New Delhi, Mar 24 (KNN) The growth of India’s MSME sector is heavily accelerated by digitalisation and the government’s Open Network for Digital Commerce (ONDC) initiative is likely to spur increased digital adoption by MSMEs, said a report by Elara Securities.

Findings of a survey conducted by Bluehost, a web hosting solutions provider was also shared in the report.

It said Indian MSMEs are rapidly adopting digital payments over cash – 72 per cent of payments were through the digital mode compared while cash transactions accounted for 28 per cent.

Not only are new small businesses embracing digitalisation, more and more existing MSMEs are going digital too.

However it falls way behind in comparison to the achievements of countries like the US and China.

The percentage of Indian MSMEs that turned online grew from 32 per cent in FY16 to 55 per cent in FY20, as per data from RedSeer.

India’ MSME digital services market is set to grow six times in the next five years, taking the market opportunity from USD1.5 billion to USD 9 billion by FY25, at a CAGR of 43 per cent.

About 73 per cent of the growth is estimated to come from a surge in the number of digital businesses and 27 per cent from higher average spend on digital services.  (KNN Bureau)