Indian SMB market at 48.8 mn units growing at a CAGR of 4.53 pc

NEW DELHI, INDIA: Market expansion and globalization advisory firm Zinnov has released an in-depth report titled, 'Indian SMB Sector 2013' capturing interesting facts and figures on the burgeoning SMB segment in India.

The study revealed that with a total base of 48.8 million SMBs, India is the fast growing and is to become the largest SMB nation globally.

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

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. Initiatives like these have helped SMBs enhance their competitiveness in the global markets.

Globalization in trade is further forcing SMBs to improve their efficiency of conducting business, highlights the study.

Talking about the findings from the study, Praveen Bhadada, Director - Market Expansion, Zinnov said, "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," added Bhadada.

The report also highlighted that around 82 percent of all SMBs are situated in 10 states in India. These 10 states, also account for 2/3rd of the mobile and internet subscribers in the country. Additionally, Manufacturing is the single largest vertical with at an all India level followed by Repairs & Maintenance and Services vertical, it read.

Greater employee mobility, increased competition and expansion in terms of office locations have further pushed more SMBs in India to generate more employment.

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 percent, while the fixed investment has been consistently increasing over the years at 11.48 percent.

Key findings of the study:

* India is a hub of 48.8 million SMBs giving employment to 81.16 million individuals

* Micro enterprises account for 95 percent of total SMBs, small & medium put together hold the remaining 5 percent share

* 1.5 million Indian SMBs export their products or services globally

* 55 percent of SMBs are located out of urban cities whereas 45 percent are situated in rural areas