GUJARAT, AHMEDABAD | 22nd SEPTEMBER 2025: Gujarat’s small and medium enterprises (SMEs) are rapidly embedding artificial intelligence (AI) into their operations, moving beyond pilots to full-scale integration, according to Kotak Mahindra Bank. The lender says the state’s dense industrial clusters are driving a decisive shift in how businesses manage trade, finance and growth, making Gujarat one of India’s most dynamic AI adoption hubs.
The state, home to over 3.5 million registered MSMEs—about 14% of India’s base, with nearly 46% concentrated in and around Surat—has also unveiled a multi-year AI strategy that includes partnerships with global technology firms and an AI Center of Excellence at GIFT City. This policy push, combined with entrepreneurial agility, is accelerating digital transformation across sectors such as textiles, gems and jewelry, engineering, chemicals, pharmaceuticals and food processing.
“Gujarat’s entrepreneurs are bold, visionary and digitally fluent. They’re not just keeping up—they’re leading,” said Shekhar Bhandari, President – Small and Medium Enterprises, Kotak Mahindra Bank. “We are seeing three clear trends. First, AI is moving from standalone tools to embedded workflows, linking trade documentation, payments and receivables. Second, knowledge sharing within industrial clusters is creating a network effect that speeds up adoption. And third, businesses are pairing AI with digital banking platforms to improve cash-flow visibility and working-capital efficiency. This convergence of finance and technology is giving SMEs a measurable edge.”
Kotak FYN, the bank’s digital platform, is at the center of this shift. It offers paperless trade finance, seamless collections and payments, and AI-powered analytics, enabling SMEs to optimize working capital and scale faster. The platform provides universal access across mobile, web and APIs, aligning with the varied digital readiness of businesses.
To meet rising demand, Kotak is expanding its presence in hubs such as Surat and Ahmedabad. Industry analysts say Gujarat’s SME sector, long known for its entrepreneurial agility, is now leveraging AI to compress cycle times and compete globally. “The rise of AI-enabled SMEs underscores how digital infrastructure and financial innovation can amplify competitiveness,” Bhandari added.
India’s broader AI push could add $500-600 billion to GDP by 2035, according to a NITI Aayog report, with financial services and manufacturing expected to capture a significant share of this value.
