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Grant Thornton's latest International Business Report (IBR) reveals that 88% of Indian mid-market firms believe that the ease of doing business in India has significantly improved. This positive shift is largely driven by government reforms aimed at simplifying compliance processes and reducing bureaucratic barriers. Key initiatives, such as the Goods and Services Tax (GST), Foreign Direct Investment (FDI) policy reforms and the National Single Window System (NSWS), have streamlined procedures and attracted more investment.
India’s rise in the World Bank’s Doing Business Report (DBR) reflects these improvements, with the country moving from 142nd place in 2014 to 63rd globally, marking a jump of 79 positions. These reforms have created a more favourable business environment, providing mid-market firms with better access to capital, fewer operational challenges and a more efficient regulatory framework.
Despite these advancements, businesses still seek additional government support in key areas:
With India steadily progressing towards its goal of becoming a USD 5 trillion economy in FY24-25, Indian mid-market firms view the country's business environment as highly conducive to their growth, a sentiment reflected in their increased optimism and profitability levels, with 82% being highly optimistic about the economy and 83% having a positive outlook regarding their profitability prospects for the next year.
However, two significant challenges could disrupt their progress in the long term. These are climate change and the rapid advancement of generative artificial intelligence (AI) technologies.
Climate change presents a significant threat to the long-term sustainability of mid-market firms. Many businesses are already acknowledging the risks, such as supply chain disruptions, resource shortages and rising operational costs. With increasing pressure from investors and regulators to adopt sustainable practices, 80% of mid-market companies report that they are prepared to implement strategies to mitigate climate change impacts.
Recognising the urgency of addressing climate change, mid-market firms are taking proactive steps to adapt to its impacts. The majority of businesses surveyed have either already implemented several climate change adaptation strategies or plan to implement them in the coming year. These strategies include the adoption of renewable energy, enhancing their carbon footprint reduction initiatives, integrating sustainability into their supply chain operations and implementing water conservation measures.
Generative AI is rapidly transforming industries, and businesses worldwide are bracing for its profound impact. Many companies expect it to drive significant changes in operations, from automating processes to enhancing customer interactions and boosting innovation. As a result, a large portion of businesses are already adopting AI solutions to streamline workflows and improve their decision-making capabilities.
However, mid-market businesses encounter numerous barriers when integrating generative AI into their operations. Key barriers include security and privacy concerns, high implementation costs, insufficient technical expertise, and regulatory and compliance issues, which thwart businesses from fully capitalising on the unique capabilities of this technology. Despite these challenges, 83% of surveyed firms indicate that they are well-prepared to incorporate generative AI into their operations in the next 12 months.
Globally, businesses are investing in employee training, strengthening cybersecurity measures and collaborating with AI solution providers to mitigate the risks associated with the widening adoption of generative AI. Businesses in India are also making similar investments to tap into its full potential.
As mid-market firms continue to capitalise on the improved ease of doing business, their success will hinge on how they manage emerging challenges such as climate change and generative AI disruption. Addressing these will require strategic foresight, and the actions taken today will define the future of their business in an innovation-driven world.
We provide end-to-end support, from AI-readiness assessments to identifying and prioritising optimal use cases, followed by gen AI proof of concepts (POCs) and design/build services. Our offerings also encompass AI ethics and governance services, covering all aspects of responsible AI, FinOps for AI workloads and sustainable AI.
Our team uses the 6C framework, which provides a broad direction for identifying generative AI use cases, categorised into six key areas, including conversational AI agents, creative use cases, content, classification use cases, concision and code. We firmly believe in the transformative potential of generative AI across industries and business functions and follow a customised six-step approach to guide businesses through each stage, from creating a compelling business case to deploying the generative AI model effectively.
The International Business Report (IBR) is the world’s leading survey of mid-market companies. Launched in 1992, the IBR now provides insights into the views and expectations of around 10,000 businesses across 28 economies. The research takes place twice a year and involves interviews with chief executive officers, managing directors, chairpersons, or other senior executives from all industry sectors. Questionnaires are translated into local languages, and fieldwork is undertaken through both online and telephone interviews. The IBR data is referenced extensively in thought leadership by the Grant Thornton network and serves as the basis for our Global Business Pulse, the first index to track the health of mid-sized companies at global, regional, country, and sector levels.