Indian entrepreneurs: the drivers of growth
6 AUG, 2025
By Alquity
By Mike Sell, manager of the Alquity Indian Subcontinent Fund
India is the fastest growing major economy in the world, according to the International Monetary Fund (IMF). On course to grow 6.2% in 2025 and 6.3% in 2026, the IMF has projected that India will deliver annual growth of nearly 6.5% every year until 2030.
In contrast, global growth is expected to peak at 3.2% in the latter half of this decade, while advanced economies will struggle to collectively surpass 1.7%, according to IMF calculations.
It’s safe to say that India is something of an outlier and, arguably, warrants greater consideration by investors.
Informal to formal
The drivers behind India’s growth are hugely varied, but the contribution made by the country’s entrepreneurs should not be overlooked or underestimated.
There is no shortage of business ambition in India. In the 2024/25 Global Entrepreneurship Monitor, an annual assessment of national levels of entrepreneurial activity, India ranked fifth out of 56 countries. The report found that entrepreneurial confidence in India is very high, with 85% of people confident they have the skills or knowledge to start their own business. A similar proportion felt it is easy to start a business in India.
This confidence isn’t hyperbole. India’s Ministry of Micro, Small and Medium Enterprises (MSME) estimates that, as of the end of 2024, there were more than 63 million such businesses across the country. Part of the ministry’s remit is to help these businesses transition from the informal to the formal economy, which ultimately feeds a virtuous circle of enhanced productivity, increased tax revenue and a stronger economy.
A changing landscape
For Lalit Agarwal, founder of retail company V-Mart, starting his own affordable fashion business was a natural step having worked in his father’s tailor shop when he was young.
Agarwal saw a gap in Tier 2 and Tier 3 cities, where the populations are between 100,000 and 4 million people. Having opened its first store in 2003, V-Mart now has more than 500 locations in over 315 cities across India.
Inspiration can also come from unlikely sources, and for Aloke Bajpai, co-founder of online travel agency ixigo, it proved to be a touch of Bollywood magic.
While living and working abroad, he watched a Hindi-language film called Swades starring Shah Rukh Khan as a NASA engineer who returns to India, rediscovers his love for his homeland and becomes inspired to make a difference. The idea of coming back home and building something meaningful struck a chord.
Bajpai reached out to his friend Rajnish Kumar, who he met while studying at the Indian Institute of Technology (IIT) Kanpur – and both felt a strong urge to return and create something impactful for India.
They started their careers at European travel technology company Amadeus and their return to India in 2006 coincided with a rapidly growing travel industry.
In 2007, ixigo was born with the goal of simplifying travel for millions of Indians.
‘We are just getting started’
Agarwal and Bajpai are in full agreement that India is, and will continue to be, a land of immense opportunity.
V-Mart is expanding its footprint, investing in digital and aiming to serve customers across channels and geographies. They believe retail can be a force for good, creating jobs, enabling small-town dreams, and powering inclusive growth.
Ixigo started by solving for utility and convenience for the masses, before evolving into a transactional platform. Today, it leads the online travel agency market in trains and is aggressively scaling in flights and buses.
Conclusion
Smaller companies such as V-Mart or ixigo are, and will remain, the lifeblood of India’s economy and can offer some of the most dynamic and rapid growth opportunities.
Investors, however, often get tunnel vision when it comes to investing in India, relying heavily on ETFs and funds dominated by large-cap companies. They can be swayed by big names that are comfortably established that dominate these investment options.
This is perhaps to miss out on the wealth of thriving, dynamic and entrepreneurial smaller companies, who are driving change.
1 https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD/IND
2 https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/ADVEC/WEOWORLD
3 https://gemconsortium.org/reports/latest-global-report
4 https://www.pib.gov.in/PressReleasePage.aspx?PRID=2089308
