The Impact of Women Entrepreneurship On The Economy in India

Explore the rise of women entrepreneurship in India, the challenges they face, government initiatives, and inspiring success stories shaping the startup ecosystem.

Kiran Mazumdar-Shaw, the founder of Biocon, started her journey with a small investment and a vision to bring affordable biotechnology solutions to India. Despite facing numerous obstacles, including skepticism from investors and limited resources, she built Biocon into one of India’s largest biopharmaceutical companies.

Compared to the time when Kiran was building her company, women today have more autonomy than ever to build and run businesses—often overcoming significant challenges along the way. They are making their mark across leadership roles, with data showing that women-led companies operate with strong efficiency and deliver outcomes just as impactful as those led by their male counterparts.

Thanks to combined efforts from both the public and private sectors, progress is being made. Today, approximately 20.37% of MSMEs in India are owned by women, contributing to over 23.3% of the labor force, according to a report by IBEF.

This Women’s Day is a great opportunity to reflect on the rising influence of women entrepreneurs in India and the pivotal role they play in shaping the country’s startup ecosystem.

Growth of Women Entrepreneurs in India

Since 2016, women entrepreneurs have made a considerable amount of impact on the startup ecosystem. Over 73,000 startups with at least one woman director have been recognized, representing nearly 48% of the total 152,139 startups supported under the initiative as of October 31, 2024.

Beyond the numbers, women entrepreneurs today are venturing into diverse industries—tech, finance, healthcare, sustainability, and beyond—breaking stereotypes and redefining leadership. This has a direct impact on employment, with women-led businesses projected to generate an additional 150-170 million jobs by 2030, indicating a substantial potential impact on the labour market. That aside, government-backed financial schemes to corporate diversity initiatives and women-centric incubators are giving greater impetus to introduce more diversity in the ecosystem. India has seen the emergence of several dedicated incubators aimed at supporting women entrepreneurs. A combination of support and boost of incentives propelled women-led startups to pick up $930 million, representing a significant growth from previous years.

That being said, let’s look at some of the obstacles that lie ahead.

Key Challenges Faced by Women Entrepreneurs

Despite an influx of positive change, women entrepreneurs still face challenges in numerous avenues. Across the board, funding seems to be the biggest obstacle, with a significant number of self-employed women in Indian metros not availing loans or applying for grants, but using their personal savings to fund their businesses.

The situation is not that much better when it comes to women founders raising from venture capitalists. A report by Encubay, a global diversity-focused network, reveals that between June 2023 and February 2024, a total of 799 funding deals took place. However, startups with at least one female founder secured only 163 of these deals. During this period, while startups collectively raised $6,646 million in funding, women-led ventures accounted for just $300 million—representing a mere 4.5% of the total capital raised. Besides this, traditional gender roles often confine women to domestic responsibilities, making it challenging for them to pursue entrepreneurial endeavors. A part of this could also be because several women entrepreneurs build businesses tied to their homes in India—according to one study by Niti Aayog, Many women are home-based and piece-rate entrepreneurs who depend significantly on intermediaries and contractors for market access. So, how are we addressing these issues?

Government and Private Sector Initiatives Supporting Women

Venture capitalists and founders are slowly waking up to the reality that this disparity exists. According to the same Encubay report, venture capitalists are also doubling down on their investments into women founders. Firms like Fireside Ventures, Titan Capital, Rainmatter Capital, She Capital, Better Capital, are among the leading investors that have funded women-founded ventures, with some of their bets in women founders. Like for instance, Fireside Ventures has backed Mamaearth and Yoga Bar two startups that have gone on to see great success in their respective verticals. Mamaearth listed on the bourses in 2024, and Yoga Bar was acquired by ITC for a period of 3-4 years. Government initiatives like The Stand-Up India scheme facilitates bank loans ranging from ₹10 lakh to ₹1 crore for women entrepreneurs to establish greenfield enterprises in manufacturing, services, or the trading sector, while The Micro Units Development and Refinance Agency (MUDRA) Yojana provides collateral-free loans of up to ₹10 lakh to women entrepreneurs looking to start or expand small businesses. This initiative has helped millions of women access credit without traditional financial barriers, enabling them to scale their ventures.

Success Stories of Indian Women Entrepreneurs

Today, now more than ever, women entrepreneurs are at the helm of companies that are unicorns or have been publicly listed. Falguni Nayar transformed Nykaa into a household name and went public in 2021 with a stellar debut, making Nayar one of India’s wealthiest self-made women. Her journey exemplifies how women entrepreneurs are reshaping India’s business landscape.

Another inspiring story is that of Ghazal Alagh, co-founder of Mamaearth, a D2C personal care brand that disrupted the beauty industry with its toxin-free, sustainable products. Launched in 2016, Mamaearth quickly gained consumer trust and became a unicorn in 2022, proving the immense potential of women-led startups.

Other entrepreneurs like Kalpana Saroj, who has a net worth of ₹917 crore, also started Kamani Tubes—turned her life around as a child bride, to becoming a successful entrepreneur in the field of copper fittings, symbolising that inspiration and ambition among women entrepreneurs can emerge from anywhere.

Also Read: Top 5 books on entrepreneurships

The WeWork Labs take

While we haven’t yet cracked the proverbial glass ceiling, there are still many critical whitespaces where women entrepreneurs have a critical role to play in order to create more impact. With India set to become the third largest consumer market this year, women founders can help build solutions that are more directed to the women consumer who influence approximately 70% of household spending. In areas like fintech, for instance, solutions that understand the risk appetite of women and their sensibilities will become more significant given that India is expected to reach a population of 1.69 billion by 2030. Within agriculture, women can lead ventures in organic farming, promoting sustainable practices while addressing food security issues—given that the sector already sees 30.14% of women entrepreneurs operating within it, according to the Ministry of Statistics and Program Implementation.

What are your thoughts on the subject? Let us know! See you in the next WeWork Labs blog.