New Delhi, May 6,2025 : India’s small business sector is one of the most dynamic and optimistic in the Asia-Pacific, according to the results of the 16th Asia-Pacific Small Business Survey conducted by one of the world’s largest accounting bodies, CPA Australia.
The survey findings for India reveal 78 per cent of Indian small businesses grew last year, reflecting the country’s strong post-pandemic recovery.
Business confidence is high, with 86 per cent of respondents expecting their business to grow this year.
Another standout trend is the growing export focus of India’s small businesses, with 64 per cent expecting an increase in overseas sales this year, higher than most of the surveyed markets.
“India’s micro, small and medium-sized enterprises (MSMEs) continue to perform strongly in a fast-changing economic environment,” said Chhajed.
“Their confidence, willingness to embrace technology and innovation and explore new markets positions them as a driving force in India’s fast-growing economy.”
The positive outlook among MSMEs can be attributed to a combination of domestic and international factors. Domestically, technological advancements, improved infrastructure like the enhanced internet connectivity, and supportive government policies for MSMEs in finance and digitalisation have fostered a beneficial environment for small businesses to thrive, Chhajed added.
“Booming global demand for Indian products and services has further buoyed MSMEs, encouraging many to export for higher profits. Government schemes offering financial incentives and export support have also motivated more MSMEs to expand their international presence,” Chhajed noted.
However, rising costs have been a challenge for many small businesses.
Last year, 40 per cent of respondents identified increasing expenses as their biggest challenge. Reflecting this pressure, of the 72 per cent of businesses that sought external funds in 2024, 34 per cent cited rising costs as the primary reason for needing finance.
Despite this, access to finance remains relatively favourable.
Another notable finding is the strong hiring trend. In 2024, 46 per cent of Indian small businesses reported increasing the size of their workforce, making them the leading job creators among the surveyed Asia-Pacific markets.
An even better result is expected this year, with 64 per cent planning to hire more employees, well above the survey average of 45 per cent.
In conclusion, the report said that the people remain a key asset for India’s small businesses, with good staff emerging as their most influential positive factor in 2024.
India also has a high proportion of small business owners or leaders under 40, and younger entrepreneurs are more likely to be running businesses that are growing and creating new jobs.
Small businesses are doubling down on innovation. In 2025, 78 per cent of Indian small businesses intend to innovate through the introduction of a product, process or service that is new to India or the world. There has also been a sharp rise in businesses identifying artificial intelligence (AI) as their primary technology investment in 2024.
“Small businesses not only create jobs but also nurture the next generation of entrepreneurs,” Chhajed said. “In a tech driven era, India’s abundant young population will continue to drive economic momentum. As digital natives, they are well positioned to innovate and harness emerging technologies.”
“By leveraging government initiatives, such as Stand-Up India and Startup India, which offer financial and infrastructure support, many young Indians have the opportunity to establish and expand their own business with greater ease,” Chhajed added.
