"For the first time in three years, Indian companies doing business in Europe have shed their pessimism and see a rebound in their business prospects in the region," the survey by industry body Ficci said.
It said despite the slowdown, Indian companies have been able to grow and create a niche for their products there.
"There has been a marked rise in number of companies who have successfully been able to reduce their losses while doing business in the region," the survey titled ‘Is the Worst Phase over for Indian Companies Doing Business in Europe?’ said.
Despite the slowdown, Europe was the major trading partner of India.
"The gradual turn-around has been achieved by Indian corporate by successfully re-positioning and re-aligning their operational capabilities in one of the most demanding and organised markets in the world," it said.
The survey said that although the current economic situation in Europe is resulting in number of procedural and regulatory obstacles for Indian companies to expand and do business in the continent, the region is still providing needed returns on the investments made.
About 50 companies, which participated in the survey, said that the continent has several positive factors which attracts domestic firms to do business there.
"It's economic, trade and investment policies generally welcome foreign investment. Other attractions include well developed capital markets, political and social stability, established and transparent legal systems," it added.
It said despite the ongoing gloomy economic scenario in Greece, Spain, Italy, Indian companies have overwhelmingly expressed optimism that the "worst is over for them" while engaging the region commercially.
About half of the firms surveyed said that even when the markets were going into a slowdown mode, in Europe, they have been able to register growth in their product categories.
"Half of the surveyed companies expected the current economic situation would improve in the coming 1-2 years time," it said adding " to keep their balance sheets stable, over 50 per cent of the Indian companies surveyed have already begun to diversify their markets within Europe".
However, the survey said that getting a business visa remained the most worrying issue for them to effectively engage with the European economies.
Over 20 per cent said during the current economic turmoil, rather than facilitating foreign investments, the respective European governments have made its processes more stringent in obtaining and renewing long-term visas, work permits and overall ease of doing business in the region.
Further, it said Indian industry is closely monitoring the ongoing negotiations of India-EU for a comprehensive free trade agreement.