India must accelerate the adoption of artificial intelligence, strengthen quality standards and build resilient supply chains to achieve its ambition of becoming a globally competitive manufacturing hub amid rising geopolitical and economic uncertainties, experts have said.
Speaking at the PHD Chamber of Commerce and Industry's Conference, government officials and manufacturing executives said India’s next phase of industrial growth would depend not just on expanding production capacity but on improving quality, efficiency and technology adoption across factories.
“India is entering a defining phase in its manufacturing journey,” Nidhi Khare, Secretary, Department of Consumer Affairs, said at the event, adding that globally trusted manufacturing capabilities rooted in quality, innovation and sustainability would be essential for achieving the country’s Viksit Bharat 2047 vision.
Experts at the conference pointed to growing global supply chain disruptions, weakening investor sentiment and rising input volatility as fresh challenges for manufacturers, even as business confidence remains relatively resilient.
AI Moves From Pilot Projects To Factory Floors
The discussions come as industrial artificial intelligence gains momentum within India’s manufacturing sector, according to a report by YourNest Venture Capital and Praxis Global Alliance.
The report said Industrial AI could unlock nearly USD 150 billion in additional manufacturing output in India by 2030 without proportional capital expansion, as factories increasingly embed AI into shopfloor operations.
About 90 per cent of Indian manufacturing enterprises are already experimenting with AI across operations, though investment into Industrial AI startups remains comparatively low, the study said.
Sunil K Goyal, Managing Director and Fund Manager at YourNest Venture Capital, said enterprise adoption had moved faster than investor capital deployment.
“The end-customer is sending out a signal that is being picked by startups who are developing powerful products to make shopfloors more efficient and profitable,” he said, adding that quantifiable returns were making the segment increasingly attractive for investors.
According to the report, manufacturers deploying AI are reporting reductions of 30–50 per cent in unplanned downtime, conversion cost declines of 10–40 per cent and throughput gains of up to 30 per cent.
Kunal Singhal, Co-Chair of PHDCCI’s Manufacturing Committee, said artificial intelligence was no longer a future concept but a present-day necessity capable of transforming manufacturing efficiency and supply chains.
He said India needed to technologically strengthen its manufacturing ecosystem and transition from serving domestic demand to becoming a major global supplier.
Quality Standards Seen As Competitive Advantage
Conference participants also stressed that quality compliance and testing infrastructure would become increasingly important as India attempts to scale exports and compete with global manufacturing centres.
Sunil Mangla, Chair of the Manufacturing Committee at PHDCCI, said global markets were seeking not merely low-cost products but “low-cost quality products”, making internationally accepted testing and certification systems critical for the Indian industry.
Khare said the government was modernising testing infrastructure through faster methodologies, expanded laboratory networks, adoption of AI and robotics, and development of testing corridors.
She added that Quality Control Orders and robust standards should function as catalysts for manufacturing excellence and consumer trust rather than compliance burdens.
The conference also saw the launch of a knowledge report titled “India Manufacturing Imperative 2026-2035”, which outlined policy recommendations and a roadmap for strengthening India’s global manufacturing competitiveness.
Geopolitical Risks Cloud Industrial Recovery
The optimism around manufacturing transformation comes even as broader economic indicators point to mounting external pressures, according to an April report by DSP Asset Managers.
The report said India’s manufacturing recovery had suffered setbacks from geopolitical tensions affecting critical sectors such as steel, cement, fertilisers and crude oil.
“Manufacturing was just finding its footing, but the war has weighed on key input industries, pulling vitals below trend,” the report said.
Industrial output indicators reflected the pressure, with cement production falling 4.5 per cent year-on-year in February and steel output declining 2.7 per cent. Growth in the eight core industries contracted 8.9 per cent during the same period.
The report also highlighted softer foreign investment trends, noting that overseas investors were becoming less aggressive towards Indian markets amid global uncertainty.
Despite these challenges, business activity indicators remained relatively firm. Manufacturing PMI stood at 58.1 while services PMI came in at 58.5, both indicating expansion.
Experts at the PHDCCI conference said such uncertainties reinforced the need for India to build stronger domestic industrial capabilities, improve productivity and reduce supply chain vulnerabilities through technology-led manufacturing.
Anshuman Singhania, Co-Chair of the Manufacturing Committee at PHDCCI, said customer-centricity, technological innovation and sustainability had become essential pillars of modern manufacturing.
He added that stronger collaboration between government, industry, academia and technology institutions would be critical for accelerating productivity and maintaining global competitiveness. |
