3. Capital Intensity
Initial setup costs for AI and
automation
are
high.
Without
government
incentives
or
public-private partnerships, many
SMEs find the transition daunting.
4. Cybersecurity Concerns
With increasing digitization comes
vulnerability. Manufacturing units
must now invest in AI-powered
cybersecurity, which is still nascent
in India.
5. Regulatory & Policy Uncertain-
ty
A clear, consistent policy frame-
work for AI, data usage, privacy,
and IP in manufacturing is still
evolving.
This
often
deters
long-term investment.
Government Support: Creating
the Ecosystem
The Indian government has recog-
nized the importance of Manufac-
turing 4.0 in achieving its goal of
becoming a $5 trillion economy.
Initiatives include:
• Make in India 2.0: Emphasizes
smart manufacturing as a national
priority.
• PLI
Schemes
(Produc-
tion-Linked Incentives): Encour-
aging advanced manufacturing in
sectors like electronics, auto, solar,
and pharmaceuticals.
• SAMARTH Udyog Bharat 4.0: A
national platform promoting smart
and
automated
manufacturing
practices.
• National Strategy for AI (NITI
Aayog): Lays down the roadmap
for AI adoption across sectors,
including manufacturing.
Moreover, state governments (e.g.,
Tamil Nadu, Maharashtra, Karnata-
ka) are setting up AI centers of
excellence, industrial parks, and
training hubs to promote Industry
4.0 adoption at the grassroots level.
India’s
Unique
Opportunity:
Frugal Innovation Meets AI
One of India’s greatest strengths
lies in frugal innovation doing more
with less. This philosophy is now
blending with high-tech AI tools to
produce uniquely Indian solutions.
For example:
• Low-cost automation kits devel-
oped by local startups.
• Edge AI devices for real-time
analytics in rural factories without
relying on cloud connectivity.
• Open-source software custom-
ized for Indian languages and facto-
ry floor scenarios.
These solutions allow even small
enterprises in Tier 2 or Tier 3 towns
to begin their Manufacturing 4.0
journey, democratizing the revolu-
tion.
The Human Factor: Reskilling,
Not Replacing
A frequent concern is whether AI
will displace workers. The reality in
India is more nuanced. While some
repetitive roles may vanish, AI is
also creating entirely new job
categories from AI model trainers to
IoT technicians.
To manage this transition, several
initiatives have been launched:
• Skill India 2.0 with AI and robot-
ics modules.
• Partnerships with companies
like Siemens, Bosch, and Dassault
for vocational training.
• Academic industry linkages to
introduce real-time manufacturing
case studies in engineering curricu-
la.
India's greatest asset is its people
I F
NDUSTRY OCUS
50 | June 2025 | www.industrialoutlook.in