In view of ongoing global uncertainties and an increasingly fragmented global economy, India is increasingly becoming the centre of German companies' location strategies. The German-Indian Business Outlook 2025, which KPMG has once again compiled together with the Indo-German Chamber of Commerce, shows this: A large majority of respondents plan to invest in India by 2030, coupled with high expectations in terms of sales, profits and local operational presence.
Andreas Glunz
Managing Partner International Business
KPMG AG Wirtschaftsprüfungsgesellschaft
Five remarkable figures in a compact overview
- 79 per cent of companies plan to invest in India by 2030 - a new high
- 56 per cent want to use India as a production location for the Asia region (+25 percentage points compared to last year's survey)
- 68 per cent expect rising sales in 2025 (+14 percentage points), 59 per cent higher profits
- 50 per cent expect positive effects for their business activities in India due to the continued decoupling of the USA from China
- 55 per cent see high levels of air pollution in Indian cities as business-critical
German-Indian Business Outlook 2025: The most important results
Investments at record levels
The country is now one of the five most important markets for 68 per cent of German companies - an increase of 14 percentage points compared to the previous year. For 6 per cent, it is even the top priority market.
At the same time, a significantly increasing number of German companies (47 per cent compared to 25 per cent in the previous year's survey) expect Indian companies to outperform their own company in the next five years.
For all these reasons, more than every second company intends to expand its involvement - with investments at record levels.
Production in India for Asia
Currently, just under one in three German companies (31 per cent) use India as a production location for the local market. According to their estimates, this proportion is set to rise by 25 percentage points to 56 per cent by 2030.
At the same time, the Indian sales market is becoming increasingly relevant. Compared to the previous year's study, the proportion of companies that use India as a sales market has increased by 10 percentage points to 37 per cent; over the next five years, this figure will rise by a further 16 percentage points to 53 per cent.
Shared services are gaining in importance
German companies also want to use India more as a "shared service" or "global capability centre": 22 per cent of respondents currently operate such a centre here. By 2030, 42 per cent plan to expand corresponding structures - especially in the finance, HR and IT sectors.
Location advantages - and operational challenges
Political stability remains the most important locational advantage of India for 61 per cent of German companies, ahead of the availability of qualified specialists and the comparatively low labour costs (53 per cent each).
Known challenges also remain: 65 per cent (previous year: 64 per cent) of companies complain about the complex and lengthy bureaucratic processes. 33 per cent (previous year: 39 per cent) see corruption as an obstacle to their operational business - particularly when it comes to permits and customs issues.
Business climate survey: the methodology
The results of the German-Indian Business Outlook 2025 are based on a survey conducted by KPMG AG Wirtschaftsprüfungsgesellschaft and the Indo-German Chamber of Commerce (AHK India). Between 15 April and 27 May 2025, a total of 97 companies were surveyed - including Indian subsidiaries of German corporations and companies with Indian operations from Germany.
