In an evolving global business landscape, German companies are doubling down on digital transformation and diversifying their investment strategies to navigate geopolitical uncertainties. Two recent studies by KPMG, in collaboration with key industry partners, highlight these trends, showcasing how German firms are prioritizing innovation and expanding their presence in India as a critical growth market.
These developments signal a strategic pivot toward resilience and long-term competitiveness in an increasingly fragmented global economy.
The KPMG study on digital transformation reveals that German companies are intensifying their focus on technology to drive growth and efficiency.
Amid pressures from geopolitical tensions, supply chain disruptions, and rising energy costs, digitalization has emerged as a cornerstone of corporate strategy.
The study underscores that 74% of surveyed firms plan to invest in digitizing internal processes in 2025, with a particular emphasis on artificial intelligence (AI), cloud computing, and cybersecurity.
These investments aim to enhance operational agility and meet evolving customer expectations, which increasingly demand seamless, personalized experiences.
The adoption of AI is particularly noteworthy, as German companies recognize its potential to transform business models.
From predictive maintenance in manufacturing to data-driven decision-making in retail, AI is being integrated across sectors.
However, the study also highlights challenges, including a shortage of skilled professionals and concerns over regulatory compliance.
To address these, firms are forging strategic partnerships with tech providers and investing in employee training programs.
For instance, KPMG’s expanded alliance with Microsoft in AI and cloud services is enabling German businesses to accelerate their digital journeys while navigating complex regulatory landscapes like the European Markets in Crypto Assets Regulation.
Parallel to this digital push, German companies are increasingly turning to India as a strategic investment destination.
According to the KPMG “German Indian Business Outlook,” conducted with the Indo-German Chamber of Commerce, a record 79% of German firms plan to invest in India by 2030, up from 53% in 2025.
This surge is driven by India’s growing economic significance and its relative insulation from global trade disruptions, particularly the U.S.-China systemic rivalry.
For 68% of respondents, India ranks among the top five markets globally, with 6% identifying it as their top priority.
The appeal of India lies in its large, dynamic market, political stability, and skilled workforce.
German companies are particularly drawn to India’s digital ecosystem, with 74% planning to leverage the country for digitalization initiatives in 2025.
Additionally, 56% aim to use India as a production hub for the Asian market by 2030, a 25% increase from 2025.
This shift reflects a broader trend of regionalization, as firms seek to diversify supply chains and reduce reliance on single markets like China.
Investments exceeding €5 million are expected to see the strongest growth, with 35% of companies planning such commitments by 2030.
However, challenges remain. Bureaucratic hurdles, cited by 64% of respondents, and a complex tax system pose operational difficulties.
Despite these, optimism prevails, with 93% of firms expecting revenue growth and 79% anticipating higher profits by 2030.
Andreas Glunz, Managing Partner International Business at KPMG Germany, notes that India’s growth potential outweighs its challenges, making it a cornerstone of German companies’ de-risking strategies.
These dual trends—digital transformation and investment in India—illustrate German companies’ proactive approach to global uncertainties.
By embracing technologies and diversifying geographically, they are positioning themselves for sustainable growth.
As the global economy continues to fragment, Germany’s strategic focus on innovation and emerging markets like India will likely serve as a blueprint for other industrialized nations seeking to balance risk and opportunity in a volatile environment.