The master thesis “Empowerment of entrepreneurs: application of Amartya Sen’s capability approach to improve the livelihood of artisans in India” analyzes the country- and sector-specific framework conditions when it comes to entrepreneurship in the artisan sector in India. In addition, the explorative nature of this thesis provides a starting point to the analysis of artisans’ experienced life quality and identifies triggers that stimulate the same. This topic is academically and societally significant as previous research has shown that entrepreneurship is positively related to economic growth in developed economies. The relationship between entrepreneurial activity and economic growth in developing economies such as India, however, has not been analyzed sufficiently. Very recently, authors like Gries and Naudé (2011) as well as Serviere (2010) and Tipu (2012) have stressed the importance of the analysis of this relationship through micro-level research projects. This thesis aims to function as starting point for this new fied of research. Therefore, the present thesis first incorporates findings of the entrepreneurship literature into Amartya Sen’s framework of the capability approach. Next, these theoretical findings are tested with the help of explorative research that was conducted in India and involves the methodological principles of Appreciative Inquiry. The field research includes six expert interviews with academic as well as business professionals in a first interview wave and 15 interviews with rural as well as metropolitan artisans in a second wave of interviews. The fundamental finding of this thesis is that the entrepreneurs of the analyzed target group cannot be categorized as solely necessity- or opportunity-driven. Instead, the artisans combine typical character traits and attitudes of both. Based on this, a unique profile is developed for artisan entrepreneurs in India. Building on these findings, the present thesis contributes to a better understanding of the characteristics, motivations and problems that Indian artisan entrepreneurs face. These valuable insights allow the identification of potentials as well as prerequisites to develop a holistic and sustainable approach to empower artisans in India. The thesis reveals a great demand for further research and encourages more extensive research projects that analyze the relationship of entrepreneurial activity and experienced life quality as well as economic empowerment of artisans in India as well as indicators to stimulate the same.