Framework: Principles and pillars The IMPACT AI framework offers a structured approach to scaling AI adoption in Indian MSMEs, aligning stakeholder efforts around three core pillars: awareness, action and recognition. Together, these pillars provide a comprehensive roadmap for building an AI-driven MSME ecosystem. Call to actionAwareness pillar The creating awareness pillar focuses on bridging knowledge gaps and building trust among MSMEs regarding AI adoption. It includes establishing AI experience centres, AI sandboxes and capability-building programmes to demonstrate the practical benefits of AI solutions and foster peer-to- peer learning. Action Pillar The inspiring action pillar is designed to equip MSMEs with actionable tools and frameworks such as the AI maturity index, AI solutions marketplace and alternative financing options. It enables businesses to assess their readiness, identify suitable solutions and effectively implement AI technologies.Recognition pillar The receiving recognition pillar emphasizes the showcasing of successful early adopters as role models through an MSME AI pioneer programme. By celebrating pioneers, this pillar aims to inspire confidence, encourage broader adoption and foster an ecosystem- wide momentum towards AI transformation. To accelerate AI adoption and realize its transformative potential within India’s MSMEs, it is critical for all stakeholders – including central and state governments, MSME entrepreneurs, AI start-ups, industry leaders and academia – to collaborate and take concrete steps forward. Policy-makers should establish enabling environments and infrastructure; MSME entrepreneurs should make efforts to proactively understand and embrace AI; and AI start-ups and solution providers should focus on creating affordable and accessible solutions tailored to MSMEs. Collective action can empower India’s MSMEs and drive their economic growth. If we want AI to truly serve inclusive growth, it must work not only for large enterprises but also for the millions of MSMEs driving economies like India’s. Through initiatives like AI for India, AI Transformation of Industries and the global collaboration fostered by AIGA, we’re laying the groundwork for scalable, responsible and locally relevant AI adoption. This playbook is a vital step in that journey – turning ambition into action for India’s MSME ecosystem. Cathy Li, Head, AI, Data and Metaverse; Member of the Executive Committee, World Economic Forum The Global Lighthouse Network has proven how large manufacturers have harnessed advanced technologies like Al to drive step-change performance improvements at scale. The next frontier is bringing these innovations to MSMEs – so they too can benefit from increased productivity, resilience and global competitiveness. This playbook provides a practical path to turn that ambition into reality. Kiva Allgood, Managing Director, San Francisco Office, Centre for Advanced Manufacturing and Supply Chain and Centre for Urban Transformation, World Economic Forum Transforming Small Businesses: An AI Playbook for India’s SMEs 5

Transforming Small Businesses 2025