India's MSME sector experienced a 164% surge in demand for AI-related skills during FY26, while the workforce became increasingly geographically dispersed, according to the Apna MSME Hiring Pulse 2026 report released on June 25.
AI Skill Demand and Digital Transformation
The report highlights that Indian MSMEs are transforming their hiring patterns as they scale operations, adopt digital tools, and build a future-ready workforce. Demand for jobs requiring AI-related skills grew by 164% in FY26, signaling that MSMEs are increasingly investing in digital capabilities as they expand their businesses.
Hiring growth remained broad-based, driven by both new businesses entering the recruitment ecosystem and existing employers scaling up their workforce requirements.
Geographic Dispersion of Workforce
India's workforce is becoming more geographically scattered. Nearly two-thirds of MSME job demand (68% in FY26) remained concentrated in Tier-1 city clusters, but workforce participation is increasingly expanding beyond metropolitan markets. Tier-2 cities accounted for 30% of all applicants in FY26, indicating the growing contribution of non-metro talent to India's formal workforce.
Tier-3 markets are emerging as a major opportunity, accounting for nearly 20% of active users but only 5% of job applications. This suggests strong workforce interest that has not yet fully converted into formal employment.
Emerging Hiring Hubs
New hiring hubs such as Surat, Rajkot, Nagpur, and Raipur are gaining traction alongside established centers like Ahmedabad, Pune, Chennai, and Delhi, reflecting the widening reach of India's MSME-driven economy.
Shifting Skill Demand
As MSMEs scale, their hiring mix is shifting. Sales and Business Development made up 40% of total skills demanded by MSMEs in FY26, up from 36% in FY25, making it the largest segment of skill demand. Overall hiring continued to focus on general, transferable skills, highlighting the ongoing need for customer-facing and business roles that can be used across sectors.
The most in-demand roles included Telesales, Accounting and Taxation, Field Sales, and Customer Support, reflecting sustained demand for frontline and operational talent as businesses continue to expand.
