What are the top 10 most profitable businesses in India?

Despite being a huge economy that ranks at number 3 in the GDP (PPP) league globally, India is a nation where the agriculture and unorganized sectors dominate employment generation. Contrary to what a lot of people may believe, we do not have a majority of our workforce employed by the organized sector.

The Indian workforce can be categorized by a simple and approximate formula – 65-35-15-85. Of the entire workforce, around 65% are engaged directly or indirectly in Agriculture, a massive number. This number will include farmers, farm labourers, transport workers, mandi workers, marketing people, rural business persons of all types etc. That leaves around 35% of Indian workforce, which we can call non-farm workforce. Of this 35%, not more than 15% are employed by the organized sector. They are paid salaries on fixed dates (almost), enjoy statutory benefits and can associate their work with some brandname of some credible size. The remaining 85%(of this 35%) are engaged in unorganized sector, that does not enjoy any of these characteristics. Are these not shocking statistics, for India, after nearly seven decades of economic independence? By the way, I have not counted homemakers and housewives, whose contribution anyway does not get counted in the GDP calculations.

We are a nation of 1.3 billion people (that’s 130,00,00,000 people). So  it is clear there is abundance of labour available in India, that is untrained, unskilled (or at best partially skilled) and has a poor chance of making it in the formal organized sector. What do these people do? Well, they create small businesses of their own, and get on with their lives quietly. 

Mainstream academia and media often speak disparagingly of these millions as “Mom-and-Pop” shops, because the comparison yardstick is the West, where most of retail is organized. But if these millions were to give up their businesses, and start pestering the governments of India (central and state) for Sarkari jobs, the whole system will crumble and break down in no time. We should be very thankful to these entrepreneurs who quietly create opportunities for themselves, and even employ many more.

I assume by small, the question means really small, even micro. And “top 10” must be the range and spread. The ones I am listing below, are usually proprietorships of the most unstructured format. I am intentionally not counting the Small-scale enterprises in the manufacturing sector. I am also leaving out individual contractors that use the internet economy to work from home, on projects anywhere in the world (these are educated and very capable people). 

In my opinion, ten of the smallest of businesses (not counting agriculture related work) that are widespread across India, totally taken for granted, and where literally crores of Indians (1 crore = 10 million) are self-employed, can be listed as:

1. Small retail shops – Millions of them spread across the length and breadth of India. They are usually owned by a single family, and entire work is done by two or three members of the same family. They do not formally book every transaction, and issue no receipts. Hence, they generally pay no taxes at all. In fact, if they are forcibly dragged in the tax net, many of them will simply become unviable! So what will happen? Right now we have around 1 million young people entering the workforce each month. Or 1.2 crore each year. We will substantially increase the number if these shops collapse.
2. Paan ki dukaan – Indians love their paan, supari, cigarettes, tobacco, and gutkha! And this gives birth to the legion of Paan Shops we see everywhere. They form a key part of the marketing plans of consumer goods giants like Unilever etc. As they say, the Ps of marketing are Product-Price-Promotion-Place-and-Paan shops.
3. Readymade Garment shops – Thousands of these small shops cater to the needs of the local communities they serve. While all conceivable brands are available in big malls, the small shops cater at an atomic level to their customers’ needs. And they are busy all year round. One can be often surprised at the economical rates these offer.
4. Tea stalls – Popularly called chai-ki-tapri, these are hangout places (for a few minutes) for the local small office-goers, daily wage labourers, and anybody passing by. Usually run by a single entrepreneur, they employ chhotus, young boys barely 8 or 10 years of age. It can be seen everywhere in India. They serve tea (of coffee), some basic snacks like pakoras, etc. Wholesomely unhealthy if taken on a daily basis.
5. Auto Repair shops – If you do not wish to spend a lot of money to get your vehicle (2 wheeler or 4 wheeler) repaired at the branded sales outlet or service centre, then the roadside repair shop is always at your disposal. Business is always brisk, and the technicians working can be amazingly skilled.
6. Mobile repair / accessories shops – The past few years have seen employment generation through this route. Tiny shops that are run by just one or two people can cater to a vast range of your repair / recharging needs. Found almost everywhere.
7. Grocery & Daily need shops – A type of the small retail shops. Some of them are organizedkirana stores, others much smaller but equally useful. They develop customer relationships through home delivery, some credit, and informal support for a range of needs. Usually have dedicated and loyal clienteles. The arrival of organized retail has, so far, not affected them much.
8. Small restaurants / coffee shops – Lots of them dot the highways as dhabas, or all commercial roads in cities of all sizes. They are usually much cheaper compared to branded cafes. I remember enjoying a hearty meal (for a family of four) for Rs 36 when  we hungrily went to a very small “south Indian” restaurant on a mountain side in Munnar, Kerala. What a meal it was! And what a rush the restaurant was handling. Such experiences make you want to become a food entrepreneur (the yummy margins!).
9. Seasonal shops – Every festival in India brings unique buying needs, and that leads to sprouting of such shops in specific areas of all towns and cities. So, during the Ganesh Chaturthi festivals, shops spring up overnight selling pooja samagri (material for religious prayers) and idols. Similarly, Deepawalisees fire-cracker shops and Holibrings with it gorgeously colourful temporary shops. All dealings are naturally in pure cash!
10. Hawkers of all types – Not to be outdone by the above, we have a whole range of hawkers who shout themselves hoarse strutting their stuff door-to-door, all day long. They do this on bicycles, or thelas, and it must be very exhausting work.

I personally feel that society ought to respect these individuals much more that it currently does. They are the most basic building blocks of our goods and services markets. The entrepreneurial streak of these unsung heroes can be very motivating if we see the sheer struggle their daily lives entail.

As India moves forward, while our economy will get more structured, the simultaneous growth of our population is going to make formal employment generation a huge challenge. Interesting times ahead!

source:https://www.quora.com/What-are-the-top-10-most-profitable-businesses-in-India/answer/Sandeep-Manudhane