AI Adoption in MSMEs Can Unlock over $500 Bn Economic Value: BCGX-FICCI Report

Adoption of Artificial Intelligence (AI) in India's 64 million Micro, Small and Medium Enterprises (MSMEs) alone could unlock over $500 billion in economic value, but the country must pivot from an "adopt-first" to an "invent-first" mindset to realise this potential, according to a new report.

The report, titled "India's Triple AI Imperative: Succeeding with AI in India", released by Boston Consulting Group (BCGX) and Federation of Indian Chambers of Commerce & Industry (FICCI), noted that while India has one of the world's fastest-growing AI markets, it faces significant gaps in deep innovation and value realisation.

BCG X is the technology build, design, and innovation arm of Boston Consulting Group (BCG).

"A particularly untapped opportunity lies in India's 64 million MSMEs. AI adoption in this segment alone could unlock over $500 billion in economic value, through productivity gains, cost savings, and improved access to credit," the report stated.

However, the findings highlighted that barriers such as digital infrastructure, lack of awareness, and access to skilled talent persist in the sector.

According to the report, while India ranks in the top quartile globally for AI readiness, it currently contributes less than 1% of global AI patents. The study urged a shift toward creating "AI-first" businesses rather than just deploying the technology 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 found a disconnect between interest and investment. Nearly 44 per cent of executives still invest less than 10% of their technology budgets in AI.

The common mistake corporates make is limiting AI to use cases that solve micro-problems, rather than pivoting to functional transformations, the report noted. 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 projects a significant shift in operating models by 2026, where AI will have the first right to perform specific duties. It estimates that over 70-80% of routine tasks and 30-50% of reasoning-based tasks could be performed by AI in the near future.