India’s largest cities are tightening their grip on entrepreneurship, with Kolkata, Surat and Greater Hyderabad accounting for more than 22% of all unincorporated business establishments across the country’s 46 million-plus cities, according to a new MoSPI report. The findings show that big urban centres are not only creating more businesses, but also generating more jobs, stronger incomes and better opportunities for women.
Big Cities Pull Ahead
The report suggests that million-plus cities offer a more favourable environment for enterprises to grow and hire. Around 24% of unincorporated establishments in these cities employ at least one hired worker, compared with 19% in other urban areas, indicating that businesses in larger cities are more likely to create jobs rather than remain owner-operated.
That advantage extends to earnings as well. Self-employed workers in million-plus cities earn more than those in smaller urban centres, while regular salaried employees and casual workers also report higher incomes. Lower unemployment levels in these cities further point to stronger labour market conditions and more resilient urban economies.
Women Join In
A notable trend in the report is the rise in female labour force participation in million-plus cities. Cities such as Surat, Vadodara and Pune have also emerged as important hubs for women-owned enterprises, signalling a gradual but meaningful shift toward more inclusive entrepreneurship.
This is significant because women-led enterprises often face steeper barriers to capital, markets and networks. The growing presence of such businesses in larger cities suggests that urban ecosystems with better infrastructure and stronger access to opportunity can help narrow those gaps.
Why Large Cities Win
The concentration of entrepreneurial activity in major cities is being driven by structural advantages. Better infrastructure, larger consumer markets, stronger access to finance, deeper supply chains and a wider pool of skilled talent all make it easier for businesses to scale in metros and million-plus cities.
But the report also shows a widening divide. While large urban centres continue to attract investment and enterprise creation, smaller cities still struggle with access to capital, infrastructure and market linkages, which can slow business growth and job creation.
Outlook
For policymakers, the message is clear: India’s biggest cities are proving what a strong urban ecosystem can do for entrepreneurship, but that success needs to be replicated elsewhere. If Tier-II and Tier-III cities are to contribute more meaningfully to the next phase of growth, they will need similar support systems.
Strengthening infrastructure, improving credit access, promoting digital adoption and supporting women-led enterprises could help spread entrepreneurial growth more evenly across the country. For India’s startup and SME ecosystem, the real challenge is not just building bigger cities, but building better conditions for business everywhere.