New Delhi, May 20 (IANS) Despite most Indian business owners expressing strong trust in their children’s ability to manage family wealth, only 7 per cent of Indian heirs feel obligated to take over the family business, a new report said on Tuesday.

According to HSBC Global Private Banking’s new report, 88 per cent of Indian entrepreneurs have confidence in the next generation’s ability to handle family wealth.

However, 45 per cent of them do not expect their children to take over the family business — showing a growing openness to alternative career paths.

Sandeep Batra, Head of International Wealth and Premier Banking at HSBC India, said that family businesses in India are managing to balance tradition with change.

“There is trust in the next generation to uphold the values of the family business, but at the same time, open communication and structured succession planning are crucial,” he noted.

Family-owned businesses play a major role in India’s economy, contributing around 79 per cent to the country’s GDP — one of the highest percentages in the world.

The study found that most heirs, especially in multi-generational families, feel encouraged to pursue their own interests.

In fact, 83 per cent of respondents said they felt empowered to explore new opportunities when they first took over the business.

Still, the desire to keep businesses within the family remains strong. About 79 per cent of Indian entrepreneurs said they plan to pass on their business to family members.

This is in line with global numbers, such as 77 per cent in the UK and 76 per cent in Switzerland.

Indian second- and third-generation entrepreneurs also feel highly trusted by their elders, with 95 per cent saying they felt their predecessors had faith in them — much higher than the global average of 81 per cent.

India is also heading towards a massive intergenerational wealth transfer. According to Hurun data, 2024 saw India having 334 billionaires in US dollar terms, and nearly 70 per cent of them are expected to pass on wealth worth $1.5 trillion — over a third of India’s GDP.

The report also noted that many of India’s long-standing family businesses were founded after the country’s economic liberalisation in the 1990s.

The new generation, often educated abroad and raised in urban environments, brings fresh perspectives and is more willing to take independent paths, the report said.

–IANS

pk/na