Smart Factories, Smarter Future: Transforming India's Industrial Landscape

India's manufacturing sector is undergoing a smart transformation, powered by automation, AI, and digital connectivity. As smart factories take shape, they promise to boost productivity, sustainability, and global competitiveness.

- Kaushal Dighavkar

India's manufacturing industry is poised for a digital revolution. Industry associations point out that over two-thirds of Indian manufacturers will have adopted digital change by 2025, contributing towards the ambitious goal of pushing the share of manufacturing in GDP to 25 per cent. The Confederation of Indian Industry (CII) states that frontier technologies like the Internet of Things (IoT), artificial intelligence (AI), machine learning, robotics and automation are "transforming the manufacturing sector, facilitating optimisation, innovation and international competitiveness". With government initiatives like Make in India, Production-Linked Incentive (PLI) schemes, and the SAMARTH Udyog Bharat 4.0 programme preparing the way for Industry 4.0, Indian factories are getting ready for a smarter future.

Governments and industry leaders are both driving digitalisation. New initiatives are sector-targeted PLI schemes (for electronics, electric vehicles, machinery and so on) that address India's longstanding high cost of capital by providing 4-6 per cent inducements on incremental production. In late 2024, four SAMARTH Udyog Bharat 4.0 hubs (at IIT Delhi, Pune, and Bangalore) and ten "hub-and-spoke" Industry 4.0 centres across the country were announced by the Ministry of Heavy Industries. These centres provide training and consultancy in IoT, data analytics, and other smart technologies for both big companies and MSMEs. Meanwhile, CII's recent study shows manufacturers planning to boost technology budgets from under 10 per cent of revenue to 11-15 per cent in the next two years, with spending focused on IoT, robotics and big data. These shifts signal a new investment era aimed at productivity and quality gains.

Key Technologies Fueling Smart Factories