Micro, Small and Medium Enterprises (MSMEs) play a vital role in the Indian economy through their contribution to employment generation, industrial production, and inclusive growth. However, MSMEs continue to face challenges related to limited resources, low productivity, and increasing competitive pressure. In this context, Artificial Intelligence (AI) and automation have emerged as transformative technologies capable of enhancing operational efficiency and decision-making. This study examines the role of AI and automation in supporting the growth of MSMEs in India by analyzing their applications across key functional areas such as marketing, manufacturing, finance, and supply chain management. The study adopts a descriptive research design and is based on secondary data collected from government reports, industry publications, and existing academic literature. Qualitative content analysis is used to identify major application areas, benefits, and challenges associated with AI adoption. The findings indicate that AI-enabled and automated systems help MSMEs reduce operational costs, improve product quality, enhance customer experience, and strengthen competitiveness. At the same time, challenges such as high initial investment, lack of digital skills, inadequate infrastructure, and data security concerns continue to restrict large-scale adoption. The study concludes that AI and automation can serve as important growth enablers for MSMEs if supported by appropriate policy interventions, skill development initiatives, and strategic implementation approaches.
P et al. (2026) studied this question.