Opinion: Harnessing digital skills and ecosystem support to unlock growth for India's MSMEs

Time of India

4 days ago

Micro, Small, and Medium Enterprises (MSMEs) have long been instrumental in steering India's economic progress. (AI image)
By Jason Fremstad
Micro, Small, and Medium Enterprises (MSMEs) have long been instrumental in steering India's economic progress. Often referred to as the backbone of the Indian economy, this sector generates employment for over 240 million people and contributes ~30% to the GDP.
Today, MSMEs stand at a crucial inflection point, one defined by the ability to scale, embrace innovation, and build lasting resilience.
Across urban and rural India alike, MSMEs are increasingly turning to digital tools to fuel their growth. From accessing new markets to managing inventory more efficiently, these businesses actively integrate technology to sharpen their competitive edge. However, the true catalyst for success is not simply the availability of digital tools, but the ability to use them effectively.
This is where digital upskilling matters.
When entrepreneurs and their teams are equipped with the right skills, they are able to fully harness the potential of digital platforms. This foundational layer of digital literacy enables MSMEs to convert capability into tangible outcomes, higher sales, or faster access to credit. The impact goes beyond short-term gains; it lays the groundwork for long-term sustainability.
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Digital skills are proving to be a critical lever for MSME resilience. From basic digital literacy - such as navigating online platforms, to more advanced capabilities like eCommerce integration, payment systems, and digital marketing. Upskilling allows businesses to streamline processes, improve customer engagement, and make data-driven decisions. According to a 2025 ICRIER report, over 60% of MSMEs with an online presence also invested in employee training.
This clear correlation underscores how skilling directly supports successful digital adoption.
For India's microenterprises, which make up a majority of the MSME landscape, the benefits of digital adoption are even more significant. These businesses often face legacy constraints such as limited access to capital, lack of infrastructure, and regional isolation. When paired with training, digital tools can help microenterprises overcome these traditional barriers and potentially evolve into more robust, small-sized enterprises.
Digital skilling also equips MSMEs to adapt to rapidly changing market dynamics. Whether it's a shift in consumer behavior, supply chain disruptions, or new regulatory requirements, digitally literate businesses are better prepared to respond. The agility afforded by digital fluency enables MSMEs to optimize their models in real time and capture new growth opportunities as they emerge.
The second vital component of digital empowerment is access to platforms, tools, and the broader ecosystem.
Digital platforms serve as powerful growth engines. Across sectors and regions, MSMEs are tapping into eCommerce, digital payments, logistics solutions, and enterprise apps to drive efficiency and expand reach. eCommerce platforms, in particular, have become transformative. They allow local businesses to connect with customers across the country, sometimes even globally, without the need for a physical retail presence.
Consider the example of an entrepreneur in Maharashtra selling traditional Konkan food products. The seller is now reaching customers nationwide through digital platforms, sharing regional flavors far beyond her local market. Likewise, a textile artisan in Rajasthan uses eCommerce to bring handwoven home décor to homes across India. These stories reflect a broader shift—MSMEs leveraging technology to grow smarter, serve their communities better, and adapt to a changing economy.
More importantly, selling online helps MSMEs build something that's long been out of reach for many: a credible digital financial footprint. One of the key barriers micro businesses face in accessing affordable credit is the lack of formal financial records or collateral. However, by transacting digitally, MSMEs create verifiable records of sales and payments, which lenders can use to assess creditworthiness.
This helps MSMEs access finance more easily and on better terms, allowing them to invest, create jobs, and enter new markets.
This digital trail enhances trust and transparency, allowing financial institutions to make faster, more accurate lending decisions. As a result, MSMEs can secure timely financing on better terms, fueling expansion, innovation, and job creation.
Research consistently shows that MSMEs that integrate digital tools report higher sales, improved profitability, and job growth, all of which contribute to stronger local economies.
In this way, digital access is not just a business advantage, it's an economic multiplier. It connects MSMEs to a wider value chain, enabling access to capital, data, mentorship, and partnerships that would otherwise remain out of reach.
Yet, digital adoption is not a standalone solution. For digital empowerment to truly deliver impact at scale, it must be supported by a robust, collaborative ecosystem. Skilling programs must be accompanied by accessible platforms, responsive financial services, and policy support.
Industry players, large corporates, financial institutions, and government agencies all have a role to play in enabling this transformation.
When these stakeholders work together, digital skilling and platform participation can become a competitive advantage, one that drives resilience, unlocks innovation, and powers sustainable growth across the MSME sector.
(Jason Fremstad is SVP of Supplier Development, Sourcing, Walmart International)
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