Advanced International Journal for Research

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Volume 7 Issue 2
March-April 2026

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Impact of Digital Adoption on Sustainability and Performance of MSMEs in India

Author(s) Ms BHAVYA AGGARWAL
Country India
Abstract Micro, Small and Medium Enterprises (MSMEs) play a pivotal role in India’s economic development by contributing significantly to employment generation, industrial output, and exports. In recent years, digital adoption has emerged as a key enabler of operational efficiency, competitiveness, and sustainability for MSMEs. Digital tools such as digital payments, e-commerce platforms, cloud-based accounting, and digital marketing systems have the potential to enhance business performance while supporting environmentally sustainable practices. Despite this potential, empirical evidence on the relationship between digital adoption, sustainability, and firm performance among Indian MSMEs remains limited, particularly at the micro-enterprise level.
This study examines the impact of digital adoption on the economic performance and sustainability practices of MSMEs in India using a quantitative research approach. Primary data were collected through a structured questionnaire from 20 MSMEs operating in manufacturing and service sectors. Descriptive statistics, correlation analysis, and multiple regression analysis were employed to test the proposed hypotheses. The findings indicate a statistically significant positive relationship between digital adoption and firm performance, measured through revenue growth, productivity, and market reach. Additionally, digital adoption was found to positively influence sustainability practices such as resource efficiency, waste reduction, and energy management, although the magnitude of this effect was comparatively moderate.
The study contributes to existing literature by providing empirical evidence on the role of digital technologies in promoting sustainable and competitive MSMEs in India. The findings offer valuable insights for policymakers, MSME owners, and development agencies to design targeted interventions for enhancing digital and sustainable transformation in the MSME sector.
Keywords Digital Adoption, MSMEs, Sustainability, Firm Performance, Quantitative Study, India
Published In Volume 7, Issue 2, March-April 2026
Published On 2026-03-23
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E-ISSN 3048-7641
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