AI adoption in India’s 64 mn MSMEs can unlock over $500 bn economic value

New Delhi: Adoption of Artificial Intelligence in India’s 64 million Micro, Small and Medium Enterprises could unlock over USD 500 billion in economic value, but the country must move from an “adopt-first” to an “invent-first” mindset to realise the full opportunity, a new report said.

The report, titled India’s Triple AI Imperative: Succeeding with AI in India, was released by Boston Consulting Group’s BCGX and the Federation of Indian Chambers of Commerce and Industry (FICCI). BCGX is the technology build, design and innovation arm of Boston Consulting Group.

The study said India is among the world’s fastest-growing AI markets, but it faces gaps in deep innovation and value realisation.

It identified India’s MSME base as a “particularly untapped opportunity”, stating that AI adoption in this segment alone could unlock over USD 500 billion through productivity gains, cost savings and improved access to credit.

However, the report said barriers remain, including digital infrastructure constraints, lack of awareness and limited access to skilled talent.

It added that while India ranks in the top quartile globally for AI readiness, it contributes less than 1% of global AI patents. The study urged companies to build “AI-first” businesses instead of deploying AI only for micro-problems.

“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,” FICCI Director General Jyoti Vij said.

The report flagged a gap between interest and investment in corporate India. It said nearly 44% of executives still invest less than 10% of their technology budgets in AI.

It noted that a common mistake is limiting AI to small use cases instead of driving functional transformations. It added that only 25% of executives currently realise the “real value” from AI.

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

The report also projected a shift in operating models by 2026, where AI will get the first right to perform specific duties. It is estimated that AI could handle 70–80% of routine tasks and 30–50% of reasoning-based tasks in the near future.