From its strategic location to low operational costs, SMEs hail Indore’s enabling business ecosystem

Indore has always been a cosmopolitan place with diverse ethnicity, says Gaurav Pahwa, Director, Lotus Electronics. The company, which was founded in the Madhya Pradesh city 24 years ago, is a household name today in the state when it comes to buying electronics. Due to its diverse background, the founders back then were sure that the city was ready for a big electronics store.

Today, Pahwa says that Indore as a city has a population of over 30 lakhs and has all the major national and international brands of retail operating with two industrial towns like Pithampur and Dewas, very close to the city.

To register for the SIDBI ET MSME Conclave in Indore, click here.


Some reasons that have made the city a great hub for small businesses include its central India location, lower operational costs, and supportive infrastructure, says Anubhav Dubey, Co-Founder and CEO of Indore-based tea-chain Chai Sutta Bar.

“Indore's thriving small business industry is fueled by several factors. First, its strategic location in central India provides easy access to major cities like Delhi, Mumbai, and Bangalore, enhancing connectivity for startups. Second, a business-friendly ecosystem, exemplified by successful ventures like Witty Feed and Super Sourcing, fosters collaboration among entrepreneurs. Third, the city's supportive infrastructure, recognized as India's cleanest for six consecutive years, attracts talent and contributes to a positive work environment. Additionally, the relatively lower operational costs make Indore an advantageous hub for SMEs. Notably, the food capital reputation, driven by markets like Chappan and Sarafa, further distinguishes Indore, attracting F&B startups,” he says.

He further adds that the city’s digital transition has significantly benefited SMEs there. Government initiatives, such as streamlined policies and stable regulations, have been communicated effectively through digital platforms. Regular meets and sessions organized by officials keep the business community informed about updates and opportunities.

“Going digital has also broadened the market reach for Indore-based startups, allowing them to trade and collaborate globally. This shift not only facilitates knowledge dissemination but also opens doors to new business avenues, providing a platform for local businesses to thrive on a global scale,” he says.

Adding here, Pahwa says that Indore’s smart city projects have helped the small businesses immensely as well as improved availability of competent manpower.

Similarly, for Tejas Jain, founder and CEO of SME insurance company BimaKavach it was Indore's entrepreneurial spirit and booming business scene, along with the city's rapid emergence as a key player in the Indian tech revolution, that influenced him to start his company in the city in 2021.

Further, he mentions that in 2024, Indore is not only a massive food and FMCG hub but also is growing as the manufacturing powerhouse of India.

“Industries like plastics, textiles, and manufacturing, particularly in Pithampur, showcase the city's thriving entrepreneurial spirit. Clients like Kriti Industries and Man Industries exemplify local businesses that are not only flourishing in Indore but expanding to serve the entire country,” he says.

He attributes the success of SMEs in Indore to a "Building for Bharat" approach. SMEs in smaller cities, including Indore, have a local-first mindset and a deep understanding of the needs of tier two and three cities.

“Their ability to identify problems on the ground level, coupled with the supportive business ecosystem nurtured by the Madhya Pradesh government, makes them effective problem solvers,” he says.

SIDBI, in association with The Economic Times, is starting a series of events nationwide that will bring together micro, small & medium enterprises (MSMEs), policymakers and ecosystem enablers. The first event will start from Indore on January 9th, followed by events in cities such as Bhubaneswar, Ludhiana, Aurangabad, Rajkot and Belagavi.

To register for the SIDBI ET MSME Conclave in Indore, click here.