What do people do if they don’t succeed?
Other opportunities do exist but mostly it means being dependent on your parents (to get more education) and they are not going to be very nice and always going to call you out how you have failed them. Sometimes, you might even have PhD from lowly ranked institution and you don't get job. There are simply so many institutes offering degrees where you pay per semester $5000 (obvious way to find it through loans from family and friends or bank loan) and might end up with a degree getting you either no job or stuck for years in $400 job.
If you are well off, you may become part of your Dad's business in which case it's not a big deal or your dad may use his contacts to install you in some company.
But if you've no connections, no money and you bid everything on this education, you might be left win nothing at the end.
Internal demand is very less in India so even if you try to do something else, like small time manufacturing or owning a shop (it's bloody battle). Often the ones who have actual shops are sort of mafia types who won't bat an eye to burn your shop or murder you outright this comes after you manage to convince anyone about giving you money for bootstrapping (which is also very rare)
If you are small time business owner in India, either you've very good connections or you use muscle force to stay in business and demand for whatever you produce or sell might simply not be there.
These are my observation as a foreigner in India.
Maybe in South India it's different but i am in North India.
This is a bit of fanciful exaggeration. There are a lot of small shopkeepers in India. There is no reason to believe they've been stabbing and shooting their competition.
Have you ever owned a non IT business? I am in India and my friends who have successful shops received death threats many times. One even sold his hotel because his son was getting kidnapped all time.
When I say 'small shopkeepers', I don't mean people who are rich enough to own hotels. I mean mom and pop grocery shops or the neighbourhood tea stall.
But these are not the kind of small businesses I was talking about.