German businesses are placing India firmly at the center of their growth strategies, with nearly eight in ten planning investments in the country by 2030, according to the latest “German Indian Business Outlook 2025” survey by KPMG AG Wirtschaftsprüfungsgesellschaft and the Indo-German Chamber of Commerce (AHK India). The findings reflect rising confidence in India’s market potential and a clear shift toward deeper economic engagement over the next five years.
India Moves Up as a Priority Market
India has emerged as one of the top priority markets for German companies. The country now ranks among the five most important destinations for 68 percent of surveyed firms, an increase of 14 percentage points compared to last year. For 6 percent, India has become their single most critical market globally. Andreas Glunz, Managing Partner for International Business at KPMG Germany, noted that many German companies see enormous potential in India despite operational hurdles and are increasingly prioritizing it in their global plans.
Optimism on Revenues and Profits
German companies operating in India remain optimistic about their business outlook. In 2025:
- 68% expect higher revenues
- 59% foresee profit growth
Looking further ahead, confidence grows even stronger. By 2030:
- 93% anticipate revenue growth
- 79% expect increased profitability
Moreover, more than a third of companies plan significant investments exceeding five million euros by 2030, marking a sharp rise of 20 percentage points compared to projections for 2025.
Production and Sales Footprint Expanding
India’s role as a manufacturing base is also expanding. Currently, 31 percent of German businesses use India as a production location for local needs. By 2030, this figure is forecast to increase to 56 percent. Simultaneously, India’s domestic market is gaining traction. About 37 percent of companies now consider India a key sales market, up ten percentage points from last year, with expectations that this will rise to 53 percent by the end of the decade.
Services and Digitalization on the Rise
German firms are also deepening their involvement in India’s services sector. At present, 22 percent operate shared services or global capability centers in the country. This share is expected to grow to 42 percent by 2030, especially in finance, human resources, and IT services.
Digital transformation is another strong focus area:
- 74% of firms plan investments in digitalizing internal processes by 2025
- 43% are investing in artificial intelligence, a figure projected to rise to 60% by 2030
- Robotic process automation and Industry 4.0 technologies each attract significant interest from about 36% of respondents
“German companies are developing integrated India strategies that span manufacturing, sales, procurement, and R&D,” said Stefan Halusa, Managing Director of AHK India. “India is increasingly becoming a core part of their global operations, and its significance goes far beyond revenue figures alone.”
Challenges Remain Despite Optimism
Yet despite the optimism, significant challenges remain. Sixty-five percent of respondents cite complex bureaucracy as a major obstacle, while 33 percent report issues with corruption, particularly when it comes to securing permits and navigating customs procedures.
A new regulatory hurdle has emerged in the form of Quality Control Orders (QCOs), which require certification by the Bureau of Indian Standards. About 32 percent of firms view the administrative burden associated with these rules as significant, especially for small and medium-sized enterprises. Halusa explained that QCOs have added layers of complexity, with short notice periods and country-of-origin rules posing particular challenges for smaller businesses.
Environmental Concerns Loom Large
Environmental concerns are also weighing on German investors’ minds. More than half of German businesses (55 percent) see air pollution in Indian cities as a critical business risk, alongside growing worries about the impacts of climate change, such as extreme heat and drought. Halusa said air quality issues have reached levels where they are increasingly seen as a threat to business operations, stressing the need for urgent policy action.
Survey Snapshot
The “German Indian Business Outlook 2025” surveyed 97 German companies active in India between 15 April and 27 May 2025. Participants included subsidiaries of German multinationals and businesses with commercial ties between Germany and India. As India’s economy continues to grow, German firms appear poised to deepen their engagement, balancing robust opportunities with ongoing regulatory and operational challenges.
