Combined with a very strong domestic economy, this is expected to make Indian small businesses one of Asia-Pacific's top performers in 2022.

CPA Australia's annual APAC Small Business Survey collected views from 4,252 small business owners or senior managers across 11 Asia-Pacific markets, including 525 from India. Conducted from November to December 2021, the survey is designed to understand local business conditions, challenges, and confidence.

Sixty-two percent of Indian small businesses reported growth last year, with 46 percent experiencing very strong growth – the highest result of the markets surveyed. As a result of this, 77 percent of respondents said that they had hired more employees, outperforming all other markets.

India's small businesses are likely to be strong creators of new jobs this year, with 83 percent expecting to increase employee numbers, ranking first among all markets. Sixty-eight percent of respondents forecast their small business will grow this year.

Leslie Leow, General Manager – Emerging Markets, CPA Australia said, "The survey results confirm that Indian small businesses are very ambitious. Despite the pandemic, most undertook actions such as making substantial changes to the product or service and made investments associated with high-growth businesses.

"India's small businesses take the crown as the most innovative in the region. Ninety-four percent told us they will or may introduce a new product, process, or service this year, surpassing all other markets surveyed for the second year in a row. A strong and competitive local economy, growing access to skilled workers, and government policies such as the recently signed India-UK Global Innovation Partnership is anticipated to trigger a golden era of innovation for the sector."

Reflecting their strong innovative culture, Indian small businesses are investing in technology with a very high success rate. Of local businesses that invested in technology last year, 80 percent reported that such investment had already improved their profitability, well above the survey average of 54 percent.

To support their innovations, India's small businesses were the most likely to access external finance for business growth last year, and are the second most likely to expect accessing finance for growth this year. Financing this growth shouldn't be difficult with 69 percent expecting "easy" or "very easy" access to external finance this year, the highest result of the markets surveyed.

India's small businesses are also one of the leaders in selling online, with 83 percent generating more than 10 percent of their revenue through that channel. Related to that, they are also one of the leaders in receiving payment through new payment technologies such as PayTM and PhonePe.

"Of course, the unfortunate companion to this strong digital focus is increased cybersecurity risks. India's small businesses are not blind to this, with 78 percent expecting to be cyberattacked this year. However, this is not necessarily transferring through to action, with only 51 percent reviewing their cybersecurity protections in the past six months."

Indian small businesses were the most likely to have sought advice from IT consultants (49 percent), business/management consultants (40 percent) and accountants (35 percent). Seeking external advice is a characteristic of high-growth businesses as professional advisers can guide small businesses through challenges and help them take advantage of opportunities.

Leow said, "Policy measures such as the Special Credit Linked Capital Subsidy Scheme are likely to accelerate technology adoption and meet strong demand for external finance. Indian small businesses should make full use of these government initiatives to expand and innovate, however, some may wish to consider whether they are striking the right balance between short-term growth and sustainable development."

CPA Australia recommends that Indian small businesses consider the following actions:

• Leverage government initiatives to invest in technologies and to keep innovating
• Seek professional advice to adapt your business strategy to a high growth tempo
• Focus on cybersecurity
• Only take on debt where calculations show the expected return on investment exceeds the cost of new loans.

About CPA Australia

CPA Australia is one of the largest professional accounting bodies in the world, with more than 170,000 members in over 100 countries and regions, including more than 2,000 members in South Asia. Our core services include education, training, technical support and advocacy.

CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes.