India’s MSME Procurement Economy Pegged at Rs 124.9 Lakh Crore: ISF Report
New Delhi, Aug. 6 (TNT): India’s MSME procurement economy has been estimated at Rs. 124.9 lakh crore, highlighting the sector’s vast potential for digital transformation, according to the Digital Bharat: India Digital Procurement Report 2026 released by the India SME Forum (ISF).
The report, unveiled by Union Minister of State for MSME and Labour & Employment Shobha Karandlaje, is based on a study covering 515.3 lakh Udyam-registered MSMEs and one of the country’s largest surveys on MSME procurement behaviour and digital adoption.
According to the report, over 75 per cent of MSMEs surveyed spend between Rs. 10 lakh and Rs. 1 crore every month on procurement.
However, only 30-40 per cent of procurement expenditure is currently routed through digital channels, indicating significant scope for digital adoption.
The study found that price volatility remains the biggest procurement challenge for MSMEs, followed by managing multiple suppliers, payment and credit constraints, and the lack of dependable vendors.
It said 80.4 per cent of enterprises expect digital procurement to play a major role in expanding their businesses over the next three years.
The report identified Amazon Business as the preferred platform for price transparency and supplier quality among surveyed MSMEs, while Moglix emerged as a leading platform for industrial procurement and embedded finance.
Addressing the event, Karandlaje said digital procurement could improve efficiency, reduce costs, strengthen supply chains and enhance the competitiveness of MSMEs in domestic and global markets.
The report also projected increased adoption of digital procurement tools and artificial intelligence, with 61.5 per cent of MSMEs planning to expand the use of digital procurement solutions and 49.7 per cent expecting to adopt AI-powered procurement systems over the next two years.
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