“IOT Adoption in Manufacturing MSMEs of India: A Review of Barriers, Opportunities and Policy Landscape”

The adoption of Industrial Internet of Things (IIoT) technologies among manufacturing Micro, Small and Medium Enterprises (MSMEs) in India remains remarkably low despite a decade of government promotion. This paper reviews academic studies, government reports, and news articles published between 2018 and 2025 to understand the barriers to IIoT adoption in this sector. The review identifies four interconnected categories of barriers: technological (outdated machinery, poor connectivity), organizational (digital skill shortages, low awareness of government schemes), financial (credit gap of ₹80 lakh crore, high upfront costs), and environmental (underdeveloped vendor ecosystems, policy implementation gaps). Despite these barriers, documented success stories demonstrate that IIoT adoption is both feasible and beneficial. One study achieved 22.5% reduction in cycle time and 71.43% reduction in errors with an investment of INR 1.3 lakh. Industry reports document 20-25% improvements in efficiency and 35% reduction in defects among early adopters. The paper concludes that while the technology works and the costs are affordable for many medium enterprises, adoption remains low due to interacting barriers that no single policy or intervention can address alone.

Industrial Internet of Things, IIoT, MSME, manufacturing, India, technology adoption, barriers

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