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India's $1.5 Trillion Wealth Transfer Highlights Succession Challenges in Family Businesses

While 88% of Indian entrepreneurs trust heirs to manage wealth, only 7% of the next generation feel obligated to take over family enterprises, underscoring the need for robust succession planning.

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Overview

  • Family-owned businesses contribute nearly 79% of India's GDP, one of the highest proportions globally, yet face significant succession challenges.
  • A recent HSBC report reveals a stark gap between trust and obligation, with 88% of entrepreneurs trusting heirs but only 7% of heirs feeling compelled to lead.
  • Despite shifting aspirations, 79% of Indian entrepreneurs still plan to pass their businesses to family members, reflecting strong cultural norms.
  • India is on the brink of a $1.5 trillion intergenerational wealth transfer, equivalent to over one-third of the nation's GDP, intensifying the urgency for formal succession strategies.
  • Second- and third-generation entrepreneurs, often educated abroad, feel empowered to explore careers outside family enterprises, signaling a cultural shift in legacy expectations.