Survey shows declining obligation among heirs to take over family businesses in India

A recent survey of around 200 wealthy Indian business owners, each with at least $2 million in investable assets, reveals a shifting mindset among the next generation regarding family-run businesses. Despite nearly 80% of Indian business owners still intending to pass their businesses on to family members, only a small fraction, 7%, of their successors feel a strong duty to continue running them.

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This trend highlights a growing willingness among younger family members to explore personal ambitions beyond the family enterprise. In fact, a majority, 83% said they felt encouraged to follow their own interests when taking the reins of the business.

This evolving outlook comes shortly after prominent banker Uday Kotak expressed concern about the younger generation’s apparent lack of entrepreneurial drive and enthusiasm to lead family businesses. Nonetheless, the HSBC survey also found that 88% of current Indian entrepreneurs have confidence in their heirs' ability to manage family wealth effectively.

Interestingly, nearly half of the respondents (45%) don't expect their children to carry forward the business. Yet, family-owned enterprises remain crucial to India's economy, contributing close to 79% of the national GDP, one of the highest proportions worldwide.