A recent study by Vodafone Idea’s enterprise arm reveals that 72% of micro, small, and medium enterprises (MSMEs) across various sectors plan to increase their spending on cloud services this year, while 76% are also investing in cybersecurity due to the growing threat of cyberattacks. The findings highlight how MSMEs in India are moving beyond just exploring technology to actively adopting it.
“MSMEs in India are clearly moving from digital curiosity to digital commitment, and that’s an encouraging shift. The sharp rise in investment intent around cloud, cybersecurity, and automation shows that small businesses increasingly see technology as a growth enabler, not just a utility,” said Arvind Nevatia, Chief Enterprise Business Officer at Vodafone Idea, in a statement on World MSME Day.
The “Ready for Next MSME Growth Insights Study 2025,” now in its third edition by Vi Business, also shows that digital maturity is still uneven across sectors. Professional services are leading the way, with a possible 73% increase in digital transformation budgets this year. This is followed by retail (56%) and logistics (54%). The education sector, however, remains at the bottom with only 32% expected increase.
Vi Business said that government initiatives like Digital India and BharatNet, along with the rising use of mobile broadband, are encouraging smaller businesses to explore digital tools to improve efficiency and expand their reach. However, the company also pointed out that digital adoption among MSMEs remains fragmented.
The report added that access to financial support and advisory services is key to speeding up digital transformation for small businesses. While awareness and intent to adopt digital tools are increasing, actual adoption depends largely on the financial strength of the business. MSMEs with an annual turnover between ₹50 crore and ₹100 crore or more have shown higher digital maturity as they are better able to invest in advanced tools such as cloud services, automation, and customer engagement platforms. On the other hand, younger and smaller MSMEs, though digitally aware, are investing more cautiously due to limited budgets.
Meanwhile, a separate study by PayNearby, a branchless banking and digital network, found that 33% of MSMEs have seen improved operational efficiency through digital adoption.
The study also highlighted that 71% of MSMEs now use smartphones as their main business device, making UPI the most preferred mode of transactions. Over 73% of small businesses reported higher income or better operational efficiency after adopting digital tools.
Daily internet usage is also growing among MSMEs, with 69% of them consuming between 2GB and 5GB of data per day, mainly through mobile hotspots. Around 86% spend ₹500 to ₹1,000 per month on internet services. PayNearby surveyed 10,000 individuals and MSMEs, especially in retail sectors like kirana stores, mobile recharge outlets, medical shops, service points, and travel agencies.
“The MSME sector is the backbone of Bharat’s economy, and the rapid adoption of digital tools such as smartphones, UPI, Aadhaar-enabled banking, and emerging AI workflows is proof that this segment is embracing modernisation,” said Anand Kumar Bajaj, Founder, MD & CEO, PayNearby.
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