Cloud computing is an internet-based computing which lets users acquire knowledge, products and services they need for business. In developing countries, SMEs (Small and Medium-sized Enterprises) are the nurturing grounds for entrepreneurs and major contributors of economic growth. Indian enterprises are gradually changing their perception of IT (Information Technology) by adopting the flexible and global way of accessing data anytime and anywhere. This paper investigates the usage of cloud computing by SMEs in India. The study involves quantitative techniques for collecting and analysing data from 120 SMEs that have adopted cloud computing as their business strategy. These SMEs belong to various sectors including finance, education, government, healthcare, IT, etc., from 6 cities of India. The findings reveal that majority of SMEs demand services of cloud. But at the same time, it is also found that SMEs are more worried about security, interoperability and vendor lock-in issues of cloud as these services are accessed over internet. As cloud computing evolves, more SMEs in India may adopt it as a default method of IT delivery and consequently remove the barriers of the digital divide in developing countries.