26% Indian SMEs Integrated AI; 45% Struggle With Cross Boarder Payment Regime: Survey

New Delhi, Sep 24 (KNN) Small and medium-sized businesses (SMBs) in India are increasingly turning to technological advancements to enhance their global presence, according to the 2024 SMB Ambitions Barometer report by Payoneer in collaboration with Oxford Economics.

The report, based on insights from 3,779 SMB decision-makers worldwide, including 252 from India, sheds light on the ambitions and challenges faced by Indian SMBs as they navigate the global market.

A key takeaway from the report is India's edge in adopting artificial intelligence (AI) compared to its global peers. An impressive 26 per cent of Indian SMBs have integrated AI into their operations, surpassing the global average of 20 per cent.

As more than 78 per cent of businesses cite technology as a crucial driver of innovation, investments in AI, digitisation, and automation are expected to rise.

Despite their global ambitions, Indian SMBs face significant barriers in expanding internationally. The report found that 45 per cent of businesses struggle with cross-border payments, citing issues such as slow transaction times, foreign exchange volatility, and regulatory hurdles.

The report highlights that Indian SMBs that have embraced technology are not only improving efficiency but also boosting profitability by automating tasks and enhancing workforce skills.

The push for global exposure remains a top priority for Indian SMBs, with 61 per cent of surveyed businesses identifying technological advancements as critical to expanding internationally.

The US is the largest trading partner, accounting for 40 per cent of Indian SMBs' cross-border transactions, followed by Australia, China, and the UK. Additionally, Indian SMBs are eyeing regional markets, particularly in South Asia and East Asia, where growth opportunities are ripe.

SMBs also continue to play a vital role in local economies, having created over 6 million jobs between 2021 and 2022. However, Indian SMBs lag behind the global average in hiring local talent, with 49.8 per cent of hiring being local compared to the global average of 57 per cent.

Rising import duties since 2017 have also disproportionately impacted SMBs, as larger companies pass on increased costs to smaller players, reducing their competitive edge.

Looking ahead, 83 per cent of Indian SMBs expect revenue growth in the next year, with a strong focus on regional expansion into South Asian and East Asian markets.

While optimism prevails, Indian SMBs must overcome operational and regulatory challenges to sustain long-term global success.

(KNN Bureau)