95% of Indian Businesses Lose Money in Contract Negotiations

95% of Indian Businesses Lose Money in Contract Negotiations: Survey

18 Nov, 2024

Icertis, the global leader in AI-powered contract intelligence, has released its 2025 executive insights survey, titled Powering Profitability: The New Economics of Customer and Supplier Relationships. Based on responses from over 1,000 C-suite leaders, the survey reveals that 95 percent of Indian executives believe they are leaving money on the table during contract negotiations. Furthermore, businesses lose an average of 9 percent of the agreement’s overall value after contracts are signed, leading to substantial profitability erosion and millions in unrealized revenue across growing customer networks and complex supply chains.

India’s economy remains one of the fastest growing globally, and with the emergence of the ‘India stack’, businesses are poised for transformative growth. This development will unlock key economic fundamentals such as identity, data, and payments for over a billion people, accelerating business transformation with AI.

Contracts are foundational to business relationships and global commerce, playing a crucial role in driving revenue and managing risk. However, key findings from the survey highlight a significant gap between leadership perception and the realities of business contracting:

CFOs are unaware of value leakage: Although most CFOs are confident they are collecting all owed payments, their confidence is misplaced. The survey shows that missed opportunities, such as additional fees, late customer payments, and unused discounts with suppliers, are leading sources of revenue leakage.
Inflationary pricing protections are overlooked: Despite inflation being a top concern globally, over 40 percent of C-suite leaders do not leverage inflationary pricing protections in their contracts.
Overconfidence threatens regulatory compliance: Although 70 percent of C-suite leaders feel well-prepared for regulatory compliance, nearly half of businesses have been fined for violations in the last five years.

The survey also highlights advanced perspectives on AI's transformative potential in business, particularly in India’s C-suite. Compared to global counterparts, Indian leaders are optimistic about AI's impact on business profitability, with 57 percent expecting AI to influence their bottom line in the coming year. Notably, India ranks legal departments among the top areas for AI-driven cost reductions, alongside finance, IT, marketing, and HR.

Additionally, 77 percent of India’s executives believe Artificial General Intelligence (AGI) will significantly alter their business operations in 2025, compared to 60 percent in the U.S. and 34 percent in the U.K.

Monish Darda, CTO and Co-founder of Icertis, emphasized the importance of leveraging AI in contract management to curb value leakage and ensure compliance. As India’s economy continues to grow, optimizing customer and supplier contracts with AI will be critical for businesses to stay competitive globally.