Arjun Malhotra, founding associate at BadCapitalVC, took to X (previously Twitter) to make a pointy case for the way synthetic intelligence (AI) might remodel India’s MSME panorama. Sharing a real-world state of affairs, he wrote: “Surat — By 9 a.m., Rajesh, a textile manufacturing unit proprietor in Surat, has already handled three totally different crises — a delayed material supply, a lacking employee, and an irate buyer. His day mirrors that of hundreds of thousands of MSME homeowners throughout India who put on each hat of their enterprise, juggling firefighting with ahead planning.”
“That is the each day grind of India’s 63 million micro, small, and medium enterprises (MSMEs) that collectively make use of over 500 million folks — greater than the inhabitants of your entire European Union. However regardless of this huge workforce, productiveness stays staggeringly low. The common Indian employee generates simply $7,000 in annual output, in comparison with $80,000 in developed economies,” he added.
“The issue isn’t ambition or workforce. It’s system design,” says Malhotra, whose agency is constructing a thesis round AI’s potential to unlock the subsequent part of development for Indian companies.
In developed markets, 15-20% of the workforce usually handles planning, coordination, and mission administration — the “orchestration layer,” as Malhotra calls it. In India, that burden usually rests solely on the enterprise proprietor, compressing a complete perform into one overworked particular person.
“We’ve got fingers to construct and imaginative and prescient to dream, however we’re lacking the center layer that ties all of it collectively,” he notes.
Conventional instruments like ERPs, logistics apps, and UPI have helped monitor operations however principally doc what has already occurred. “Software program tells you what occurred yesterday. AI can let you know what ought to occur tomorrow,” says Malhotra.
One in every of BadCapital’s portfolio firms, MyGenie, is already making use of AI to resolve this hole. When a employee says, “कल वाले काम के लिए सीमेंट खत्म हो रहा है” (“we’re working low on cement for tomorrow’s work”), the AI interprets the enter, anticipates demand, and suggests options — functioning as a digital mission supervisor at negligible value.
“AI allows subtle planning to achieve even low-margin, resource-constrained companies,” he provides. By powering 1000’s of MSMEs concurrently, AI makes high-quality orchestration extensively accessible — one thing beforehand reserved for big enterprises.
As Malhotra places it: “We do not lack folks. We lack workflows. AI might be that orchestration layer that turns chaos into coordinated execution.”
