How India’s MSMEs Are Embracing Tech and What’s Holding Them Back

On World MSME Day 2025, India’s small businesses show rising digital adoption, but face barriers in integration, skills, and access to strategic support.

- By Shrikanth G

Recognising the vital role of Micro, Small, and Medium Enterprises (MSMEs) in global economies, the United Nations designated June 27 as International MSME Day. This year, the Ministry of MSME is observing the day under the theme “Enhancing the Role of MSMEs as Drivers of Sustainable Growth and Innovation.”

According to a data from PIB, Micro, Small and Medium Enterprises (MSMEs) form the backbone of both the Indian and global economy. In India, they are a key pillar of growth; contributing around 30% to the GDP and over 45% to the country’s exports. By fostering entrepreneurship, generating employment and promoting inclusive development, MSMEs continue to drive economic transformation at the grassroots level.

Globally, MSMEs represent the most dominant segment of the business ecosystem, accounting for nearly 90% of enterprises and over 50% of total employment. In India, they hold a similar significance, emerging as the second-largest employer after agriculture.

Against this backdrop, new study by CyberMedia Research (CMR) also presents a timely sense check on India’s MSME sector. According to the study, 67% of Indian MSMEs are now digitally equipped, signalling a significant shift in how small businesses are leveraging technology to grow. These businesses are increasingly using digital tools like ERP, CRM, cloud computing, and even advanced technologies such as AI, IoT, and data analytics to modernise their operations.

DIGITAL TRANSFORMATION GAINING TRACTION IN MSMES

CMR’s nationwide survey, which covered over 400 MSMEs across IT, manufacturing, education, and retail sectors, found that one in three MSMEs reported tangible improvements in business growth and operational efficiency due to digital adoption.