- 78 per cent of small businesses grew last year, reflecting the country’s strong post-pandemic recovery.

- 86 per cent of respondents surveyed expecting their business to grow during 2025.

- 64 per cent businesses expecting an increase in overseas sales this year.

- 40 per cent of respondents identified increasing expenses as their biggest challenge last year.

India is home to one of the most dynamic, optimistic and resilient small business sectors across Acia-Pacific and it is going to remain so amid brief intervals of challenging times. The findings of the 16th Asia-Pacific Small Business Survey conducted by one of the world’s largest accounting bodies, CPA Australia reveal that in case of India, 78 per cent of small businesses grew last year, reflecting the country’s strong post-pandemic recovery. 

Prafulla Chhajed, a Certified Practising Accountant with CPA Australia said, “This momentum has been driven by a vibrant business environment, a strong emphasis on innovation and rapid digital transformation.” Chhajed, who has more than 30 years of accounting and finance experience in India added, “India’s micro, small and medium-sized enterprises (MSMEs) continue to perform strongly in a fast-changing economic environment. 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 survey revealed that the overall business confidence is visibly high, with 86 per cent of respondents expecting their business to grow during 2025. Another good thing about Indian small businesses is their preparedness for exports. The survey say that the growing export focus of India’s small businesses is higher than most of the other markets surveyed with 64 per cent businesses expecting an increase in overseas sales this year.

Policy Support is Driving Growth

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. 

CPA Australia, which represents more than 175,000 members working in over 100 countries and regions around the world, said in the report that booming global demand for Indian products and services has given MSMEs new wings and encouraged many of them to explore overseas markets for higher profits and business growth. Moreover, government schemes offering financial incentives and export support have also motivated more MSMEs to expand their international presence.

Rising Cost Remains a Concern

Conducted by CPA Australia, the annual survey collected responses from 4,236 small businesses with fewer than 20 employees across 11 Asia-Pacific markets in November and December 2024, including 507 from India, the survey said that rising costs have remained a consistent challenge for many small businesses. Survey says that 40 per cent of respondents identified increasing expenses as their biggest challenge last year. Reflecting this pressure, of the 72 per cent of businesses that sought external funds last year, 34 per cent cited rising costs as the primary reason for their growing financial needs.

Having said this, access to finance is not that much worrisome and it remains relatively favourable. Of those that sought external funding last year, 43 per cent reported that sourcing funds for various needs was easy or very easy. The survey claims that this trend is expected to continue this year, with 39 per cent anticipating smooth access to finance.

Chhajed said that the government appeared focused on improving financial inclusion to scale up MSMEs, with various schemes offering them financial support. He noted that this focussed approach of easy financing to MSMEs also reflected in the government’s recent revision to MSME classification criteria effective from 1st April, 2025.“ Chhajed added that Small businesses looking for affordable financing should take note of the significant changes to the turnover and investment criteria under the revised MSME classification, including increased limits and additional financial support. These changes should enable more enterprises to have easier access to concessional loans, collateral-free loans and other state government schemes.

Hiring Trend Upward

Another notable finding in the CPA Australia APAC (Acia Pacific) Small Business Survey depicts 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. The survey says that 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. 

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. 

Innovation is Key

This is no longer a mere punchline in conferences and meetings, but it has managed to become centre of business strategy and budget allocation of small businesses in India. The survey claims that 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,” Mr 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.

“Given that irregular income and cash flow are significant concerns for entrepreneurs, especially in the early stages of their businesses, they should consider seeking professional support from accountants and financial advisors. Expert guidance can help them manage cash flow effectively and navigate financial challenges with greater confidence.”