India's entrepreneurial awakening: Navigating geopolitical shifts and domestic policy reforms

Soni, Ramesh; Schimmel, Kurt; Slack, Frederick; Nicholls, Jeananne Article India's entrepreneurial awakening: Navigating geopolitical shifts and domestic policy reforms Administrative Sciences Provided in Cooperation with: MDPI – Multidisciplinary Digital Publishing Institute, Basel Suggested Citation: Soni, Ramesh; Schimmel, Kurt; Slack, Frederick; Nicholls, Jeananne (2025) : India's entrepreneurial awakening: Navigating geopolitical shifts and domestic policy reforms, Administrative Sciences, ISSN 2076-3387, MDPI, Basel, Vol. 15, Iss. 4, pp. 1-20, https://doi.org/10.3390/admsci15040122 This Version is available at: https://hdl.handle.net/10419/321266 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Received: 2 February 2025 Revised: 7 March 2025 Accepted: 18 March 2025 Published: 25 March 2025 Citation: Soni, R., Schimmel, K., Slack, F., & Nicholls, J. (2025). India’s Entrepreneurial Awakening: Navigating Geopolitical Shifts and Domestic Policy Reforms. Administrative Sciences,15(4), 122. https://doi.org/10.3390/ admsci15040122 Copyright: © 2025 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/ licenses/by/4.0/). Article India’s Entrepreneurial Awakening: Navigating Geopolitical Shifts and Domestic Policy Reforms Ramesh Soni 1,* , Kurt Schimmel 2, Frederick Slack 1and Jeananne Nicholls 2 1Department of Management, Indiana University of Pennsylvania, Indiana, PA 15705, USA; [email protected] 2Department of FAME, Slippery Rock University, Slippery Rock, PA 16057, USA; [email protected] (K.S.); [email protected] (J.N.) *Correspondence: r[email protected]; Tel.: +1-724-357-7786 Abstract: This paper examines the intersection between entrepreneurship government policy and managerial theory. The context chosen for this study is India. India has experienced a significant global geopolitical shift that is coinciding with India’s domestic policy reforms and notable domestic initiatives. Since 2014, India’s entrepreneurial ecosystem has seen a significant increase in the number of startups and unicorns. This paper presents arguments that the confluence of global realignments, such as the diversification of supply chains away from China and increasing interest in the Indo-Pacific region, along with domestic initiatives like “Make in India”, “Startup India”, and digitalization drives, along with massive investments in infrastructure improvements, have made India a desirable destination for entrepreneurial activity. By examining these factors through the lens of three theories—resource-based view, global value chain, and innovation ecosystem theory—this paper identifies key opportunities and challenges for entrepreneurs across various sectors. It is hoped that this research will contribute to a deeper understanding of India’s evolving entrepreneurial landscape. In addition, entrepreneurs, policymakers, and investors can benefit from this article to understand the opportunities and challenges India poses in order to contribute to India’s continued economic growth and its emergence as a global entrepreneurial powerhouse. Finally, this paper helps to bridge the gap between economic policy and management theory. Keywords: entrepreneurship; economic reforms; make in India; innovation; digital transformation; resource-based view; global value chain; innovation ecosystem theory 1. Introduction This paper highlights a successful, focused use of government policy to create an entrepreneurship ecosystem. Since the economic liberalization that started in 1991, Indian GDP has jumped from the 17th ranked to the 5th ranked economy in the world, with GDP increasing from USD 270 B in 1991 to about USD 3.5 trillion in 2023 (Figure 1). This growth exceeds the growth explained by population increases in India. Despite this large growth in GDP, India lags behind other major economies in terms of per capita GDP, which was just USD 2480.80 in 2024, or about USD 8103 when adjusted for purchasing power parity. Yet, India is expected to become a major growth engine for the world in the 21st century. The factors that favor India’s growth are its (1) vast and youthful population, (2) burgeoning middle class, and (3) rapidly developing infrastructure, including digital infrastructure. China, with a focus on the industrial sector, underwent a similar but more explosive growth with the same favorable factors (Bosworth & Collins,2008). Hence, India has attracted significant attention from investors and entrepreneurs from all over the world. Another set Adm. Sci. 2025,15, 122 https://doi.org/10.3390/admsci15040122 Adm. Sci. 2025,15, 122 2 of 20 of factors that are fueling this surge in interest are (a) dramatic geopolitical shifts on the international stage and (b) India’s domestic policy reforms during the last ten years or so. Adm. Sci. 2025, 15, x FOR PEER REVIEW 2 of 20 with the same favorable factors (Bosworth & Collins, 2008). Hence, India has attracted significant attention from investors and entrepreneurs from all over the world. Another set of factors that are fueling this surge in interest are (a) dramatic geopolitical shifts on the international stage and (b) India’s domestic policy reforms during the last ten years or so. Figure 1. India’s GDP (current US dollars). Data from Worldbank.org. The world has been experiencing a recalibration of geopolitical dynamics over the last 60 years. After the Second World War, the economy of Japan, with their intense focus on quality improvement, catapulted to the second largest economy in the world. Then came the rise of China, which is currently the world’s second largest economy in terms of GDP and is positioned to rise to number one in about 10 years from now (Morrison, 2019). However, the global pandemic and rising trade tensions have brought to the fore the risks of vulnerability caused by concentrated supply chains. As a result, multinational corporations are attempting to diversify and move away from their reliance on a single source to eliminate these vulnerabilities (McKinsey Global Institute, 2023). India, given its democratic institutions and large, young workforce, could benefit from this shift. Moreover, given the strategic importance of the Indopacific region, as well as India’s role in the geopolitics of the region, India is attracting engagement and investments from key global partners (Pant, 2022). The current government understands that if India is to play a larger role in the world, it must ameliorate the condition of a large, impoverished population in the country. Toward this end, the Indian government announced a series of policy reforms, as well as new initiatives to foster economic growth. Among these initiatives are “Make in India”, “Digital India”, and “Startup India”. These have created an environment to promote entrepreneurial activities (Kumar, 2018). These and other initiatives and policy reforms are simplifying bureaucratic regulations, creating support structures for startup and small/medium enterprises (SMEs), and promoting innovation. Additionally, as stated by Srinivas (2021), the government is expanding efforts to digitize India. This has taken the form of (a) India’s highly successful unified payment interface (UPI), which has made India a world leader in instant payments with no cost to the payer or payee, (b) the expansion of internet connectivity, and (c) digital government. These efforts have made it possible for entrepreneurs to explore new markets and opportunities (Srinivas, 2021). Given these geopolitical developments and the domestic efforts of the present government, India is now uniquely placed to serve as fertile ground for opportunities for local and international entrepreneurs. This paper attempts to explore these opportunities in light of innovation ecosystems, global value chains, and a resource-based view: three major theoretical frameworks of strategic management. The authors assert that the present 0M 500,000M 1,000,000M 1,500,000M 2,000,000M 2,500,000M 3,000,000M 3,500,000M 4,000,000M 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 Figure 1. India’s GDP (current US dollars). Data from Worldbank.org. The world has been experiencing a recalibration of geopolitical dynamics over the last 60 years. After the Second World War, the economy of Japan, with their intense focus on quality improvement, catapulted to the second largest economy in the world. Then came the rise of China, which is currently the world’s second largest economy in terms of GDP and is positioned to rise to number one in about 10 years from now (Morrison, 2019). However, the global pandemic and rising trade tensions have brought to the fore the risks of vulnerability caused by concentrated supply chains. As a result, multinational corporations are attempting to diversify and move away from their reliance on a single source to eliminate these vulnerabilities (McKinsey Global Institute,2023). India, given its democratic institutions and large, young workforce, could benefit from this shift. Moreover, given the strategic importance of the Indo-pacific region, as well as India’s role in the geopolitics of the region, India is attracting engagement and investments from key global partners (Pant,2022). The current government understands that if India is to play a larger role in the world, it must ameliorate the condition of a large, impoverished population in the country. Toward this end, the Indian government announced a series of policy reforms, as well as new initiatives to foster economic growth. Among these initiatives are “Make in India”, “Digital India”, and “Startup India”. These have created an environment to promote entrepreneurial activities (Kumar,2018). These and other initiatives and policy reforms are simplifying bureaucratic regulations, creating support structures for startup and small/medium enterprises (SMEs), and promoting innovation. Additionally, as stated by Srinivas (2021), the government is expanding efforts to digitize India. This has taken the form of (a) India’s highly successful unified payment interface (UPI), which has made India a world leader in instant payments with no cost to the payer or payee, (b) the expansion of internet connectivity, and (c) digital government. These efforts have made it possible for entrepreneurs to explore new markets and opportunities (Srinivas,2021). Given these geopolitical developments and the domestic efforts of the present government, India is now uniquely placed to serve as fertile ground for opportunities for local and international entrepreneurs. This paper attempts to explore these opportunities in light of innovation ecosystems, global value chains, and a resource-based view: three major theoretical frameworks of strategic management. The authors assert that the present government’s emphasis on the ease of doing business and the promotion of innovation has Adm. Sci. 2025,15, 122 3 of 20 led to a more supportive institutional environment for local and international entrepreneurs in India. The authors explore how the confluence of three occurrences—geopolitical shifts, domestic policy reforms, and the enhanced availability of firm-level resources—is shaping the entrepreneurial landscape in India. The timeline for the paper is from the 2010s to 2024. This extended timeframe allows for policies to be enacted and have their impact—positive or negative—recognized. The analysis in this paper helps explain the factors promoting entrepreneurial success in India, which in turn can be valuable not just to entrepreneurs, but also to policymakers as well as investors. 2. The Confluence of Global Political Trends Currently, the world is experiencing transformative geopolitical dynamics. There is a rebalancing or shifting of power taking place between emerging and established economic alliances and nations, which is creating challenges as well as opportunities for nations worldwide. This article examines how the political changes in countries such as USA, Russia, and China are giving rise to entrepreneurial opportunities in India. This article illustrates how entrepreneurs, by being strategic, can take advantage of these evolving power shifts. 2.1. Current Global Trends 2.1.1. The US–China Dynamic and Supply Chain Diversification The US president Donald Trump started his 2017–2021 “term by launching a trade war with China” to fulfill his campaign promise (Allen-Ebrahaminian,2021). During President Trump’s second term that started in January 2025, trade tensions with China continues. Additionally, trade disputes expanded to include Canada and Mexico, and there are indications of possible future trade actions involving other nations. Incidentally, it must be pointed out that President Biden (2021 to 2025) not only continued but expanded the tariff on China from the first term of President Trump. To make the matter worse, during the first term of President Trump, the virus that caused the COVID-19 pandemic was traced to Wuhan, China. Nevertheless, the pandemic exposed the global supply chain’s vulnerability, given the overreliance on one single source—China. Given that the United States and China were already engaged in an escalating tug of war with respect to strategic competition, multinational corporations (MNCs) and governments unified to diversify and reduce single-source dependency (McKinsey Global Institute,2023). Given its large and young population, strong democratic institutions, and growing manufacturing capabilities, India is well suited to be one of the main beneficiaries of the supply chain diversification strategy. Many MNCs embraced the “China Plus One” strategy and started developing second manufacturing sites in countries like India to mitigate risks and build resilience (Fernandes & Sharma,2021). This trend creates opportunity for entrepreneurs in India. 2.1.2. The Russia–Ukraine Conflict and Energy Security The prolonged conflict between Russia and Ukraine has sent shockwaves through the global energy market. It is obvious that energy security and diversification are needed for every country, including India. India’s long-standing reliance on energy imports requires continued strategic efforts to meet its energy needs. It must be noted that India continued to buy “cheap” oil from Russia while the US and the west boycotted it during the Russia–Ukraine conflict. Nevertheless, the Russia–Ukraine war has created an opening for entrepreneurs in the renewable energy sector. As Bhattacharya (2022) indicates, India has declared very ambitious renewable energy adoption targets. Current geopolitics further incentivizes investments in solar, wind, and other renewal/clear energy sources. Thus, there are opportunities for entrepreneurs to exploit this trend by developing new Adm. Sci. 2025,15, 122 4 of 20 technologies and innovative solutions for the production, storage, and distribution of renewable/clean energy. 2.1.3. China’s Belt and Road Initiative and Regional Connectivity China’s Belt and Road Initiative (BRI), alternatively known as the New Silk Road initiative, was launched in 2013 to initially “link East Asia and Europe through physical infrastructure”, but it has now expanded to include Africa, Oceania, and Latin America (McBride et al.,2023). McBride et al. (2023) point out that the USA and some Asian countries see this as a Trojan horse for military expansion and strategic influence. Perhaps this has created an impetus for India to further strengthen its own regional partnerships. In this respect, Indian entrepreneurs can utilize their understanding of cultural and market nuances of neighboring countries and develop economic ventures ranging from infrastructure development to cross-border trade and technology transfer (Pant,2022). These factors combine to increase competition globally for resources and markets. India’s policies, with respect to its regional partnerships, are not new, but their interaction with global power dynamics would create economic ecosystems, which, in turn, would create opportunities for global as well as Indian entrepreneurs. 3. India’s Economic Domestic Policies and Potential 3.1. India’s Domestic Policy Landscape Beyond the external geopolitical shifts that were addressed in the above paragraphs, the domestic policy changes under the current government have played a crucial role in fostering entrepreneurial culture as well as opportunities. India’s entrepreneurial landscape is undergoing a significant evolution, fueled by a spate of ambitious, yet commonsense, domestic policy reforms under the current political leadership. More specifically, initiatives such as “Make in India”, “Startup India”, and “Digital India” have created a more supportive environment for business and innovation (Kumar,2018). These new policies and initiatives have focused on rationalizing regulations, boosting investment, and supporting startups and small businesses to flourish. The evolving geopolitical landscape presents a complex array of challenges and opportunities for India. If India can navigate these shifts strategically and exploit its domestic strengths, it can position itself as a major destination hub for entrepreneurial activity. Through wise policy decisions, India is positioning itself to adapt and capitalize on these global changes. Entrepreneurs, in turn, can capitalize on these emerging opportunities by developing innovative solutions that cater to the changing needs of the global economy. This article examines how these policy changes and initiatives are creating a vigorous ecosystem for entrepreneurial activity, fostering innovation, and, more importantly, attracting investment across various sectors. The following paragraphs discuss some of these key policies and initiatives further. 3.1.1. Make in India: Boosting Manufacturing and Exports Launched in 2014, the “Make in India” campaign under the present government is deemed as the largest initiative ever to attract foreign direct investment to start manufacturing in India (Mehta & Rajan,2017). The campaign aims to transform India into a global manufacturing destination. Kumar (2018) contends that this policy has created numerous opportunities for entrepreneurs in sectors such as electronics, automobiles, textiles, and pharmaceuticals due to the initiative’s focus on key enablers such as the promotion of domestic manufacturing, encouragement of foreign direct investment (FDI), and acceleration of technology transfer. It must be stated that India has not banned the import of manufactured goods, such as iPhones; rather, it is actively incentivizing manufacturing within India to boost its industrial base. In addition, the focus on the ease of doing business, Adm. Sci. 2025,15, 122 5 of 20 infrastructure development, and skill enhancement has strengthened the manufacturing ecosystem, enabling entrepreneurs to compete globally. 3.1.2. Startup India: Fostering Innovation and Entrepreneurship According to a press release by the Government of India (2016), the Ministry of Information and Broadcasting launched several new initiatives in 2016. The “Startup India” initiative was launched on 16 January 2016, with the goal of promoting a thriving startup ecosystem in India across all demographics in India. A similar initiative called “Standup India” was launched on 5 April 2016. The key distinction between the two initiatives was that the second one was geared toward women, disadvantaged classes, and tribal sections of society. These initiatives provided financial assistance, mentorship, and regulatory support, with the hope of encouraging a new generation of entrepreneurs to pursue innovative ideas and build growing businesses. Further, the Government of India has supported the establishment of incubators, accelerators, and funding mechanisms, which, in turn, has further facilitated the growth of startups across diverse sectors of economy, including technology, healthcare, and education (Dutta,2019). 3.1.3. Digital India: Expanding Digital Infrastructure and Access According to MyGov India (n.d.), the “Digital India” program was launched on 1 July 2015. The aim of the program was to use technology to enable “access to better service for education, healthcare, and agriculture”. In almost a decade since its launch, it has “laid the foundations for a strong, robust and secure Digital India”. The initiative’s aim is to close the digital divide and transform India into a digitally empowered society. Even though internet use and mobile penetration in India is low by the developed world’s standard, India is expanding internet connectivity, promoting digital literacy, and encouraging the adoption of digital technologies. Especially praiseworthy is India’s unified payment interface (UPI), which has resulted in a cash-to-digital payment transformation (Denny,2024). The Digital India initiative has unlocked new markets and opportunities for entrepreneurs in the digital economy. According to Srinivas (2021), the growth of the e-commerce, fintech, and digital health sectors symbolizes the transformative impact of “Digital India” on the entrepreneurial landscape. 3.1.4. Infrastructure Development: Connecting Markets and Enhancing Efficiency According to KPMG (2024), in the last ten years, India has experienced tremendous expansion in its infrastructure, including roads, railways, metro rail networks, ports, and airports. This expansion has significantly improved connectivity and logistics across the country, which has not only facilitated the movement of goods and services but also created new opportunities for entrepreneurs in sectors such as transportation, logistics, and construction. Many of these infrastructure projects rely on public–private partnerships (PPPs) for funding. India is also committed to developing dedicated freight corridors and industrial corridors, which would potentially further enhance the efficiency of supply chains, enabling businesses to operate more effectively (Goyal,2020). 3.1.5. Policy Reforms: Simplifying Regulations and Promoting Investment Beyond the highly visible and promoted initiatives described above, the government has implemented numerous policy reforms to simplify regulations with the goal of reducing bureaucratic hurdles for promoting investments. Some of the reforms are also aimed at reducing the parallel (or black) economy that exists for large-scale tax evasion. These reforms have included measures such as the Goods and Services Tax (GST), insolvency and bankruptcy codes, and the liberalization of Foreign Direct Investment (FDI) norms. According to The World Bank (2023), these initiatives have created a more predictable and Adm. Sci. 2025,15, 122 6 of 20 transparent business environment, encouraging both domestic and foreign investors to participate in India’s growth story. The convergence of these initiatives and domestic policy reforms has created a playing field that is very favorable for entrepreneurs that are looking to capitalize on the opportunities present in India. A new generation of empowered entrepreneurs are eager to pursue their dreams and contribute to India’s economic growth, given that the government is promoting innovation and investment, as well as improving the ease of doing business. As India continues to navigate the complexities of the global landscape, its domestic policy reforms will transform its entrepreneurial future. 3.2. Indian Entrepreneurial Potential India, without a doubt, is experiencing an entrepreneurial awakening. This section of the article attempts to (a) explore the historical context of Indian entrepreneurship, (b) analyze the current emerging trends, and (c) examine the immense potential of this mushrooming ecosystem. It is fascinating to examine the intersection of cultural, economic, and policy factors, with the hope to understand the unique characteristics and future trajectory of Indian entrepreneurship. 3.2.1. Historical Context: From Tradition to Innovation According to The Financial Express (2023), entrepreneurship in India has deep historical roots, with a rich tradition of merchant communities and family businesses, dating as far back as 3300 BCE to the Indus Valley Civilization. Later, about 3000 years ago, “Indian traders engaged in re-exporting silk from China to Central Asia and trading horses from West Asia to China”. Traders and artisans created a burgeoning economy through the years, making India, along with China, the largest economy up until the start of the 18th century (Aiyar,2023). However, the colonial period saw a decline in indigenous industries and the emergence of a risk-averse culture (Goswami,2010). After gaining independence in 1947, India adopted a socialist model with a focus on state-led development. While this approach achieved some success in building core industries, it also stifled private enterprises and innovation, with rampant governmental corruption abound. Up until the economic liberalization of 1991, India was known as the License Raj, referring to India’s strict governmental regulation over the economy—businesses required permits and licenses. The economic liberalization of 1991 started creating new opportunities for entrepreneurs (Panagariya,2008). 3.2.2. Emerging Trends: A Dynamic Ecosystem In recent years, India’s entrepreneurial landscape has undergone a dramatic transformation. Several factors have contributed to this shift, as listed below: • Demographic Dividend: India has a young and growing population, with both skilled and unskilled labor. India is in a prime position to enjoy this demographic dividend if India can increase the participation of women in the labor force (Marois et al., 2022). This demographic dividend provides a significant advantage for entrepreneurs, offering a vast consumer market and a talented workforce (Bloom et al.,2010). • Technological Advancements: India is seeing a rapid deployment of technology, particularly in the IT and telecommunications sectors. This has fueled innovation and created new opportunities for entrepreneurs. As Srinivas (2021) points out, the rise of the internet and mobile technology has led to the emergence of a vibrant digital economy in India. • Policy Reforms: The government’s proactive policies, such as “Make in India”, “Startup India”, and “Digital India”, have awakened the innate entrepreneurial urges Adm. Sci. 2025,15, 122 7 of 20 of young Indians. These initiatives have focused on simplifying regulations, promoting investment, and fostering innovation, thus creating a fertile ground for entrepreneurial activity (Kumar,2018). • Growing Investment: India is attracting significant investment from both domestic and foreign sources. Surging venture capital and private equity investments provide crucial funding for startups and growth-stage companies (KPMG,2023). • Global Recognition: There are several Indian entrepreneurs who are gaining recognition on the global stage, as they have successfully expanded their businesses globally. As stated by Bala Subrahmanya (2022), even though only a very small percentage of startups have achieved the distinction of unicorn status, Indian startups have demonstrated the potential for innovation and scalability in the Indian ecosystem (CB Insights,2023). 3.3. Unleashing Potential: Challenges and Opportunities Despite the significant progress made in recent years, Indian entrepreneurship still faces several challenges: • Infrastructure Bottlenecks: India has made significant improvements to its national infrastructure, as stated earlier in this paper. However, there is still a long way to go. Inadequate infrastructure, particularly in transportation and logistics within towns or city centers, can hinder business operations and increase costs. • Bureaucratic Hurdles: Even though the present government has been making strides toward regulatory reforms, India is still a country with complex regulations and bureaucratic processes. Greasing the palm is still a way of life in government offices. These processes can create roadblocks for entrepreneurs, particularly for smalland medium-sized enterprises (SMEs). • Skill Gaps: While India has a large workforce, skill gaps persist in many sectors, including healthcare, construction, IT, semiconductor manufacturing, and banking, financial services, and insurance (BFSI). This can impact entrepreneurs. • Access to Finance: Despite many successful governmental initiatives to increase access to finance for entrepreneurs, access to finance remains a challenge for many entrepreneurs, particularly those in the early stages of their ventures. The challenge is even more serious for women entrepreneurs than men. • Excessively Competitive, Price-Sensitive Environment: India is a country with a priceconscious, cut-throat competitive marketplace. As a result, the failure rate of startups is relatively high. 3.4. The Way Forward: A Collaborative Approach It would be impossible to harness the power of Indian entrepreneurship in isolation; this requires an approach in which the government and the private sector work in conjunction with academia to achieve the following: • Strengthening Infrastructure: Investing in the creation of more transportation, logistics, and energy systems to achieve greater business efficiency and competitiveness. • Simplifying Regulations: Simplifying regulations and reducing bureaucratic hurdles to avoid overburdening entrepreneurs, which will enhance the ease of doing business. • Enhancing Skills: The promotion of education and skills development will prepare the workforce with a proper aptitude relevant to the needs of the ever-changing economy. • Access to Finance: Venture capital, angel investors, and government schemes can provide access to finance for entrepreneurs. Adm. Sci. 2025,15, 122 8 of 20 • Fostering Innovation: Innovation can be fostered by promoting research and development culture, incubation centers, and mentorship programs that will drive the creation of new ideas and technologies. These steps will liberate the entrepreneurial spirit in India and enable it to compete at the very top level of innovation and economic growth in the world. The following provides an overview of three theories that explain SME growth in India and their relationship to economic policies. These are the resource-based view of a firm, the global value chain, and innovation ecosystem theory, each of which have implications both for the country of India and its economic policy and the entrepreneurs themselves. The following section of this article describes the authors’ propositions based on these three theoretical frameworks and their links to government policies. 4. SME Growth in India: Propositions and Explanations The focus of this section is to provide a synthesis of management theory and government policy in a way that demonstrates their interaction and impact. Each review of a theory and its linkage to Indian economic policies, followed by the propositions, provides opportunities for future empirical research. 4.1. Resource-Based View The resource-based view (RBV) is a theoretical framework that emphasizes a firm’s or country’s internal resources and capabilities as key drivers of sustained competitive advantage (Barney,1991). The RBV argues that unique resources—tangible assets, intangible assets, and organizational capabilities—that are valuable, rare, inimitable, and non-substitutable create a basis for growth and competitive advantage (Barney,1991; Wernerfelt,1984). The RBV of a firm has implications for both firms and governments. Governments can promote local economic growth through policies that include direct support for multinational enterprises, as well as the provision of tax and trade incentives. Governments can increase foreign direct investment either through partnerships or firms entering the market (Guillen,2000;Deng et al.,2020). These policies become the grounds for unique resources and competitive advantage. The RBV holds that firm-specific resources that are hard to copy are the main determinants of an MNC’s sustainable bargaining position over time (Moon & Lado,2000). Positive-sum benefits can also be created through the development of co-specialized assets by both the MNC and the host government. For instance, an MNC can contribute a particular type of technology to a host country, and the host government can develop complementary industries (e.g., components) built around the technology (Liu & Li,2022). Through government policies, business partnerships can create strong industry linkages that promote innovation activities and business performance. By signing free trade agreements and through the formation of tax-free investment zones, governments can provide a foundation for businesses to improve their innovation capacity to meet product quality standards and pursue quality management systems (Cooke,2001). Truong et al. (2024) show that these agreements also play an important role in creating the conditions for exporting goods to other countries. Manufacturers must innovate to be able to export goods and improve business performance through expansion to international markets. Free trade agreements also create value supply chains from inputs to outputs. The government also assists by funding and encouraging new training disciplines to meet labor demand. In summary, the government has a crucial role in promoting innovative pursuits, facilitating rapid international business integration, and improving the global competitiveness of firms (Truong et al.,2024). Adm. Sci. 2025,15, 122 15 of 20 with propositions related to the governmental policies and the opportunities created for entrepreneurs based on the theory foundations. The rationale and the literature support for each proposition were detailed. The analysis has revealed a complex and evolving ecosystem, with government policies supporting entrepreneurial agility. The findings underscore the significant impact of geopolitical realignments on India’s entrepreneurial opportunities. Entrepreneurial activity across various sectors is enhanced by the diversification of supply chains away from China and the increasing strategic importance of the Indo-Pacific region (McKinsey Global Institute,2023;Pant,2022). A more conducive environment for innovation and business growth has been enhanced by domestic policy reforms, including “Make in India”, “Digital India”, and “Startup India” (Kumar,2018). Through the application of three theories—RBV, GVC, and innovation ecosystem theory—this paper has highlighted the critical role of formal and informal institutions in shaping entrepreneurial behavior and outcomes. The overall ease of doing business is impacted by the evolving regulatory landscape, government policies, and cultural norms that influence resource access and legitimacy. The importance of leveraging India’s unique resources, such as its vast talent pool, diverse consumer market, and burgeoning digital infrastructure to create and capture value is an integral component of the resource-based view (Barney,1991). The practical results are clear. Since the present political party came to office in 2014, India’s entrepreneurial ecosystem has seen a huge increase in the number of startups and unicorns—privately held startup companies valued at over USD 1 billion. NASSCOM (2022) reported that there are 27,000 startups, which makes India the third-largest startup ecosystem in the world. This growth can be attributed to three key factors: supportive government policies, increased funding opportunities, and rapid technological advancements. Among the government initiatives, the one that stands out most is the Startup India initiative of 2016. This program provided tax exemptions and relief in terms of compliance requirements, and established the Fund of Funds for Startups (FFS) of INR 100 billion (about USD 1.17) to support early-stage ventures (DPIIT,2022). Under the government’s Digital India Initiative (DII) of 2015, India has experienced expanding internet access and increased digital literacy, which in turn have supported a conducive environment for technology-based businesses (MeitY,2015). Another development that coincided with DII was the introduction of inexpensive mobile data by Reliance Jio in 2016. The increase in competition in the mobile data space boosted internet penetration to over 50% by 2021 (TRAI,2021). As a result, startups could turn their attention to the previously underserved markets of rural and semi-urban areas. Companies such as Byju’s (online education, established in 2011), Zomato, and Paytm jumped on these advancements to disrupt traditional industries (Kenney & Zysman,2016). India has also seen a great rise in venture capital and private equity funding. Total annual startup funding grew from USD 2.2 billion in 2014, as mentioned earlier, to over USD 36 billion in 2021. This is a clear indication that investors have become confident in India’s entrepreneurial ecosystem (Bain & Company,2022). Not just domestic, but also global investors (e.g., SoftBank and Sequoia Capital) have started pouring in funds, providing startups with ample resources to innovate and scale up their operations. In the last 10 years, there is evidence that startups are showing up in diverse focus areas. The e-commerce and fintech areas are still the darling of startups, but sectors like healthcare, education technology (edtech), and aggrotech are also attracting entrepreneurs’ attention. For instance, startups like DeHaat, which is a play on the Hindi word “dehat”— a remote village—are focused on deploying technology to address grassroot problems related to inefficiencies in the agricultural supply chain (NASSCOM,2022). Additionally, Adm. Sci. 2025,15, 122 16 of 20 startups in India are also utilizing artificial intelligence, blockchain, and robotics to create cutting-edge solutions (DPIIT,2022). There is ample evidence that the reforms under the present government have been effective to promote an entrepreneurial environment in India. This is evidenced in the World Bank rating of India: In the Global Competitiveness Index (GCI) 2015–16, India moved up from its earlier ranking of 71 out of a total of 144 countries to a ranking of 55. As of 2023, India was ranked as 39th in the world. 6. Conclusions The powerful and unravelling entrepreneurial ecosystem in India is shaped by geopolitical shifts, domestic policy reforms, and the strategic actions of entrepreneurs. By understanding these complex dynamics and by incorporating the insights offered by the resource-based view, global value chain theory, and innovation ecosystem theory, entrepreneurs, policymakers, and investors can contribute to India’s continued economic growth and its emergence as a global entrepreneurial powerhouse (Gereffi et al.,2005; North,1990;Barney,1991;Adner,2017). The journey ahead is filled with opportunities and challenges, but with strategic foresight and collaborative efforts, India’s entrepreneurial awakening can pave the way for a brighter and more prosperous future that would bring back the glory from India’s golden past. 7. Theoretical Contributions and Future Research Directions This paper contributes to the existing literature by integrating innovation ecosystem theory, global value chain theory, and the resource-based view to provide a comprehensive understanding of India’s entrepreneurial landscape. By examining the interplay of these theoretical perspectives, this study offers insights into how entrepreneurs can navigate the institutional environment and leverage resources to achieve sustainable competitive advantage. The propositions presented in this paper offer a roadmap for future research and can guide empirical investigations into the specific factors driving entrepreneurial success in India, as well as the interplay of government policy and entrepreneurial success. This article could lead to several future research studies. Importantly, this paper provides a nexus between governmental policy, entrepreneurial behavior, and management theory. Empirical investigations can test the propositions presented in the paper and explore the nuances of how geopolitical shifts and domestic policies impact entrepreneurial outcomes across different sectors and regions within India. Further, the role of informal institutions, such as social networks and cultural norms, in shaping entrepreneurial behavior and success may be explored more fully in further research. Comparative studies can also be conducted to examine how India’s entrepreneurial ecosystem differs from those in other emerging economies. Such studies can provide valuable insight into the unique factors driving India’s entrepreneurial revival and guide policy developments to further enhance the country’s entrepreneurial potential. Author Contributions: Conceptualization, R.S. and K.S.; methodology, R.S. and K.S.; validation, R.S., K.S., J.N., and F.S.; formal analysis, R.S. and K.S.; investigation, R.S. and F.S.; resources, J.N. and F.S.; writing—original draft preparation, R.S. and K.S.; writing—review and editing, F.S. and J.N.; visualization, R.S.; project administration, R.S. All authors have read and agreed to the published version of the manuscript. Funding: This research received no external funding. Institutional Review Board Statement: Not applicable. Informed Consent Statement: Not applicable. Adm. Sci. 2025,15, 122 17 of 20 Data Availability Statement: The data presented in this study are available upon request from the corresponding author. Conflicts of Interest: The authors declare no conflicts of interest. Abbreviations The following abbreviations are used in this manuscript: SME Small and Medium-sized Enterprise GPP Gross Domestic Product MNC Multinational Corporation DII Digital India Initiative GVC Global Value Chain RBV Resource-Based View References Adner, R. (2017). Ecosystem as structure: An actionable construct for strategy. Journal of Management,43(1), 39–58. [CrossRef] Adner, R., & Kapoor, R. (2010). Value creation in innovation ecosystems: How the structure of technological interdependence affects firm performance in new technology generations. Strategic Management Journal,31(3), 306–333. [CrossRef] Agrawal, A. 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