MSME hiring rises 25% in FY25; sales roles dominate demand: Report

AI-related skills grew by 164 per cent in FY26, signalling that MSMEs are increasingly investing in digital capabilities as they scale their businesses.

The analysis also highlighted that India’s workforce is becoming more geographically distributed with nearly two-thirds of MSME job demand remaining concentrated in tier I city clusters.

This reflects that workforce participation is increasingly expanding beyond metropolitan markets.

Tier II cities accounted for 30 per cent of all applicants in FY26, signalling the growing contribution of non-metro talent to India’s formal workforce while tier III markets represent the next significant opportunity.

“India’s MSMEs are entering an AI era. The 164 per cent growth in demand for AI-related skills shows that artificial intelligence is rapidly moving from experimentation to everyday business use. For workers, AI literacy is becoming an employability skill. For small businesses, AI is becoming a productivity and hiring tool,” Apna Jobs CEO Kartik Narayan said.

Historically, he said, many MSMEs could not afford large HR teams or specialist recruiters.

“AI is helping change that by giving small businesses access to capabilities that were once available only to larger enterprises – from candidate sourcing and screening to faster hiring decisions. Combined with the rise of talent from tier II and III India, this is creating a more level playing field for businesses and workers alike. The next chapter of India’s MSME growth story will be driven not just by access to capital, but by access to skilled talent and AI-powered productivity,” he added.