India's merchandise exports demonstrated remarkable resilience, jumping 13.8% to $43.56 billion in April 2026, despite facing significant supply chain disruptions. According to Business Standard, this export growth came amid ongoing conflict in West Asia following the joint attack by the US and Israel on Iran in February. The robust performance occurred despite merchandise imports also growing 10% to $71.94 billion in the first month of the financial year. However, India's trade deficit expanded to $28.38 billion in April from $27.10 billion a year ago, reflecting the impact of higher import costs on the trade balance.
The ASUSE 2025 report reveals significant disparities between rural and urban manufacturing productivity. GVA per worker for rural manufacturing units employing more than 20 workers was ₹1,24,000 in FY25, making it the lowest among all businesses employing four or more workers. In contrast, urban manufacturing units employing more than 20 workers achieved GVA per worker of ₹2,19,000 in FY25, which equaled the median GVA per worker of all urban manufacturing establishments surveyed. This disparity suggests that rural manufacturing faces more challenges in achieving economies of scale, with rural manufacturing establishments with more than 20 workers showing GVA not significantly higher than units employing fewer hands. The report defines unincorporated enterprises as establishments where assets and liabilities belong to the owners, with no separation between the entity's owner and the entity itself.
The survey reveals concerning trends in employment patterns across unincorporated manufacturing units. Manufacturing units employing 8, 14, 15, 18 and more than 20 workers showed GVA per worker declines from FY24 to FY25, with the worst decline of nearly 19% at manufacturing units employing over 20 workers. This trend is characterized as similar to disguised unemployment, where additional workers contribute almost zero value. Conversely, GVA per worker increased across all other categories of manufacturing enterprises, highlighting the specific challenges facing larger manufacturing units. The data from FY24 to FY25 shows a clear pattern where larger establishments struggle to maintain productivity levels as they scale up operations. The ASUSE data reveals that in 2025, there were nearly 8 crore non-agricultural small businesses in India employing more than 12 crore workers, with own-account enterprises accounting for 86.6% of all establishments and hired-worker enterprises forming just 13.4%.
The report reveals that compliance burdens after crossing the 10-worker threshold significantly impact productivity across different sectors. In manufacturing, productivity takes a hit after 10 workers, but recovers and peaks around 13 workers. In trade, GVA per worker peaks at the 9th worker and then drops more than 32% at 10 workers, with productivity not recovering beyond 20 workers. Services perform the worst, with productivity peaking as early as the 8th worker, dropping sharply at 10 workers, and falling again at 12 workers. The compliance burden includes Provident Fund registration, ESI requirements, labour records, inspections, and accounting burdens that businesses must comply with after crossing 10 workers. This suggests that while larger establishments may have better asset utilization, the regulatory compliance costs create a productivity bottleneck that limits growth potential.
The ASUSE data reveals that manufacturing units of sole proprietors generate only ₹72,000 of GVA per worker annually, which is almost half of a one-worker trading or service unit. The average HWE employs around five workers compared to the average OAE employing barely one person, with HWEs generating roughly ₹10 lakh in GVA annually compared to just ₹1.4 lakh for an OAE. The report shows that GVA per worker is largely used as a productivity measure, with HWEs achieving about ₹2.3 lakh compared with ₹1.16 lakh for OAEs. However, the data also indicates that productivity across the informal sector peaks at around 9 workers and does not return to that level even beyond the 20-worker mark, suggesting that many businesses struggle to maintain productivity as they scale beyond this threshold. The latest ASUSE data also shows that average daily earnings in India's unincorporated non-agricultural sector remained below the minimum-wage benchmark across manufacturing, trade and services.
