Business Opportunities in Rural India – [Faculty Series :: Amity Gurgaon]

Praveen Kr. Sharma, Amity Business School, Gurgaon

Rural India with its traditional perceptions has grown up over the years, not only in terms of income, but also in terms of thinking. The rural markets are growing at about two time faster pace than urban markets, not surprisingly, rural India accounts for 60 per cent of the total national demand.

According to a survey conducted by Mckinsey, rural India population would become bigger than total consumer market in countries such as South Korea or Canada in another 15 years and it will grow at least four times from its existing size.

Gone are the days when rural consumer went to nearby city to buy ‘branded products and services’. The rural consumer is growing and this is an opportunity to grab the market share for all the global players in the market.


Economic development in the rural areas has given rise to innumerable business opportunities. It is up to the initiative of the rural population especially the women to tap these opportunities and to turn them into income generating ventures. The government, on the other hand, through its departments and agencies is currently encouraging as many people as possible to participate in business in the rural areas so that they can increase their income levels. The ultimate aim of increasing the level of income of the rural population is to narrow the income disparity level between the rural and urban population.

In a broad sense, economic development can be defined as an activity that assist in the inducement of commercial as well as social endeavors. The process of economic development involves and facilitates activities that stimulate a self-sustaining process of economic development, create jobs at acceptable wages and benefits, and produce goods and services that meet social needs such as affordable housing, greater community control, and broader asset ownership.

The role of government and Non-government agencies became more effective under cluster development approach in rural areas. Small- scale entrepreneurship clusters are now being developed like filigree, machinery parts like auto bulb, auto parts, woodcarving, stone carving, appliqué, leather foot wear, artistic mat, batic print, toys, betel nut craft, brass and bell metal, cane and bamboo works, clay toy and idols, coir craft, dhokra casting, durry and carpet, golden grass crafts, horn works, jute craft, lac work, natural fiber products, paddy craft, palm leaf decoratives, paper making, patta and tasar painting, sabai grass craft, sea shell, solapith work, terracotta, tribal jewellery, woolen carpet, designer dress and many others. 

Major Business Opportunities in Rural Area: 

Agriculture and Agro-Based Sector: 

Manufacturing and Engineering Industry

Chemical based Industry


Consumer Durable

The Restaurant and Catering Business

Retailing Business 

Cleaning and Laundry Services

Health Care and Beauty Treatment Salon 

Tailoring Services

Transportation and Distribution Services

Cold Room and Refrigeration Services






State Bank of India, the country’s largest bank, recently announced that it would shift its focus to Rural India to boost the retail portfolio. According to its Chairman, there is business opportunity in rural India. Similarly, ICICI Lombard plans to market weather insurance in the rural areas. 

Urban-oriented banks and financial institutions see business prospects in shifting focus to the rural sector. They had not given this market much attention hitherto. A large pool of high net worth individuals, traders, entrepreneurs, processing industries, marketing and warehousing agencies, market intermediaries, professionals, educational institutions, plantations and so on provides a wide range of business avenues and market for these institutions to diversify the risks and also seeks growth. 

The development of the telecom infrastructure in the rural areas has made doing business easy. Marketing intermediaries and loan recovery agents have brought down the cost of operations. Recent studies indicate that the actual level of non-performing assets (NPAs) in the rural sector is less than elsewhere, and this coupled with the low cost of operations, less expensive labour, infrastructure, cost of living, and so on make Rural India an attractive market. 

With India entering the globalisation mode and the rural revolution being governed by rising purchasing power, increased savings, changing consumer habits, there are sure and positive signs that a new dawn of rural India is going to come.

Success, however, depends on using the right strategies and the ability to foresee the growth of this sector. Many economists and policy-makers increasingly believe that future growth of the domestic economy to a large extent will depend on the robust performance of the agriculture and rural sector. The manufacturing and service sectors cannot sustain the economy’s growth if the rural sector underperforms. 

By Praveen Kr Sharma, Faculty Member, Amity Business School, Amity University Haryana, Gurgaon.