Indian SMB market at 48.8 mn units growing at a CAGR of 4.53%: Zinnov study

Mciro scale businesses are contributing 95% of SMB landscape, followed by small scale businesses contributing 4.8%, rest 0.2% by medium scale

India has a total base of 48.8 million small and medium businesses, making it one of the fastest growing SMB nation globally, said a report from Zinnov, an advisory firm.

The Indian SMB space today is largely dominated by micro scale businesses, contributing 95% of the SMB landscape, followed by small scale businesses contributing 4.8% and the rest 0.2% by medium scale businesses.

Out of the 48.8 million SMBs around 55% are located in urban areas while the rest 45% constitutes to the rural regions. Over the last few years SMBs in India have gained strategic importance from corporations and government. The recently announced tax incentive for growing SMBs in the Union Budget is one such example, said the report.

"The SMB sector in India is growing at an exceptional rate and has the potential to be one of the primary drivers of the Indian economy. Today 1.5 million SMBs export their products or services outside India which is a sign of the sector’s rapid evolution. The sector is growing to be the largest employment generator in the country and today represents the true entrepreneurial spirit on the Indian business community,” said Praveen Bhadada, Director – Market Expansion, Zinnov.

The report also highlighted that around 82% of all SMBs are situated in 10 states in India. These 10 states, also account for two-third of the mobile and internet subscribers in the country.

As per the released report, the Indian SMB sector gives employment to approx. 81.16 million people in India which has increased at a CAGR of 5.29%, while the fixed investment has been consistently increasing over the years at 11.48%.