The modern world is inclined towards the comfort of digitalization through creative ideas and innovation. Interest in modern living and a tech-savvy lifestyle has made innovation the most important parameter for business. With the increase in business competition and from global competitors, low-cost innovative products are taking the center stage. Also, uncertain financial or natural interruptions are forcing the company to adapt to better means of producing products or providing services for their survival. Recent tension with India's biggest importer and the government's push for 'vocal for local' initiatives have made innovation a compulsory aspect to be better or at par with the importing country's product and pricing to cater to the growing demand of the domestic consumers. The study is focused on the backbone of India's economy i.e., MSMEs. Rural MSMEs are far behind their urban counterparts in the adoption of innovation in their business. The study was conducted using the responses of 223 rural MSMEs in India. IBM SPSS and AMOS were used to know the factors behind the MSMEs' adoption of innovation. The study will help the government, scholars, academicians, and institutions providing support for business innovation to chalk out a better process to cater to the needs of these MSMEs in understanding and implementing innovation in their business.