The Micro, Small and Medium Enterprises have been significantly contributing in the socio-economic development of India since last five decades. It is the second largest employment generator after agriculture with over 110 million people working across nearly 63 million MSMEs. It produces more than 6000 products for both domestic and global market and contributed 30% of India’s GDP and almost 50 % in the total export during 2018-19. MSME sector has proved to be a dynamic sector by expanding itself in to wide range of products and services in various industries. But the pace of growth has been greatly affected after sudden breakout of Covid-19. The world was not prepared in any way to address the problems and disruption created by pandemic since its very nature of unpredictability. MSMEs are considered to be the most vulnerable in India as they are unorganised and majority of them have paucity of funds. The MSMEs have encountered with the new set of problems after Covid, such as immediate shift to digital platform, declined demand, extended lockdown etc. on the other hand it has also provided room for improvement and sustainability among MSMEs by giving them opportunity to accelerate the process of digitalisation, opening up the global market, increased productivity and reduction in the cost. The present paper discusses the set of such challenges and opportunities posed by Covid-19 to ponder in to the possible solution.

KEYWORDS: Effect of Covid-19, MSMEs, Challenges and Opportunities, Digitalisation.