An Introduction to India: The Economy, Financial System, SMEs and Venture Capital

We do not attempt to offer a comprehensive social and economic history of one of the most complex nations on earth. The aim is to give a flavour of key economic and social developments, in order that the reader can place our research findings in context. This chapter starts with a brief introduction to the Indian economy, and it highlights current strengths and weaknesses that influence the nation’s ambitions to become a fully-fledged industrial power. Attention then turns to the financial system, with explicit focus on the financial institutions that support SMEs, before considering the role and development of the SME sector within the economy; Government support for smaller enterprises is identified as an area of concern. The chapter concludes with an assessment of the history, current status and prospects of the VC and private equity industry in India.