The study also noted that challenges remain, including high costs, unclear return on investment, and the integration of legacy systems, which are especially pertinent for small and medium enterprises (SMEs).
While many manufacturers acknowledge that the adoption of technology is essential for increasing profitability and competitiveness, current investment levels are modest. A Manufacturing Competitiveness Study conducted by the Confederation of Indian Industry (CII) found many companies dedicating less than 10 percent of their budgets.
The report, titled ‘Smart Manufacturing: Unlocking India’s Potential’, indicated that a transition towards increased investment, aiming for 11-15 percent of budgets, is expected over the next two years, with a particular focus on the Internet of Things (IoT), robotics, and Big Data.
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It also noted that challenges remain, including high costs, unclear return on Investment, and the integration of legacy systems, which are especially pertinent for small and medium enterprises (SMEs).
The report further emphasises the critical importance for workforce upskilling to address the skills gap and facilitate the smooth adoption of advanced technologies.
The report also highlights the continuous digital transformation within the manufacturing sector in India, and its essential contribution to the ambitious objective of raising the manufacturing GDP share to 25 percent in the near future.
The report demonstrates the transformative impact of advanced technologies, including the Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning (ML), robotics, and automation, on the manufacturing sector. These innovations are increasing efficiency, fostering creativity, and bolstering global competitiveness. High-capital industries such as Semiconductors, Aerospace, and Automotive are at the forefront of this technological adoption, whereas more traditional sectors such as textiles and food processing are slowly moving towards digital transformation.
To overcome these barriers, the study recommends fostering public-private partnerships to establish shared technology hubs, increasing budget allocations for technology, strengthening industry-academia collaboration, and implementing supportive policies to encourage broader adoption of smart manufacturing.
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“The manufacturing sector is undergoing a profound transformation, driven by rapid technological advancements that are reshaping how companies operate, produce, and compete. As the Confederation of Indian Industry (CIl) presents the second part of the Manufacturing Competitiveness Study, with a focus on technology, the study underscores the pivotal role that technology plays in driving both productivity and resilience in the manufacturing ecosystem. Technology is no longer merely an enhancement; it is now a central enabler that determines a manufacturer’s competitiveness on the global stage,” said Chandrajit Banerjee, Director General, CII.
“This report, focusing on technology, marks a significant milestone in our ongoing efforts to bolster the manufacturing sector’s resilience and competitiveness in an ever-evolving global landscape.” said Deepak Shetty, Chairman of the Council on Manufacturing Excellence, CII and CEO & Managing Director, JCB India Limited, adding that India must seize this opportunity to transform challenges into avenues of growth and collaboration, ensuring that our manufacturing sector not only meets the demands of today but also thrives in the landscape of tomorrow.
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India stands to significantly improve its position in global value chains by capitalising on advancements in smart manufacturing. This shift is expected to generate increased employment opportunities, improve product quality, and stimulate economic growth. Additionally, the government’s commitment to initiatives such as Make in India, the Production Linked Incentive (PLI) Scheme, Digital India, SAMARTH Udyog Bharat 4.0, the National Mission on Interdisciplinary Cyber-Physical Systems, and the India AI Mission has established a solid foundation for a competitive and resilient manufacturing sector.
The CII intends to collaborate closely with the Government to position India as a reliable global manufacturing hub by implementing initiatives that address skill gaps, reduce cost barriers, and encourage the adoption of technology.
