Walk through the narrow lanes of Crawford Market or the crowded footpaths outside Dadar station, and you will find some of Mumbai’s sharpest business minds at work. They don’t sit in boardrooms, nor do they rely on polished presentations or expensive software. Instead, armed with a pushcart, a small stock of goods, and an indomitable spirit, they run enterprises that are complex, agile, and relentlessly customer-driven.
Calling them “vendors” grossly understates their role. These are street entrepreneurs, individuals running dynamic micro-businesses that require the same strategic thinking, financial discipline, and market intelligence that global corporations spend millions trying to perfect. Yet, ironically, while these entrepreneurs are visible on every corner, India’s business schools continue to pore over Western case studies, rarely acknowledging the homegrown expertise thriving right outside their campuses.
The Numbers Behind the Enterprise
Street vending is not a side activity; it is a crucial part of India’s urban economy. Nationwide, over six million people earn their livelihood from vending, contributing more than 4% of urban non-agricultural employment. In Mumbai alone, estimates suggest anywhere between 2.5 to 3 lakh street entrepreneurs operate daily, though precise data is elusive because of the informal nature of their work.
Their economic footprint is far from trivial. Conservative estimates indicate that Mumbai’s street entrepreneurs generate over ₹15,000 crore annually. This isn’t limited to direct sales. Their activities ripple through supply chains, benefiting wholesalers, transporters, food processors, and even daily wage laborers. In many ways, they are the city’s invisible engines of growth, absorbing labor, sustaining communities, and circulating wealth at the grassroots level without the need for subsidies or sprawling infrastructure.
But behind the ingenuity lies a harsher truth.
Street entrepreneurs face systemic harassment and corruption on a daily basis. Most pay hafta, small but regular bribes ranging from ₹50 to ₹500, to survive in contested urban spaces. For someone earning just ₹300–500 a day, these payments eat into already razor-thin margins.
Paradoxically, this shadow system acts as an informal regulatory mechanism. By paying regularly, vendors secure a degree of operational stability. This is not to justify corruption, but rather to highlight how entrepreneurs adapt, creating survival models even in broken governance systems. Their ability to function within such uncertainty demonstrates resilience and tactical problem-solving, qualities management institutes often preach but rarely contextualize.
Supply Chain Wizards Without the Jargon
Consider Rajesh, a fruit seller outside Bandra station. His day begins at 3 a.m. at Dadar’s wholesale market. He negotiates with suppliers, evaluates quality, balances credit, and calculates his margins, all before sunrise. By noon, his inventory has already been partially replenished, because he intuitively understands consumer demand patterns: bananas for early office-goers, sugarcane juice for commuters in the afternoon heat.
Without ERP software or predictive analytics, Rajesh runs a finely tuned operation. His logistics network ensures freshness, minimizes wastage, and maximizes efficiency. In effect, he solves last-mile delivery challenges that formal retail chains and e-commerce giants are still struggling to master, using nothing but relationships, observation, and agility.
Street entrepreneurs are also adept financial managers. Many operate on daily credit cycles purchasing goods in the morning and settling accounts by evening. They extend and receive informal credit, often relying on trust and social reputation rather than legal contracts. In practice, this creates peer-to-peer financial systems that rival microfinance models. Entrepreneurs lend to each other, pool resources for bulk buying, and collectively manage risks during downturns. Their understanding of working capital, liquidity, and risk diversification is intuitive but profound. They rotate stock multiple times a week, optimize cash conversion cycles, and ensure margins that would impress even organized retail.
What makes these enterprises even more remarkable is their role in community life. Street entrepreneurs provide affordable access to food, clothing, and everyday goods for millions who cannot afford formal retail prices. They know their customers personally: when they get paid, what they prefer, what they can afford on a tough day.
This hyper-local customer intimacy is a form of relationship marketing that CRM systems try to simulate. It is built not on algorithms, but on trust, memory, and human connection. In a society where formal markets often exclude the poor, street entrepreneurs bridge the gap by providing dignity through affordability.
Why Business Schools Must Pay Attention
Despite their significance, business schools remain fixated on Silicon Valley models. Students dissect Amazon’s supply chain but rarely analyze the vegetable vendor delivering fresh produce to their campus gate. They study Uber’s “platform economy” but overlook auto-rickshaw drivers who have informally practiced demand-based ride-sharing for decades.
This neglect creates blind spots. Students graduate assuming that entrepreneurship requires venture capital, advanced technology, and a polished pitch deck. They miss the core truth: entrepreneurship is about creating value with limited resources, something street entrepreneurs excel at.
Integrating street entrepreneurship into business education would transform learning. Imagine MBA students conducting fieldwork with vendors, analyzing inventory patterns, building simple financial tools, or studying hyper-local marketing strategies. Such interactions would ground theory in lived practice, reshaping entrepreneurship education to be less about jargon and more about adaptability.
Some progressive institutions have begun experimenting with this approach. Students shadow street entrepreneurs, offering business “health checks,” helping with bookkeeping, or co-developing low-cost digital tools. These collaborations blur the hierarchy between formal and informal sectors, creating mutual learning opportunities. Entrepreneurs benefit from structured insights, while students gain exposure to real-world complexity that textbooks cannot capture.
The uncomfortable truth is that many street entrepreneurs already outperform MBAs when it comes to decision-making under pressure. They intuitively grasp concepts like market segmentation, competitive advantage, and lean operations, without ever hearing those terms. What they lack is formal recognition, not business acumen.
For corporations, this also presents an avenue for meaningful CSR. Instead of symbolic donations, companies can invest in skill-building workshops, simple digital tools for inventory and payment management, or market linkages that help vendors access better margins. Supporting this ecosystem strengthens livelihoods while enhancing urban resilience.
The Angle of Economics
Street entrepreneurship and the informal economy show us the clearest expression of what Ludwig von Mises meant when he spoke of human action. These businesses remind us that trade, innovation, and value don’t always come from big corporations or government policies, they often grow naturally from people trying to meet each other’s needs.
Mises said, “Human action is purposeful behavior.” Every street entrepreneur proves this daily. A fruit seller who sets up his cart, a mechanic working from a small garage, or a tutor teaching students at home, they are all making choices, solving problems, and responding to what people actually want. They stay in business only if they serve customers better than anyone else. In that sense, they embody what Mises called the sovereignty of the consumer: the idea that the buyer, not the government or the businessman, decides who succeeds.
Economists like F.A. Hayek pointed out that no planner can ever know as much as the market itself. Prices in a marketplace carry signals about scarcity, demand, and opportunity. Street entrepreneurs work with these signals instinctively. They don’t have analytics dashboards, yet they react quickly to weather changes, shifts in foot traffic, or customer habits. Israel Kirzner called this the entrepreneurial discovery process, spotting opportunities that others miss and creating value from them.
Critics often look down on informal businesses, calling them illegal or disorganized. But in truth, these entrepreneurs fill critical gaps. They offer affordable goods and services to people who might otherwise be ignored. They provide jobs where formal industries fail. As Murray Rothbard put it, markets are about cooperation. On the streets of Mumbai, or anywhere else, you see that cooperation in action every day.
Why, then, do so many businesses remain informal? It’s not because entrepreneurs prefer it that way. It’s because government barriers make formality costly. Complicated licenses, high taxes, and endless paperwork often protect established interests rather than consumers. A food vendor without permits is not necessarily a lawbreaker in spirit, he is often someone who refuses to be strangled by red tape. Mises warned about this kind of interventionism: state interference that blocks natural economic activity.
Hernando de Soto’s work, The Mystery of Capital, shows how regulation traps the poor. Without property rights or easy ways to register businesses, their assets remain what he calls “dead capital”, valuable, but invisible to formal systems like banks. The problem is not that informal businesses exist, but that the system locks them out.
When you walk through a busy street market, you see Mises’ idea of catallaxy, order created by countless voluntary exchanges. There is no central manager telling vendors what to sell or how to price. Trust, reputation, and daily transactions regulate the system more effectively than any bureaucracy.
This is where the libertarian insight becomes clear: formal and informal economies are not separate worlds. They are part of the same market process. Milton Friedman once said that freedom to choose is at the heart of prosperity. Street entrepreneurs embody this freedom. They show that people will always find ways to trade, cooperate, and build livelihoods, even when institutions don’t support them.
Instead of seeing informality as a “problem,” we should see it as proof of human creativity under pressure. These entrepreneurs demonstrate that markets work best when people are free. Whether it’s Wall Street or a street corner, the principle is the same: prosperity grows from voluntary exchange, not from top-down control.
Street entrepreneurs remind us of a timeless truth. Human action, people making purposeful choices in response to scarcity and opportunity, is the foundation of all economic progress. Their resilience proves the Austrian school’s core belief: freedom and prosperity go hand in hand.
What’s Ahead?
Mumbai’s street entrepreneurs are running what may be the world’s largest open-air business school. Every day, they conduct millions of live experiments in pricing, logistics, marketing, and finance. They represent ingenuity, resilience, and customer-centricity in its purest form.
The tragedy is that business education in India still looks westward for inspiration, while ignoring the wisdom flourishing on its own streets. It is time to dismantle this artificial divide. Business schools must walk out of their air-conditioned classrooms and embrace the chaotic, messy, yet profoundly innovative world of street entrepreneurship.
The future of Indian entrepreneurship will not be built by imitating Silicon Valley, but by recognizing and amplifying the indigenous business wisdom that already sustains millions.
References
-
International Growth Centre (2024). Understanding market interactions in street vending in Delhi. Retrieved from https://www.theigc.org/blogs/understanding-market-interactions-street-vending-delhi
-
Observer Research Foundation (2023). Strengthening urban India’s informal economy: The case of street vending. Retrieved from https://www.orfonline.org/research/strengthening-urban-india-s-informal-economy-the-case-of-street-vending
-
WIEGO (2024). Working life of street vendors in Mumbai: The Indian Journal of Labour Economics. Retrieved from https://www.wiego.org/research-library-publications/working-life-street-vendors-mumbaithe-indian-journal-labour-economics
-
WIEGO (2025). Street vendors and market traders: An explainer. Retrieved from https://www.wiego.org/informal-economy/occupational-groups/street-vendors-and-market-traders
-
Alesina, A., & Spolaore, E. (2005). The size of nations. MIT Press.
-
Bhagwati, J. (2002). Free trade today. Princeton University Press.
-
Bown, C. P., & Irwin, D. A. (2019). The GATT and the WTO: A brief history. In Handbook of Commercial Policy (Vol. 1, pp. 3–110). Elsevier.
-
Buiter, W. H. (2022). Geoeconomics and decoupling: Risks of a fragmented world. World Economics, 23(3), 45–62.
-
Mises, L. von. (1949/1998). Human action: A treatise on economics. Ludwig von Mises Institute.
-
Panagariya, A. (2019). Free trade and prosperity: How openness helps developing countries grow richer and combat poverty. Oxford University Press.
-
Rodrik, D. (2011). The globalization paradox: Democracy and the future of the world economy. W. W. Norton & Company.
-
Wolf, M. (2004). Why globalization works. Yale University Press.
-
World Trade Organization. (2022). World trade statistical review 2022. Retrieved from https://www.wto.org
-
World Bank. (2023). Global economic prospects, June 2023. World Bank Publications.
Dr. Jaimine Vaishnav is a faculty of geopolitics and world economy and other liberal arts subjects, a researcher with publications in SCI and ABDC journals, and an author of 6 books specializing in informal economies, mass media, and street entrepreneurship. With over a decade of experience as an academic and options trader, he is keen on bridging the grassroots business practices with global economic thought. His work emphasizes resilience, innovation, and human action in everyday human life. He can be contacted on jaiminism@hotmail.co.in for further communication.