India’s 30% GDP and 110 million employment-generating micro, small, and medium enterprises (MSMEs) are the backbone of the economy. However, with rising global competition, most of them are finding it difficult to keep up.
The use of digital tools is no longer a choice but a must for MSMEs to remain competitive, increase efficiency, and access new markets, experts opine.
Digital technologies—such as cloud software, online marketplaces, and automation—simplify operations and save money. For example, a textile MSME in Bhiwandi that used inventory management software cut errors by 25% and saved lakhs every year.
Software such as Tally for accounting or Zoho CRM for customer relationship management make it easier to manage tasks, allowing owners to focus on expansion. In 2024, digitally empowered MSMEs expanded 20% faster than offline counterparts, according to a Ficci report.
Access to global markets is another benefit. Websites like Amazon and IndiaMART provide access to international buyers for MSMEs.
A handicraft company based in Jaipur increased sales threefold by selling on Etsy, accessing US and European markets. The Trade Connect ePlatform, introduced in 2024, further connects exporters with global value chains, enabling MSMEs in clusters like Rajpura to compete.
Cost is a hurdle, with 60% of MSMEs citing high software expenses. Many lack digital skills—only 10% of owners are tech-proficient, per a 2023 survey. Resistance to change also slows adoption, as traditional businesses fear disruption. Cybersecurity risks, with 43% of MSMEs facing data breaches in 2024, add concerns.
Government programs mitigate these difficulties. The Digital MSME Scheme provides cloud and IoT tool subsidies, while the Credit Linked Capital Subsidy Scheme subsidizes 15% of technology upgrade expenditures.
Free training by Skill India teaches owners to use digital marketing and software. Industry plans, such as Nasscom’s startup initiatives, offer low-cost technology solutions. MSMEs can begin with free tools such as Google Workspace or inexpensive apps and expand as profits increase.
Cooperation is also a help. MSMEs in clusters such as Aurangabad share digital infrastructure at half the cost. Membership of industry associations such as CII gets companies connected with tech vendors providing discounts. Basic antivirus software and training can take care of cybersecurity, minimizing risks.
The risk is high. Digital tool-adopting MSMEs see productivity jump 15-20%, according to Invest India. With the manufacturing sector in India targeting USD 1 trillion by 2025-26, technology-enabled MSMEs will dominate the electronics and textiles sectors. Non-adopters may lose market share to Vietnamese or Bangladeshi competitors.\
“Digital is the future,” affirmed Rohan Gupta, the owner of an MSME based in Ludhiana, who digitized his auto parts company. “It saved us time and opened new markets.” MSMEs’ acceptance of digital tools is the key to success in a global economy. Check msme.gov.in for information or reach out to Ficci for technical support.