Most Indian MSMEs think AI isn't for them. Here's why that's costing them sales

India's MSMEs make up 30.1% of the country's GDP and 45.73% of its exports, making them key to the economy. But AI use among them is still very low. Even larger manufacturers have less than 25% AI adoption, with MSMEs falling far behind, compared with in countries like China, Germany and the US.

The issue is not access or cost. Most AI tools for retail are now modular and affordable for small businesses. The real challenge is understanding what AI does and how it fits into a business without a tech team.

Many hesitate because they misunderstand AI. It is not just a chatbot you ask questions to. It works quietly in the background, tracking stocks, spotting price errors and catching things a busy owner might miss.

At YourStory's MSME Sparks 2026, Fynd's Chief Business Officer Ragini Varma addressed this directly, explaining why so many small businesses are hesitant and what changes once they see AI for what it really is.

Where the gaps usually show up

Every small business owner feels stretched too thin. They check stock before reordering because no one else will. They manually match prices online and in-store, often after a customer points out an error. They answer the same WhatsApp question over and over.

This is normal for MSMEs, but it means the business moves as fast as one person can manage. In this juggling, mistakes happen: a missed order, a wrong price or a frustrated customer leaving.

AI helps by tracking stock, prices and orders in real time and alerting to what needs fixing, while the owner still makes the final decisions. It is like a second pair of eyes that never gets tired.

The goal is not to hand the business over. It is a partnership where AI flags issues and the owner decides what to do.

What this looks like in practice

Every small business owner wears many hats and there are only so many hours in a day.

Here is how autonomous retail helps, step by step:

• Customer support, first. This is often the biggest fix, since unhappy customers rarely return. Fynd’s AI assistant, Kaily, handles routine questions and alerts urgent complaints by tone, learning from the business’s own data.

• Catalog work, cut down. Creating product listings for many marketplaces is tiring and repetitive. Fynd AI PIM turns one product photo into a ready listing, cutting about 80% of this work.

• Creative content, without a studio. Fynd AI Studio and Fynd Generative Media create studio-quality images, model shots and marketing videos from a single photo and a simple prompt - no photoshoot needed.

• Logistics, from one place. MSMEs lose time chasing order updates across marketplaces and managers. Fynd Manage Logistics links a seller’s website and all marketplaces into one inventory source, so orders are tracked and fulfilled from one dashboard.

This is not just theory. Puma uses Fynd Store OS for real-time inventory across stores and Fynd also supports backend operations for JioMart. The same system works for single-store MSMEs and the largest retailers.

Where to actually start

Most businesses make a mistake: they do not diagnose their problem before buying tools. They end up buying many tools when only one bottleneck exists.

The smart way is to avoid paying for the wrong solution. Buying an expensive all-in-one platform when a small tool would work means solving the wrong problem. Find what is actually costing time or sales, fix that first, then grow from there.

This is why Fynd offers AI consulting for MSMEs, helping businesses find where to begin instead of selling one-size-fits-all packages. They work with industrial B2B sellers, accounting firms managing taxes and bookkeeping and food businesses handling customer queries.

How Fynd helps

For MSMEs unsure about AI, the choice is more about mindset than technology: either AI runs the business, or the business controls AI. It depends on who leads.

This is the core of autonomous retail: not a system that takes over, but one that removes daily tasks that waste time like stock checks, price errors and repetitive replies tasks done only because no one else would do them.

Fynd is designed to be modular: a business can start with one problem, one tool and add more only as it grows. Not the whole system on day one, just the part holding it back.