India’s Small Businesses Show Strong Growth and Optimism, CPA Australia Survey Reveals

According to the latest CPA Australia survey, India’s small business sector is outperforming much of the Asia-Pacific region in growth, optimism, and innovation. The 16th Asia-Pacific Small Business Survey found that 78% of Indian small businesses grew in 2024, reflecting a robust post-pandemic recovery. Business confidence remains high, with 86% of respondents expecting their businesses to grow in 2025. “This momentum has been driven by a vibrant business environment, a strong emphasis on innovation and rapid digital transformation,” said Mr. Prafulla Chhajed, a Certified Practising Accountant with CPA Australia.

Strong Export Ambitions

Indian MSMEs are increasingly turning toward global markets. The CPA Australia survey found that 64% of small businesses in India expect an increase in overseas sales this year, one of the highest figures among surveyed Asia-Pacific markets. Mr. Chhajed noted, “Booming global demand for Indian products and services has further buoyed MSMEs, encouraging many to export for higher profits.”

Challenges of Rising Costs and Access to Finance

While optimism is high, small businesses face growing financial pressure. Rising costs were cited as the most significant challenge by 40% of respondents in the CPA Australia survey. As a result, 72% sought external finance in 2024, with 34% doing so to offset rising expenses.

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Despite these challenges, access to finance remains favourable. Of those seeking funds, 43% found it easy or very easy to secure financing. This trend is expected to continue into 2025, with 39% anticipating similar ease.

Policy Reforms and Financial Inclusion

The government is actively supporting Indian MSMEs through revised policies. The updated MSME classification, effective from April 2025, increases turnover and investment limits, allowing more businesses to qualify for concessional and collateral-free loans. “These changes should enable more enterprises to have easier access to financial support,” said Mr. Chhajed.

Leading Job Creation Across Asia-Pacific

Indian small businesses are also proving to be the region’s most active job creators. In 2024, 46% expanded their workforce—the highest among surveyed nations by CPA Australia. This hiring trend is set to intensify, with 64% planning to add staff in 2025, well above the regional average of 45%.

Innovation and Technology Investment

A majority of Indian small businesses are prioritising innovation. In 2025, 78% intend to introduce new products, services, or processes. Artificial intelligence emerged as the leading area of technology investment in 2024, reflecting a shift toward more advanced digital capabilities.

A young, tech-savvy population shapes India’s entrepreneurial landscape. Young business owners under 40 are likelier to lead high-growth ventures and create jobs. “Small businesses not only create jobs but also nurture the next generation of entrepreneurs,” said Mr. Chhajed. He emphasised that seeking financial and accounting advice can help young startups manage risk and maintain cash flow.