It has been found in research that e-commerce offers a favorable ways to organizations to face the challenges of dynamic environment. To get the maximum benefit from e-commerce business, a large number of enterprises in India are adopting different innovative ideas and operating models including partnering with online marketplaces or setting up their own online stores. While Ludhiana and Jalandhar have become leading cities of Punjab in consuming products through online marketing, the local industry has been slow in adoption of e-commerce for its own market expansion. The study was conducted on 150 Micro and Small-sized Enterprises (MSEs) in Ludhiana and Jalandhar. Based on earlier studies, fifteen variables were identified as potential barriers in e-commerce adoption by small enterprises. Factor analysis was conducted to identify underlying structures among the variables in the analysis. Through this procedure three factors were identified which explained the skepticism of these two cities’ small industrialists in e-commerce adoption. Later, regression analysis was applied on these factors to study the impact that they can make on the likelihood of e-commerce adoption in the future. The results showed that these factors were significant and while, some of the problems could be resolved intrinsically by the organizations themselves; others were external barriers for which government’s intervention and collaborative efforts amongst MSEs would be required.