment of the business climate, the entrepreneurs were overwhelmingly satisfied: 47% stated that they had a good financial year, 39% confirm a satisfactory situation and only 14% are dissatisfied with their results. This means that the original expectations for 2022 were not met: 73% of those surveyed in the survey at the end of 2021 looked confidently into the future and expected a good 2022 financial year. However, the reasons for this difference are “obvious” and are not India-specific:
Rising raw material, material and energy costs, supply chain delays and long logistics times, both in import and export, are part of a global development that does not stop at India. Over the past year, more and more pandemic restrictions have been lifted and travel activities have also been revived. But the war in Ukraine in particular had a massive impact on business activities and thus also on last year's results.
Outlook for the 2023 financial year
This year, the outlook for the current year 2023 is therefore somewhat more modest: 61% of those surveyed expect a good year, 29% a satisfactory one and 10% expect a bad year. If we look at the obstacles that had a negative impact on the 2022 business results, four topics particularly stand out: supply chain & sourcing, competition in the Indian market, the latest Covid-19 restrictions and the shortage of skilled workers, which is significantly higher compared to last year has increased.
Basically, it can be said that purchasing and investment power was restrained in 2022 and, in comparison, an increase in sales can be expected in the following years. Our survey at the end of this year will show whether we can reach pre-coronavirus levels next year.
We are happy to provide you with the WB Business Climate Index India 2022. Write us a short inquiry by email here.
