Empowering Small Businesses in India Through Digital Transformation: The Role of AI and Data-Driven Insights

Adopting digital transformation has become a crucial strategy for Indian small businesses seeking toenhance customer engagement, competitiveness, and operational efficiency. This study examines how digital toolsand artificial intelligence (AI) are driving the desired change. Through an analysis of data gathered from 500 smallfirms across various industries, the study identifies key factors that promote, hinder, and result from digitaladoption. To extract valuable information, statistical techniques, including Factor analysis, ANOVA test anddescriptive statistics, were used. Results show that companies are using AI for predictive analytics, consumerinteraction, and inventory management. Issues like financial limitations and a lack of computer knowledge arebrought to light. To close the digital divide, the report emphasises the need for capacity-building programs andgovernment support.