Abstract

The rapid pace of digital transformation presents both unprecedented opportunities and significant challenges for Micro, Small, and Medium Enterprises (MSMEs) in India. As the backbone of the Indian economy contributing approximately 30% to the nation's GDP and employing over 110 million people, MSMEs face unique impediments in embracing digital technologies that differ substantially from those encountered by larger corporate entities. This research paper investigates the multifaceted challenges encountered by Indian MSMEs in adopting and implementing digital technologies, examining factors ranging from financial constraints and infrastructure limitations to skill gaps and organizational resistance. The study employs a descriptive research design, synthesizing evidence from existing literature, government reports, and empirical studies to provide a comprehensive analysis of the digital adoption landscape for Indian MSMEs. Findings reveal that while government initiatives such as Digital India and various MSME support schemes have created a more conducive environment, significant barriers persist including high implementation costs, limited digital literacy among workforce and management, inadequate technological infrastructure, cybersecurity concerns, and market uncertainties. The paper concludes with actionable recommendations for policymakers, industry stakeholders, and MSME entrepreneurs to facilitate smoother digital transitions, ultimately contributing to the enhanced competitiveness and sustainability of India's MSME sector in the digital economy.