The AP MSME Digital Empowerment Challenge 2025 has been launched to empower Micro, Small, and Medium Enterprises (MSMEs) through advanced Artificial Intelligence (AI) and digital solutions.
Organized by the Andhra Pradesh Innovation Society in collaboration with the Ministry of Micro, Small and Medium Enterprises, Government of India, the initiative seeks to accelerate MSME digital transformation, enhance competitiveness, and unlock access to finance and global markets.
AP MSME Digital Empowerment Challenge 2025 to Bridge Digital Gaps
MSMEs form the backbone of India’s economy, with over 7.34 crore enterprises contributing 30.1% to the nation’s Gross Value Added (GVA) and generating livelihoods for more than 11 crore people. The sector also drives nearly 45.79% of India’s exports – valued at over ₹12.39 lakh crore in FY 2024–25.
Despite this growth, MSMEs continue to face constraints such as limited credit access, weak documentation, and compliance hurdles. Moreover, 59% of MSMEs have yet to adopt AI technologies, primarily due to high implementation costs and low digital awareness.
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The AP MSME Digital Empowerment Challenge 2025 aims to bridge these challenges by fostering collaboration between innovators, startups, and enterprises to create AI-driven, scalable solutions.
Strengthening Andhra Pradesh’s MSME Ecosystem
Home to nearly 18 lakh MSMEs, Andhra Pradesh ranks among India’s top states in enterprise density and industrial growth. The government’s proactive approach – including the establishment of MSME parks, digital facilitation programs, and the AP MSME ONE Portal – has laid a strong foundation for innovation-led expansion.
Recent surveys indicate that while over 91% of MSMEs in the state recognize the importance of AI, adoption barriers remain significant.
The AP MSME Digital Empowerment Challenge 2025 directly addresses this by inviting startups, researchers, and technology providers to co-create practical, AI-based solutions that strengthen MSME capabilities.
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National Innovation Challenges for Digital Empowerment
Under this initiative, the Andhra Pradesh MSME Development Corporation has introduced three national challenges:
- AI-Based Tool for Detailed Project Report (DPR) Preparation – to automate high-quality, bankable proposals, improving credit and investment access.
- AI-Powered Chatbot for MSME ONE Portal – to provide multilingual, real-time support for entrepreneurs.
- SaaS-Based Cross-Border Export Console for MSMEs – to simplify documentation, compliance, and readiness assessments for exporters.
These innovation challenges aim to position Andhra Pradesh as a national testbed for MSME digital transformation and AI adoption.
Awards and Application Details
As per Government Orders (G.O.Ms.No.33), winning teams in the AP MSME Digital Empowerment Challenge 2025 are eligible for direct government work orders worth up to ₹1 crore.
Additionally, under G.O.Ms.No.2, procurement norms have been relaxed for projects valued up to ₹50 lakh, encouraging wider participation.
- Eligibility: Students, startups, MSMEs, researchers, and service providers across India.
- Submission Deadline: October 27, 2025
- Application Portal: https://apisinnovationchallenges.ap.gov.in
Data sets for each use case are available via the official drive link for participant reference.
