Over 57% of India's MSMEs Embrace AI as Core Tool, 25% Already Deploying AI Solutions

Vodafone Idea Business Study Predicts AI Revolution for MSMEs

With the rapid expansion of AI dominance across the world, India is emerging as the "global destination" for AI adoption and a data center hub. To cope with this speed of evolution, India's Micro, Small, and Medium Enterprises (MSMEs), which are also considered the "Backbone of India," are accelerating to adapt to the new AI world. A recent publication shared by the VI Business MSME Growth Insights Study 2026 surveyed to examine the current AI stance of the MSMEs. * Make Telecom Talk My Trusted Source Vi Business ReadyForNext Report: AI Set to Transform India's MSME Sector The VI Business MSME Growth Insights Study 2026 published a report showing the AI adoption among the MSME companies, where around 2.5 lakh small and medium businesses spread across 26 sectors were evaluated. As per the report, 57% of enterprises/businesses see AI as a "core tool" which can help in enhancing their overall operations on day to day and help in taking their business to different heights. Around 25% of enterprises have already started using AI and integrated an AI system into their workflows to help in day-to-day operations efficiency, including automating customer service, predicting demand, or optimizing logistics. Also Read: Rising Prices Could Lower Consumption for Tech Brands The report also shares insights on India's Digital Maturity Index, which is a parameter to measure how effectively MSMEs use digital technologies to drive value, efficiency, and growth. As per the survey, the Digital Maturity Index has climbed to 60.8, which is around 2.8 points jump from 50.0 points in 2025.

Over 57% of MSMEs view AI as a Vital Scale Driver; 25% Already Deploy AI Tools

Contrary to popular belief, AI adoption among MSMEs is lagging behind others and in some cases companies have accepted AI as a growth driver India's mammoth MSME sector, which contributes over a third of the country's GDP, has emerged as a key driver of AI adoption, a new survey reveals. More than 57% of small and medium enterprises surveyed view AI as a core tool for enhancing and accelerating business growth while 25% of them have integrated it into their business operations. The VI Business MSME Growth Insights Study 2026 identifies three technology vectors that will shape the next phase of MSME scale - AI to drive productivity and decision-making, SaaS-led workplace collaboration to enable scalable operations, and cybersecurity to build trust, resilience and business continuity. The study maps insights from the VI Business' "Ready for Next" platform that engages with over 2.5 lakh MSMEs across 16 sectors in the country. This year, the Digital Maturity Index (DMI) increased to 60.8, up from 58.0 in 2025 and 55.9 in 2023. The study also noted that about 46% of those surveyed have adopted cyber defence solutions to counter rising online threats. Also, women-led enterprises in the sector achieved a DMI of 61.6 while the figure stood at 60.4 for men. This indicates a sharp rise in digital maturity from 58 in 2025 to 60.8 in 2026 and underscores the efforts by entrepreneurs to leverage digital technologies to drive business growth, enhance operational efficiencies. The Vi Business study also noted that the digital workplace has emerged as the fastest growing pillar of transformation, rising from 57.5 in 2023 to 65.7 in 2026, reflecting growing adoption of workplace collaboration platforms, productivity suites, HRMS solutions and digital ways of working. Digital Operations also recorded strong progress, increasing from 56.5 to 62.0 during the same period, as MSMEs increasingly leveraged technology to streamline processes, improve efficiency and strengthen business resilience. M P Sunil Kumar, Chief Enterprise Business Officer, Vodafone Idea Limited said in a statement that "India's MSMEs are moving beyond basic digitisation towards building intelligent, secure, and future-ready enterprises. The growing adoption of AI, rising digital maturity levels, and increasing investments in workplace and operational technologies reflect a perceptible shift." The study further note that digital maturity continued to improve across sectors, although the pace of transformation varied significantly. Financial Services emerged as India's most digitally mature sector with a DMI of 67.3, overtaking IT & ITeS (66.2), while Transportation (63.6), Energy & Utilities (62.9) and Tourism & Hospitality (62.0) also ranked among the leading sectors. Financial Services recorded the strongest improvement since 2023, gaining 14.3 points, driven by widespread adoption of digital payments, online onboarding, customer engagement platforms and cybersecurity solutions. Retail emerged as the second-most improved sector, recording a 9.9-point increase in DMI from 52 to 61.9, reflecting growing adoption of omnichannel engagement, digital payments and online customer acquisition channels. IT & ITeS (+7.2 points), Tourism & Hospitality (+7.0 points) and Energy & Utilities (+6.9 points) also registered strong gains, supported by increasing adoption of AI, cloud technologies, workplace collaboration tools, smart infrastructure and digital service platforms. However, the study also noted that despite this progress, digital transformation remains uneven across sectors. Manufacturing, Agriculture, Telecom, Logistics, Mining, Media & Entertainment and Professional Services continue to lag in digital maturity growth, highlighting opportunities for deeper technology adoption, capability building and digital enablement across India's MSME ecosystem. It also noted uneven digital transformation across the country with the south and west dominating the maturity rankings while the east still does not figure in the top-10 ecosystems. Tamil Nadu, Kerala and Delhi emerged as the top states for AI adoption and intent among MSMEs while Karnataka, Kerala and Telangana reported the highest adoption of cybersecurity solutions and Andhra Pradesh, Telangana and Kerala led in the use of digital payments for business transactions. Telangana (68.3) and Karnataka (65.7) emerged as India's most digitally mature MSME ecosystems, followed by Maharashtra (65.2), Kerala (63.7) and Gujarat (62.8). Maharashtra recorded the highest digital maturity among women-led MSMEs while Telangana recorded the highest Digital Maturity Index in Manufacturing, while Maharashtra led in Financial Services and Haryana topped the rankings in IT & ITeS.