As the world accelerates toward intelligent, autonomous production, India has the opportunity to leapfrog into a manufacturing leader by embracing AI-driven manufacturing at scale.

Industrial AI is no longer a futuristic concept, it has emerged as a necessity. Recognising the impact, 12% of manufacturing companies were using AI in July 2024, a recent McKinsey survey shows. By embedding AI into manufacturing workflows through tools like collaborative robots (cobots), autonomous mobile robots (AMRs), and automated guided vehicles (AGVs), manufacturers can move beyond traditional automation. These technologies enable real-time data analysis, predictive maintenance, and dynamic production adjustments that significantly improve throughput, quality, and safety.

Energy management, a top concern for manufacturers worldwide, is another critical area where smart manufacturing delivers value. AI-powered solutions enable real-time monitoring of energy usage, predictive load balancing, and efficient resource allocation, all of which contribute to sustainability and ESG goals.

The adoption of AI, automation, and machine learning is projected to surge in the next five years, as the technologies transcend from being deployed just for cost optimization to also becoming tools essential for combating talent shortages and closing persistent skills gaps in the manufacturing workforce.

The World Economic Forum’s whitepaper, Beyond Cost: Country Readiness for the Future of Manufacturing and Supply Chains, recognises India’s growing competitiveness in key verticals like light vehicle production, electronics, and textiles. It is thus time that India reassesses its readiness to become a global smart manufacturing hub.

Micro, small, and medium enterprises (MSMEs) in India contribute to 36% of the country’s manufacturing output and will play a vital role in driving future growth. For Indian MSME manufacturers, embracing AI and smart manufacturing technologies can enhance efficiency, quality, and innovation while enabling better decision-making. Smart manufacturing is a crucial step toward achieving manufacturing excellence, improving competitiveness, and fostering growth in the global market.

Moving forward, the country must confront on-the-ground challenges directly, with the foremost being the skills gap, especially in semi-urban and rural areas where digital literacy and technical expertise are lacking. Additionally, strong policy support in the form of subsidies and tax breaks to industry and public-private investments to build a robust digital infrastructure addressing data privacy concerns are the need of the hour.

The government has laid a robust foundation for the future through visionary initiatives such as the National Mission on Interdisciplinary Cyber-Physical Systems (NM-ICPS), the National Programme on Artificial Intelligence, and Anusandhan National Research Foundation (ANRF). The NM-ICPS is dedicated to seamlessly integrating AI into manufacturing processes, paving the way for smart factories that drive unprecedented levels of efficiency and innovation. The National Programme on Artificial Intelligence is committed to creating groundbreaking AI solutions and championing the ethical and transformative application of AI across diverse sectors, particularly in manufacturing. This comprehensive approach includes strategic skill development, effective data management, and the establishment of a national centre for AI. The ANRF seeks to initiate, develop, and promote research and development (R&D), while fostering a culture of research and innovation across India’s universities, colleges, research institutions, and R&D laboratories.

India’s active participation in the Global Partnership on Artificial Intelligence (GPAI) and its leadership of the GPAI New Delhi Declaration on Safe, Secure, and Trustworthy AI further highlight its commitment to building a responsible and globally aligned AI ecosystem.

The global manufacturing landscape is evolving from automation to autonomy – a shift where machines adapt, learn, and optimise in real time, augmenting factories with intelligent systems that increase operational resilience, precision, and sustainability. Beyond efficiency and returns, autonomous manufacturing represents a bold step forward in building agile, future-ready industrial ecosystems where human intelligence and machine intelligence work in tandem, driving outcomes that were previously unattainable.

India has successfully demonstrated its digital leap in sectors like telecommunications and fintech. Now, manufacturing is poised to follow the suit. With supportive policy frameworks, a large and agile workforce, and growing digital maturity, it has the right ingredients to become a global smart manufacturing powerhouse.

This article is authored by Dilip Sawhney, managing director, Rockwell Automation India.