IIT Kharagpur Study Finds a 'Digital Exclusion Trap' Holding Back India's Women Entrepreneurs

Women-led small businesses in India grew by nearly 70% over the last year, but a new study from the Indian Institute of Technology (IIT) Kharagpur warns that many of these entrepreneurs are being held back by a 'digital exclusion trap' that keeps them from the technology a modern economy demands. The study, by researchers Ruchi Singh and Binita Tiwari, interviewed 48 women running micro, small and medium enterprises (MSMEs) — businesses ranging from apparel manufacturing to dairy farms — in Tier 2 and Tier 3 cities of Uttar Pradesh.

The researchers describe a self-reinforcing cycle: limited digital skills lead to a fear of technology, which then stops women from getting the hands-on practice needed to learn, leaving them further alienated from the digital marketplace. Using Human Capital Theory, which looks at the skills and confidence an individual holds, the study found many women lacked confidence navigating digital interfaces that are often complex and mostly in English, compounded by a fear of costly mistakes. One participant said she stopped using digital banking altogether after her account was hacked.

A second framework, the Theory of Gendered Organisations, points to the systems around women rather than the women themselves. The study found government training workshops often assumed a baseline of computer knowledge many participants did not have, and that women's 'second shift' of housework and childcare left them with too little time to learn new software or run an online store. Even women who owned smartphones often relied on husbands or children to carry out digital tasks for them, the study found, preventing them from becoming digitally independent.

The researchers caution that their findings, based on 48 women recruited through snowball sampling in one state, are a snapshot of a specific region rather than a rule for all of India. MSMEs contribute 33% of India's gross domestic product, and the study recommends training that is foundational, delivered in local languages, and designed to build self-belief alongside technical skills.