Indian Manufacturers Embrace AI and IoT, Yet Tech Budgets Remain Low

Tech to drive India's manufacturers growth: Survey

Indian manufacturers are increasingly utilizing technologies such as IoT, AI, ML, robotics, and automation to boost profitability and global competitiveness. Despite this, many firms are dedicating less than 10% of their budgets to technology. The report anticipates a rise in tech investments to 11-15% within two years, driven by high-capital industries leading the way.Majority of Indian manufacturers are embracing technology as a catalyst of future profitability and global competitiveness. However, a significant share of companies are allocating less than 10% of their budgets to technology, according to a study by the Confederation of Indian Industry (CII). India's manufacturing sector is going through a transformation, fueled by adoption of technologies such as Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning (ML), robotics, and automation. This transformation can support the goal of increasing manufacturing's contribution to India's gross domestic product to 25% in the next few years, according to the report titled 'Smart Manufacturing: Unlocking India's Potential'. "By embracing these advancements, the country can gain a competitive edge globally and establish itself as a manufacturing leader," said Deepak Shetty, Chairman of the Council on Manufacturing Excellence, CII and CEO & Managing Director, JCB India Limited. The survey covered enterprises of varying sizes, ranging from ₹5 crore to over ₹24,000 crore. In the next two years, sectors aim to allocate 11-15% of their budgets towards technology investments to boost efficiency and innovation, the report mentioned. While high-capital industries like semiconductors, aerospace, and automotive are leading the way in adopting advanced technologies, traditional sectors like textiles and food processing are taking longer to embrace digitalisation, it added. The manufacturing sector is undergoing a transformative moment, where advanced technologies are reshaping processes and addressing challenges like supply chain visibility to drive industrial excellence, said Deepak Jain, Co-Chair of the Council on Manufacturing Excellence, CII and Chairman, Lumax Group. The report also outlined several barriers to technology adoption.

Indian manufacturers see technology adoption as key to profitability, yet allocate less than 10% of budgets

Most manufacturers recognise technology adoption as a critical driver of profitability and competitiveness, but current investments remain modest, with many allocating less than 10 per cent of their budgets, stated a Manufacturing Competitiveness Study of Confederation of Indian Industry (CII). However, the report added that a shift towards higher investment--targeting 11-15 per cent of budgets--is expected in the next two years, particularly in Internet of Things (IoT), robotics, and Big Data. Challenges such as high costs, unclear Return on Investment, and the integration of legacy systems persist, especially for small and medium enterprises (SMEs), it said. Additionally, the report underscores the urgent need for workforce upskilling to bridge the skills gap and enable seamless adoption of advanced technologies. The Confederation of Indian Industry (CII) released Manufacturing Competitiveness Study, focusing on the transformative impact of smart technologies on India's manufacturing sector. The report, titled 'Smart Manufacturing: Unlocking India's Potential,' highlights the sector's ongoing digital transformation and its critical role in achieving the ambitious goal of increasing the manufacturing GDP share to 25 per cent in the near future. The report showcases how cutting-edge technologies such as the Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning (ML), robotics, and automation are reshaping the manufacturing landscape, driving optimization, innovation, and global competitiveness. High-capital industries like Semiconductors, Aerospace, and Automotive are leading the charge in adopting these technologies, while traditional sectors like Textiles and Food Processing are gradually transitioning towards digitalization. To address 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. Speaking about the report, Deepak Shetty, Chairman of the Council on Manufacturing Excellence, CII and CEO & Managing Director, JCB India Limited, said, "India's manufacturing landscape is undergoing a significant transformation, driven by the rapid adoption of innovative technologies." Deepak Jain, Co-Chair of the Council on Manufacturing Excellence, CII and Chairman, Lumax Group, said, "This report highlights a transformative moment for India's manufacturing sector, where advanced technologies are reshaping processes and addressing challenges like supply chain visibility to drive industrial excellence."