Indian Small Businesses Soar Amid Economic Challenges in 2025

Indian small businesses experienced unprecedented growth in 2025, with 80% reporting expansion. Despite challenges such as rising costs and geopolitical uncertainty, 87% anticipate further growth in 2026. Key factors included tech adoption and customer experience improvements, backed by government policies and robust hiring trends.

In 2025, Indian small businesses recorded significant growth, marking their strongest performance since the COVID-19 pandemic, according to CPA Australia's Asia-Pacific Small Business Survey 2025/26. Four out of five Indian firms reported expansion, far outpacing the Asia-Pacific average of 63%.

The survey highlighted that technology adoption and improved customer experience were pivotal in driving growth. However, escalating costs remain a pressing concern, with 42% of businesses citing rising expenses as their biggest challenge. Material costs have particularly been a burden for the third year running.

Aniket Talati of CPA Australia lauded the dynamism of Indian MSMEs, attributing their success to supportive government policies and export market opportunities. Nevertheless, Talati warned of the uncertainties posed by geopolitical tensions that threaten to destabilize business operations.