Home / Business and Economy / India's SMBs Thrive: Best Growth Since Pandemic!
India's SMBs Thrive: Best Growth Since Pandemic!
28 May
Summary
- 80% of Indian small businesses expanded in 2025, highest since pandemic.
- Customer experience and tech adoption fueled significant business growth.
- Rising costs and global uncertainty remain major challenges for firms.
Indian small businesses achieved their most robust growth since the COVID-19 pandemic in 2025, with four out of five firms reporting expansion.
This surge in growth was primarily attributed to enhanced customer experiences and greater technology adoption by businesses.
Despite the positive outlook, rising costs, particularly for materials, and global geopolitical uncertainty present significant challenges. Manufacturing and export-oriented businesses face increased pressure from higher energy, logistics, and raw material prices.
Hiring saw a notable increase, with 52% of small businesses expanding their workforce in 2025 and 69% planning further hires in 2026. Digital payments and e-commerce also contributed significantly, with 89% of businesses generating over 10% of revenue via digital payments.
Investment in artificial intelligence (AI) surged, with 36% of small businesses investing in AI in 2025, making it the top technology investment area. AI is seen as a productivity enhancer, although cybersecurity concerns are rising, with half of businesses expecting a cyberattack.
Demand for external finance remained strong, with four in five businesses seeking funding mainly for growth rather than survival. Access to finance and sound financial management are deemed critical for future expansion.
