Click to Empower: Closing the Digital Gap for India’s Women Entrepreneurs

Closing the digital gender gap could unlock productivity, expand markets and generate employment across millions of women-led firms

Nov 19, 2025

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Soumi Bose: BITS Pilani-Hyderabad
Shreya Biswas: BITS Pilani-Hyderabad

SDG 5: Gender Equality | SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation and Infrastructure
Institutions: Ministry of Skill Development and Entrepreneurship | Ministry of Electronics and Information Technology

India has over eight million women-owned enterprises, yet most remain small, informal and low in productivity. That sits uneasily beside the country’s digital revolution of cheap data, widespread smartphones and a payments system studied worldwide. The paradox is clear: those who could gain most from technology are least connected. Closing that gap would not just advance inclusion, it could drive one of India’s next big growth spurts.

The Untapped Economic Power

Women-led businesses remain modest. They account for about one in five micro, small and medium enterprises (MSMEs) and employ around 25 million people - barely a tenth of MSME jobs. Yet the potential is striking.

Recent data from the Annual Survey of Unincorporated Sector Enterprises, combined with district-level figures on women’s internet use, show what could change if more women-led firms moved online. Companies with at least one female founder employ roughly three times as many women and generate about 10 percent higher revenue. Those that embrace digital tools produce and hire more still.

The social returns are equally powerful. Women reinvest earnings in education, nutrition and healthcare more than men, multiplying benefits across households and communities.

For governments focused on productivity and jobs, this is not a side note but a clear policy signal. Supporting women entrepreneurs is smart economics - and digital inclusion is the most direct route to it. The agenda fits naturally with India’s Skill India and the broader push for innovation and gender equity at work.

How Digital Tools Transform Women’s Businesses

Data makes the case; three levers show how digital tools change outcomes.

Expanding markets is the most visible gain. Many women-led firms still rely on local customers: a kiosk serving neighbours, a tailoring unit dependent on walk-ins. The internet breaks that geography. Through social media, e-commerce and messaging platforms, even the smallest business can reach new buyers and reduce dependence on footfall.

Finance is another. Banks demand collateral women rarely have; informal lenders charge steep rates. Digital payments and online records bridge that gap. Transaction trails build credibility, opening doors to formal credit and government schemes. QR codes and UPI transfers are not just convenient; they are gateways to finance and survival.

Digitalisation also drives formalisation. Women’s firms are more likely to be unregistered and outside the tax net. That keeps costs low but curbs growth and protection. As more businesses go online, they begin to register, keep books and tap official support – moving from subsistence to scale.

Together, these forces show how technology can change both opportunity and agency.

The Constraints

If the potential is so high, why are there still so few women entrepreneurs - and even fewer online? The reasons lie in a mix of norms, policy design and perception.

Cultural expectations remain the deepest fault line. Women carry a disproportionate share of care responsibilities, leaving little time for formal work or enterprise. Even when connected, their internet use often revolves around domestic or care needs, not business.

Policy design compounds the gap. India’s digital push has focused on coverage and cheap data, improving access but not ability. Four in five women report mobile-data availability yet struggle to use digital tools for business. Connectivity without capability delivers little change.

Confidence in digital transactions is another missing piece. Many women hesitate to transact online because of fears around digital payments, data theft or fraud. A single bad experience can destroy confidence, especially in smaller towns where trust in digital systems is fragile.

Finally, social dynamics matter. In many households, women’s entrepreneurial ambition is seen as encroaching on traditional male roles. Such resistance - sometimes subtle, sometimes overt - discourages women from pursuing or scaling business activity.

These constraints reinforce one another, limiting both participation and digital adoption.

Policy Choices

If the barriers are layered, so must be the response – combining empowering access, practical capability and social confidence.

Start with access that empowers. Broadband and mobile coverage remain essential but must be matched by digital literacy. Training should go beyond using a phone to using it profitably. Blended programmes covering financial and digital skills - from marketing to payments - work best. Partnerships with local business associations and women’s collectives can reach those outside formal training networks.

Build confidence through trust. Cybersecurity awareness, privacy rights and grievance redressal must become standard in all inclusion programmes. Workshops on digital safety can be as transformative as new infrastructure. India’s Cyber Surakshit Bharat and Digital Personal Data Protection Act lay the groundwork, but credibility will come only through visible enforcement and outreach.

Adapt policy to social reality. Childcare support, shared workspaces and flexible credit norms can make entrepreneurship compatible with family life. Local role models and peer networks help normalise women’s use of technology for business, easing resistance at home.

And involve men. Social attitudes will not shift through women-only initiatives. Public campaigns and training that include men - as co-workers, lenders, partners and family members - can reframe entrepreneurship as a shared goal rather than a challenge to male authority. Integrating men into digital literacy and credit-linked schemes ensures change takes root within households as much as in policy.

If these efforts align, the gains will spread far beyond women entrepreneurs. Every percentage point increase in women’s participation in enterprise - with an online presence - could add billions to GDP, yet much of that potential remains locked out of the digital economy.

A Timely Opportunity

India’s digital success is often told through start-ups and unicorns in Bengaluru or Gurgaon. That story is real but incomplete. The quieter, more pervasive story is of women in Bhagalpur, Nagaland or Madurai using smartphones to sell saris, food or crafts well beyond their neighbourhoods. These may never attract venture capital, yet they sustain families, create jobs and keep local economies alive.

Helping these entrepreneurs cross the digital threshold is one of the smartest growth strategies India can pursue. The true measure of the digital revolution will be whether it empowers women entrepreneurs as much as start-ups. That is where India’s digital future will be decided.