Majority by Count, Minority by Scale: Women’s Informal Manufacturing Enterprises in India

CEDA’s earlier analysis of the Annual Survey of Unincorporated Sector Enterprises (ASUSE) found that women account for 58.4 percent of enterprise owners in India’s informal manufacturing sector in 2023-24. At first glance, this appears to challenge conventional narratives of manufacturing as a predominantly male domain, suggesting that women hold a majority share of ownership in a sector comprising 2.02 crore enterprises. Yet this headline figure offers only a partial picture. While a previous CEDA analysis documented the sectoral and operational profile of India’s informal manufacturing sector, aggregate ownership shares reveal little about the nature, scale, or economic conditions of women’s enterprises.

Drawing on the ASUSE 2023-24, conducted by the National Sample Survey Office (NSSO) under the Ministry of Statistics and Programme Implementation (MoSPI), this article examines the characteristics of female-owned enterprises in informal manufacturing. It explores how they are distributed across sector, division, establishment type, locations of operation, as well as their access to banking services.

Women predominate in informal manufacturing ownership across India, with a narrower gap in urban areas

Figure 1 shows that women account for a higher share of manufacturing enterprise owners than men in both rural and urban areas. However, the magnitude varies between the two sectors. In rural areas, women account for 63.4 percent of informal manufacturing enterprise proprietors, a 26.8 percentage point lead over men. In urban areas, women retain a smaller lead, owning 51.6 percent of enterprises compared to 48.4 percent owned by men.

Women hold the majority share in only four manufacturing industries

ASUSE classifies enterprises according to the National Industrial Classification (NIC) 2008, India’s standard five-level hierarchical framework for categorising economic activities. Each enterprise is assigned an NIC code based on its principal activity. This analysis draws on two levels of the NIC 2008 hierarchy available in ASUSE: divisions (broad industry groups) and sub-classes (specific economic activities)

While women account for a majority of enterprise owners in the manufacturing sector overall, Figure 2 shows that they are concentrated in a limited set of industries. Women hold the majority share in only four industries: tobacco products (95.2 percent), wearing apparel (78.1 percent), textiles (64.9 percent), and other manufacturing (57.6 percent). Ownership is nearly evenly split in the paper products industry, where 49.8 percent of the enterprises are female-owned. In contrast, men hold the majority in a much wider range of manufacturing industries, with ownership shares exceeding 90 percent in printing, machinery, fabricated metals, motor vehicles, basic metals, furniture, repair and installation, and other transport equipment.

Nearly all female-owned enterprises in the tobacco products and wearing apparel industries are engaged in bidi manufacturing and custom tailoring, respectively

Even within the manufacturing industries where women hold a majority of enterprise ownership (Figure 2), female-owned enterprises are often concentrated in a single sub-class (specific economic activity). Figure 3 shows that bidi manufacturing accounts for 98.8 percent of female-owned enterprises in the tobacco products industry, while custom tailoring accounts for 98 percent in the wearing apparel industry

Both activities are characterised by low capital requirements and production arrangements that can be undertaken on a small scale, often within the household or in close proximity to it. These characteristics may make these activities more accessible for women, who often face constraints related to mobility, limited access to credit, and time constraints associated with unpaid care responsibilities.

Women own nearly two-thirds of own-account informal manufacturing enterprises, while hired-worker enterprises are largely owned by men

ASUSE classifies enterprises into two establishment types: Own-Account Establishments (OAEs) and Hired Worker Establishments (HWEs). OAEs are operated by the owner and rely on the labour of the owner and/or unpaid family members, whereas HWEs employ at least one hired worker on a regular basis.

Figure 4 shows that female-owned enterprises account for 65.5 percent of own-account enterprises, nearly twice the share of male-owned enterprises (34.5 percent). In contrast, ownership of hired-worker enterprises is overwhelmingly male-dominated: men account for 93.7 percent of these enterprises, nearly fifteen times the share owned by women (6.3 percent). This reflects women’s concentration in self-employment and signals constraints on enterprise expansion, hiring, and access to capital.

Household premises are the predominant location of operation for female-owned informal manufacturing enterprises

ASUSE classifies enterprises by location of operation, distinguishing between those operating from household premises and those operating outside the household. Enterprises operating outside the household may function from fixed premises with permanent or temporary structures, from fixed premises without a structure, in mobile markets, or without any fixed premises, such as street vending.

Figure 5 shows that 94.3 percent of female-owned informal manufacturing enterprises operate from household premises, compared with 42 percent of male-owned enterprises. By contrast, nearly half of male-owned informal manufacturing enterprises (49.5 percent) operate from fixed premises with a permanent structure, more than ten times the share of female-owned enterprises (4.8 percent).

Female-owned informal manufacturing enterprises lag behind in banking access

Figure 6 shows that 72.2 percent of male-owned informal manufacturing enterprises in rural areas have a bank account, compared to 59.3 percent of female-owned enterprises. The gap widens in urban areas, where the corresponding figures are 82.1 percent and 58.9 percent, respectively.

The finding that women own a majority of informal manufacturing enterprises in India should therefore be interpreted with caution. The headline figure masks their concentration in self-employed, home-based activities with low entry barriers and limited capital requirements. Without this context, the numerical majority can overstate the extent of women’s economic advancement and understate the policy support needed for scaling, formalisation, and better access to credit, markets, and infrastructure.