Challenges and opportunities for women-led enterprises in India’s current environment

In 75 years of India’s Independence, women have come a long way. The metrics on education, health, socio-cultural empowerment, and legal entitlement have undergone transformational change. However, India is still at the early stages of the journey towards women’s full social and economic inclusion. India must leverage the full participation of her increasingly skilled and educated women as we aspire to become the world’s third largest global economy.

Women's earning power yet to be leveraged in India

• India outperformed economic expectations with a robust GDP growth of 7.3% in 2023 but still has lower rates of female workforce participation than countries like Bangladesh, Indonesia, and Brazil.

• The economic argument for fostering women's participation is undeniable, India's GDP could increase by 27% to $770 billion, if India can increase its female workforce participation to the same level as men.

• India is ranked 57th among 65 countries in the Mastercard Index of Women

• Entrepreneurs (MIWE 2021), for participation of women in entrepreneurship, making India’s ratio among the lowest in the world.

• In India, the Ministry of Micro, Small and Medium Enterprises reports that there are only 27,75,390 registered women-owned MSMEs (just 18.8% of all enterprises).

What are the obstacles? 

As several studies have shown, educated women have aspirations and capabilities, but confront three major barriers:

Social and cultural norms: Cultural role expectations, especially marriage, family responsibilities, childcare, and elder care.

Support systems: Insufficient availability of affordable, reliable and safe childcare and elder care support services. This is particularly acute for nuclear families in urban centres.

Safety: Women often do not experience a safe environment while travelling to and from work, and often not even at their workplace.

Entrepreneurship as a viable option

Entrepreneurship can provide an ideal balance to Indian women, who are at present unable to leverage their skills, education, and experience to earn a living, give employment to others, and contribute to the economy. The entrepreneurship option offers flexibility to start an enterprise from home and working hours that allow women to take care of their family responsibilities.

Hurdles women entrepreneurs face

Women entrepreneurs don’t have it easy. While the government looks to the growth potential of the small but growing startup and SME sector, the landscape for India’s women entrepreneurs remains challenging and way below potential. In CWE’s report, “Roadmap to 2020: Accelerating Women Entrepreneurship in India.”, we identified 6 primary access challenges faced by women, which became hurdles for them to start or scale up their businesses.

Access hurdles

The Roadmap study showed that providing aspiring and existing women entrepreneurs with access to finance, information, networks and markets, as well as training in entrepreneurial skills, would lead to quantum growth in turnover, profitability and increased employment (of more women). Significantly, these women are transforming their families and communities’ socio- economic development, thus  enhancing India’s ranking in SDG parameters.

Fast forward to 2024

We still see that these six access hurdles pose significant challenges. In a qualitative dipstick conducted by CWE of their members, entrepreneurs listed the following challenges in order of priority:

1. Access to Markets
2. Access to Finance
3. Access to Networks
4. Access to Information
5. Access to Skills
6. Access to Technology

Opportunities today

Funding

Despite the global economic downturn, the robust Indian economy brings hope  that there will be availability of funding for women-owned and women-led businesses.

WTO and International Trade Center are jointly launching the WTO-ITC Women Exporters in the Digital Economy (WEIDE) Fund, an initiative that aims to leverage digitalisation to boost competitiveness and unlock new markets for women-led businesses.

An angel fund focused on connecting Indian women entrepreneurs to global angel investors is being launched soon. 

State and Central government agencies have grants and low interest loans available to women.

Markets

Public procurement mandates of central, state governments and the corporate sector are a huge opportunity area. The Government of India has a 3% mandate to buy from women MSMEs, but only 1.22% was utilised in 2023. State governments are following suit. As the government is the largest buyer in every country, we need to ensure that women entrepreneurs are aware and enabled to take advantage of this huge opportunity.

Corporations are also looking to boost their overall Diversity, Equity and Inclusion metrics while accessing innovative and cost-effective products and services from women. To effectively leverage these mandates, procurement teams will need sensitisation and DEI training. Women suppliers need to understand the needs of government and corporate organisations, their procurement processes, and be equipped to fulfil quality and delivery standards.

There is a move to more sector-specific investments

Some areas of growth that we see a boost in are: circular economy/sustainability, greentech, cleantech, specialised use of generative AI technology (legaltech, edtech, etc.)

Amrutha Moorthy, CEO of Patenti Technology Solutions, a winner of Government of Karnataka’s Elevate Women 2023 programme, is bringing AI into the IP sector, using human-centred design thinking  and AI to predict where innovations in industry are headed. “My business is just a year old. In addition to government funding, I have significant interest from investors,” she says.

Expansion of the entrepreneurship ecosystem

CWE has been seeing the slow but steady proliferation of entrepreneurship into Tier II and III centres of India. Tier II and III women entrepreneurs are embracing the flexibility that entrepreneurship provides along with opportunities to leverage local products and innovation, and bring them to national and global markets.

In an environment of economic growth without concomitant employment generation, the grassroots employment being created by women entrepreneurs is transforming local communities while bringing women into the mainstream.

India is one of the fastest growing, large economies in the world. As we aim to retain our leadership over the coming decades, women’s participation clearly holds the key to sustaining a  8%+ GDP growth rate and a more sustainable world!

Keen on getting a more detailed view of the landscape? Download the The State of Women's Entrepreneurship in India 2023 report here.