AI could prove to be one of the most transformative technologies driving growth for India’s micro, small, and medium enterprises (MSMEs). To empower MSMEs to further leverage AI, a white paper was launched in collaboration with the National Association of Software and Service Companies (nasscom), an Indian non-governmental apex trade association for the technology industry.

The findings highlight both opportunities and challenges faced by tech-enabled MSMEs in adopting AI in their business operations. Sandhya Devanathan, Vice President (India) at Meta, stated, “As the backbone of the Indian economy, empowering MSMEs with cutting-edge business solutions is pivotal for the growth of the country. With its massive developer base and the third-largest startup ecosystem in the world, India is going to be a driving force in the global AI revolution. Meta has been committed to creating an ecosystem for MSMEs to thrive, and our joint efforts with nasscom focus on equipping MSMEs with the necessary tools and knowledge to unlock the full potential of AI.”

Aimed at promoting AI awareness and capacity building among MSMEs, an ‘AI Enablement for MSMEs’ program was launched earlier this year with nasscom. The program took place across five cities—Gurugram, Bangalore, Pune, Mumbai, and Hyderabad—and saw more than 300 MSMEs attend. Based on their inputs, a comprehensive sentiment analysis was conducted to assess their awareness level and approach toward AI technologies.

The analysis revealed that 94% of tech-enabled MSMEs believe in AI's potential to drive business growth while 87% are confident it can improve overall productivity. Sangeeta Gupta, Senior Vice President and Chief Strategy Officer at nasscom said: “MSMEs are pivotal to India’s economic engine... Integrating AI offers them a unique chance for unprecedented growth."

Primus Partners served as the knowledge partner for the white paper. CEO Nilaya Varma noted: “We were amazed... However... lack of awareness of tools and resources...was identified as a major challenge by 65% of these businesses.”

Key insights from the white paper titled ‘Empowering India’s Growth: Unlocking AI’s Potential for Tech-Enabled MSMEs’ include:

1. Belief in AI: Strong belief among tech-enabled MSMEs where 94% acknowledge its ability to drive business growth.

2. Business Growth: 48% support AI's potential in content creation/marketing; 46% in customer engagement; 68% in new products/services development.

3. Awareness Gap: 65% struggle due to limited awareness about available tools/resources.

4. Need for Skilling: 72% emphasize necessity for training programs; 91% advocate democratizing access to AI technologies.

5. Financial Constraints: Budgetary limitations hinder adoption with 59% citing financial barriers.

6. Real Examples Needed: Nearly half (45%) seek tailored use cases demonstrating benefits.

To address these challenges, recommendations include creating hyperlocal accelerator programs for tech-enabled MSMEs and providing financial support such as grants/subsidies for technical training.

The full report can be found here.