This research paper investigates the influence of digital transformation on Micro, Small and Medium Enterprises (MSMEs) in India, with special emphasis on the Agra MSME sector. The study employs mixed-method research approach to examine the present status of digital transformation and identify critical factors influencing its adoption among MSMEs in Agra. Findings reveal that while 90% of MSMEs have adopted digital payment systems, only 13% actively utilize e-commerce and digital marketing platforms. The study identifies key facilitating factors (leadership support, government initiatives, competitive pressure) and barriers (financial constraints, skill gaps, infrastructure deficiency) to digital transformation. The research contributes to understanding the nuanced digital adoption landscape in regional MSME ecosystems and provides policy recommendations for accelerating digital maturity among small enterprises in Uttar Pradesh.