Global financial uncertainty, domestic fiscal challenges, and issues with talent and technology are the primary concerns for Indian businesses. The top five challenges for “Indian Inc” highlighted at the CII National Council Meeting are: global uncertainties, growth and fiscal concerns, talent retention, technology shifts, and low R&D investment.
Thank you for reading this post, don't forget to subscribe!Global Uncertainties and Market Volatility
The Indian business environment is being tested by global uncertainties and geopolitical tensions. For example, business leaders noted that “Trumpism” and broader economic uncertainty are causing volatility in investment markets, which complicates household investments and wealth distribution in India. This unpredictable global landscape adds a layer of risk for businesses and investors.
Growth and Fiscal Concerns
While optimistic about India’s real GDP growth (projected at 6.8% to 7%), leaders are concerned about nominal GDP growth. This is a key issue because nominal growth is directly tied to tax revenue collection and the fiscal deficit. If inflation remains low, a slower nominal growth rate could create financial challenges for the government.
Talent Retention and Management
A major cross-sector issue is the ability to retain skilled professionals. The discussion highlighted that while H-1B visa reforms could be an opportunity to attract Indian talent back home, the country must also create a supportive ecosystem with strong research institutions to keep this talent from leaving again.
Technology Shifts
The IT sector, in particular, is navigating major technological shifts. Leaders see policy changes like H-1B visa reforms as a catalyst for the industry to accelerate the adoption of new technologies, such as Artificial Intelligence (AI), and to shift to more platform-focused business models. This requires companies to adapt their talent and technology strategies.
Low R&D Investment
India’s low investment in Research and Development (R&D) is a significant long-term barrier to growth. Currently at just 0.56% of GDP, this low spending hampers the country’s ability to innovate and compete on a global scale in crucial sectors like technology, semiconductors, and healthcare. To seize global opportunities, businesses must increase their investment in innovation.
