Technology is the backbone for future growth of MSMEs: Insaraf founder

Technology is now the backbone for India's micro, small and medium enterprises (MSMEs), and this segment will only have to deepen the engagement to run a successful business, said Raghunandan Sarraf, an entrepreneur in the retail furniture space.

“Technology is not something which we can choose to have or not to have as it is the backbone for MSMEs,” said Sarraf, Founder and CEO of Insaraf (Saraf Furniture), during a fireside chat at MSME Sparks 2025, a week long event hosted by YourStory to celebrate MSME Week, spotlighting the unsung heroes building the country’s economic future.

Speaking on the topic, MSMEs 2030: Shaping India’s economic future, Sarraf said that given the pace of technological changes, MSMEs will also have to evolve to be in sync with the changing requirements of customers.

Today, artificial intelligence (AI) has become a key driver and enabler for business, and Sarraf believes there is no question of disregarding or ignoring the role of AI applications. "MSME enterprises today cannot function without digital marketing. It is marketing first and operations later," he remarked.

Given that technology is not their main forte, the Insaraf founder advocated for MSMEs to look at outsourcing their requirements, especially with larger tech enterprises.

At the same time, he also believed that adopting technology to deliver the optimal customer experience is still some time away, despite the presence of several AI tools. “Maybe in the future we will have technology which will provide the right experience,” Sarraf remarked.

The entrepreneur said one of the urgent requirements from the government is the streamlining of the taxation structure. “We are not asking for a lower amount of taxation, but need a lot of clarity in terms of how these taxes are defined.” He added that MSME business owners need to spend a lot of time to deal with tax regulations.

Today, MSMEs are not just looking at the domestic market but also at overseas countries. According to information available on the Press Information Bureau, nearly 5.93 crore registered MSMEs employ over 25 crore people, generating a significant share of the country’s economic output.

In 2023-24, MSME-related products accounted for 45.73% of India’s total exports, reinforcing their role in positioning the country as a global manufacturing hub.

Sarraf believes that ecommerce platforms are enabling global access for Indian MSMEs, but it is still at an infancy stage, primarily due to a lack of clarity on the policy framework. He is hopeful of it becoming a big opportunity once the framework is in place.

Speaking on the access to capital for MSMEs, Sarraf said the situation is much better now compared to about five years ago. “In terms of the ease of business, we are getting there,” he added.

To young MSME entrepreneurs, Sarraf said it is all about having the right product, which meets the needs of the customers. He further noted that young entrepreneurs need to listen to elderly mentors as they have the wisdom, given their experience.

Citing an example of how Insaraf managed to retain its customers in a hyper-competitive space of furniture retailing, he said the company has a programme where any potential new customer can visit those customers’ homes who have already bought their furniture. This gives Insaraf a first-hand feel of how the furniture will look in their homes, and this is applicable in those locations where Insaraf does not have a retail outlet. The existing customers get a coupon from the company for this service.

“One has to always stay true to their product,” he added.