The purpose of the study is to analyze the opportunities and the challenges associated with the adoption of Information technology in the Indian SMEs. The significant usage of Information Technology in the SME sector and the factors that influence the business are discussed. SME industry in India has shown substantial growth over the past few years. The implementation of new technologies tends to offer better opportunities to the companies particularly for SME sector in India. However, there are a few challenges associated with technology adaptation that needs attention. This research is focused on improved business quality and responsiveness towards market opportunities while using the latest technologies available. This study is based on a review of research journals and articles including news magazines concerning current SME market situation in India. The current market scenario of Indian SMEs, as well as several policy interventions and new trends in the market were discussed.