The modal size of an Indian firm is 1 employee and the mean is just over 2. The mean number of employees in a US firm is closer to 20 but even though that is ten times the Indian number it obscures the real difference. The US has many small firms but what makes it different is that it also has large firms that employ lots of people. In fact, over half of all US workers are employed by the tiny minority (0.3%) of firms with over 500 employees.Quoting another source:
Most Indian ﬁrms start in the informal sector and never grow or, worse, diminish in size over time: according to a 2013 International Finance Corporation study comparing the size of thirty-ﬁve year-old ﬁrms in India, Mexico, and the United States with their size at start-up, in India the size had declined by a fourth, in Mexico the size had doubled, and in the United States the ﬁrms were ten times as large. That is deeply troubling. As ﬁrms age, they are expected to get larger and to employ more people. Since India’s experience is orthogonal to this expectation, something in the Indian business ecosystem is badly broken.