This report examines the digital transformation of Small and Medium Enterprises (SMEs) in India. It explores the theoretical background, including the technologies used, such as big data and the Internet of Things, and the factors influencing digital transformation, both internal and external. The research methodology includes a questionnaire-based study among SME entrepreneurs. The analysis focuses on the demographic profile of respondents, descriptive statistics, correlation, and regression to determine the relationship between digital transformation factors and SME performance. The findings reveal that external and internal attributes, except for capabilities fit, strongly relate to business performance, with external attributes having a greater impact. Specifically, external capabilities and resources fit significantly impact business performance. The report concludes with insights into how SMEs can leverage digital transformation to improve their performance.