Four In Five MSMEs See Digital Procurement Driving Growth: ISF Report

New Delhi, Aug 7 (KNN) India's micro, small and medium enterprises (MSMEs) are rapidly adopting digital procurement, with four out of five businesses expecting online sourcing platforms to drive growth over the next three years, according to a report released by the India SME Forum (ISF).

Digital Procurement Economy Estimated At Rs 124.9 Trillion

The report, Digital Bharat: India Digital Procurement Report 2026, estimates India's MSME procurement economy at Rs 124.9 trillion, based on 51.53 million Udyam-registered MSMEs. 

Released by Minister of State Shobha Karandlaje, it said digital procurement can reduce costs, improve efficiency, strengthen supply chains and boost MSME competitiveness. 

Karandlaje said digital procurement should become a strategic business capability to support a developed and self-reliant India, reported Business Standard. 

Four In Five MSMEs Expect Digital Procurement To Drive Growth

The study found that 80.4 percent of MSMEs expect digital procurement to drive business expansion over the next three years. Around 68.7 percent plan to source raw materials online and 61.3 percent intend to buy machinery digitally. 

While over 75 percent spend Rs 10 lakh to Rs 1 crore monthly on procurement, only 30-40 percent of spending currently occurs through digital channels, highlighting significant growth potential. 

Price Volatility Tops Procurement Challenges

The report found that 64.5 percent of procurement decisions are still made directly by business owners, underscoring the need for user-friendly digital procurement platforms.

Among procurement challenges, price volatility was cited by 55.7 percent of respondents, followed by managing multiple suppliers (37.6 percent), payment and credit constraints (35.6 percent), and the lack of a reliable single vendor (33.4 percent).

Flexible Payments, GST Invoicing Key Platform Priorities

MSMEs identified flexible payment and credit options, GST-compliant invoicing, wider product selection, ease of ordering and faster delivery as the key features of digital procurement platforms. 

The report ranked Amazon Business highest for price transparency and supplier quality, while Moglix led in industrial procurement and embedded finance. Other major platforms include Meesho, OfBusiness, Udaan, Flipkart Business, IndustryBuying, IndiaMART and Jumbotail. 

DPIIT Calls For Further Procurement Reforms

DPIIT Additional Secretary Ateesh Kumar Singh said procurement reforms have laid a strong foundation but called for further modernisation through quality- and cost-based selection, revised procurement thresholds, stronger mobilisation advances and sector-specific relaxations. 

India SME Forum President Vinod Kumar said MSMEs should transition from occasional online purchasing to fully integrated, data-driven procurement systems through collaboration between industry, technology providers and policymakers. 

(KNN Bureau)