AI Adoption Across MSMEs Could Unlock Over USD 500 Bn For India: BCG

New Delhi, Dec 18 (KNN) Adoption of artificial intelligence (AI) across India’s 64 million micro, small and medium enterprises (MSMEs) could unlock more than USD 500 billion in economic value, but the country needs to shift from an ‘adopt-first’ to an ‘invent-first’ approach to fully realise this potential, according to a new report.

The report, ‘India’s Triple AI Imperative: Succeeding with AI in India’, released jointly by BCG X—the technology and innovation arm of Boston Consulting Group—and the Federation of Indian Chambers of Commerce & Industry (FICCI), notes that while India is among the world’s fastest-growing AI markets, it continues to lag in deep innovation and value realisation, reported PTI.

Untapped Potential in MSMEs

The study identifies MSMEs as a particularly underleveraged segment, stating that AI adoption in this sector alone could generate substantial gains through higher productivity, cost efficiencies and improved access to credit. However, it flags persistent barriers, including gaps in digital infrastructure, limited awareness and shortages of skilled talent, which constrain large-scale adoption.

Although India ranks in the top quartile globally in terms of AI readiness, the report points out that the country accounts for less than 1 per cent of global AI patents. It calls for a greater emphasis on building ‘AI-first’ businesses, rather than deploying AI narrowly to address isolated or incremental problems.

Investment Gaps and Value Realisation

The report highlights a disconnect between intent and investment. Nearly 44 per cent of senior executives surveyed allocate less than 10 per cent of their technology budgets to AI. It also notes that only about one in four executives currently report realising meaningful value from AI deployments.

According to the study, corporates often limit AI use to micro-level applications instead of pursuing broader functional and organisational transformation. This approach, it argues, restricts the technology’s ability to deliver sustained competitive advantage.

Call for Inclusive and Innovation-Led Growth

FICCI Director General Jyoti Vij said, "India's opportunity in AI lies not only in scale, but in inclusion. By supporting AI adoption across MSMEs, startups, and regional ecosystems, the country can drive productivity gains, generate quality employment, and support long-term socio-economic resilience."

Echoing this view, Nipun Kalra, Managing Director and Senior Partner at BCG, said, "True value will come from building AI-first businesses, driving deep innovation and ensuring inclusive access."

Outlook for AI-Driven Operations

The report projects a significant shift in operating models by 2026, with AI gaining priority in task execution. It estimates that 70–80 per cent of routine tasks and 30–50 per cent of reasoning-based tasks could be handled by AI in the near future, underscoring the scale of transformation expected across industries.

(KNN Bureau)