Indian Economy News

Indian small businesses record strongest growth since COVID in 2025

India’s small business sector emerged as one of the strongest performers in the Asia-Pacific region in 2025, recording its highest growth since the Covid-19 pandemic, according to CPA Australia’s Asia-Pacific Small Business Survey 2025-26. The survey revealed that 80% of Indian small businesses reported growth during 2025, significantly higher than the regional average of 63%. Business confidence remained robust, with 87% of respondents expecting their businesses to grow in 2026 and 84% anticipating expansion in the local economy. Improved customer experience, innovation and increased technology adoption were identified as key drivers supporting business growth. The survey also highlighted strong employment generation, with 52% of Indian small businesses increasing employee numbers in 2025, while 69% plan to expand their workforce in 2026. Additionally, 56% of Indian small business owners are below the age of 40, reflecting the growing role of young entrepreneurs in driving business transformation and economic growth in the country.

Digitalisation continued to play a crucial role in strengthening India’s MSME ecosystem. Around 89% of Indian small businesses generated over 10% of their revenue through digital payments, the highest proportion in the Asia-Pacific region, while 74% earned more than 10% of their revenue through e-commerce channels. Investment in artificial intelligence (AI) also increased significantly, with the share of businesses investing in AI rising from 26% in 2024 to 36% in 2025, making it the leading technology investment area. Furthermore, 41% of businesses sought advice from AI tools, compared to 25% in the previous year. Despite strong growth momentum, rising operational and material costs remained a major challenge, with 42% of respondents identifying increasing expenses as their biggest concern. The survey also highlighted growing cybersecurity risks, as nearly half of Indian MSMEs reported productivity losses due to cyber incidents during 2025.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.