Business EconomyPosted at: Mar 15 2026 3:08PM


AI adoption could unlock over USD 3 trn opportunity for India’s MSMEs by 2047: Report

New Delhi, March 15 (UNI) Artificial Intelligence (AI) has the potential to significantly transform India’s micro, small and medium enterprises (MSMEs), unlocking economic opportunities worth over USD 3 trillion by 2047, according to a joint report by PwC India and the Observer Research Foundation (ORF).
The report “Unlocking the AI Edge for MSMEs,” highlighted that India’s MSMEs play a crucial role in the country’s economic and industrial landscape and could emerge as a major driver of manufacturing growth with the adoption of advanced technologies such as AI.
" If India succeeds in increasing manufacturing's share of GDP to 25pc, and MSMEs raise their contribution to India's manufacturing gross value added (GVA) from 35.4pc in FY 2023-24 to 50pc by 2047, they stand to unlock growth opportunties in the range of USD 3.13-3.21 trillion by 2047" it said.
According to the report, MSMEs currently contribute 35.4 percent of India’s manufacturing value added and about 48.6 percent of the country’s total exports, while employing more than 33 crore people across the country.
The sector, therefore, holds significant potential to support India’s ambition of becoming a global manufacturing hub.
The study noted that if manufacturing expands to account for 25 percent of India’s GDP and MSMEs increase their share in manufacturing value added to 50 percent by 2047, the sector could generate economic opportunities worth USD 3.13 trillion to USD 3.21 trillion.
Artificial Intelligence, the report said, could act as a powerful enabler for MSMEs by improving operational efficiency, strengthening decision-making processes and enhancing product quality.
AI-driven technologies such as predictive maintenance, intelligent supply chain management, demand forecasting and automated quality inspection could help businesses reduce costs and boost productivity.
The report estimated that AI adoption alone could contribute USD 135.6 billion to USD 149.9 billion to the growth of manufacturing MSMEs by 2035, provided the sector strengthens its participation in India’s manufacturing ecosystem.
It also pointed out that the rapid expansion of AI infrastructure, including data centres and computing systems, could create an additional USD 100 billion to USD 150 billion demand opportunity for MSMEs involved in supplying components, cooling systems and other industrial equipment required for AI ecosystems.
However, the report observed that several barriers continue to hinder the widespread adoption of AI among MSMEs. These include limited digital readiness, lack of technical expertise, high costs associated with new technologies and concerns about the reliability and long-term returns of AI investments.
To address these challenges, the report suggested a structured adoption model that focuses on improving access to AI tools, building awareness and acceptance among business owners and workers, integrating AI solutions into operational workflows and eventually embedding them into core business processes.
The study also recommended the development of a comprehensive ecosystem that can help MSMEs identify appropriate AI solutions, test them in controlled environments and scale them effectively across industries.
It emphasised that collaboration between the government, technology providers, financial institutions and industry bodies would be crucial to accelerate AI adoption among small businesses.
According to the report, enabling MSMEs to harness AI technologies could not only strengthen their competitiveness but also help India position itself as a global hub for advanced manufacturing and innovation in the coming decades.
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