Anshul Sharma, Lead Client Partner & Automotive Industry Leader, IBM Consulting India & South Asia, shares insights with Industry Outlook on how the nation is harnessing the power of digitalization and automation to reshape its industrial future. He discusses the strategic rise of technologies like AI, IIoT, and generative AI, and how these tools are redefining production, optimizing systems, and enabling smart factories. As India stakes its claim as a global manufacturing powerhouse, Sharma highlights the role of policy, people, and process in driving this transformation—while also acknowledging the complexities that come with such a seismic shift. His vision is clear: India’s manufacturing sector isn’t just catching up—it’s leading the charge toward a smarter, more sustainable, and innovation-driven future.
India’s manufacturing sector is at a tipping point driven by the twin forces of digitalization and automation. The nation is rapidly emerging as the world’s most promising manufacturing hub, fuelled by cost-effective production, policy-driven momentum, the capacity to manufacture high-quality products at scale, and shifting geopolitical landscape.
A surge in domestic demand and continuous flow of foreign direct investment (FDI) further amplify this growth, positioning India as a global powerhouse in industrial innovation. At the heart of this transformation are cutting-edge technologies like artificial intelligence (AI), the Industrial Internet of Things (IIoT), and data analytics, which are redefining production, optimizing supply chains, and enabling predictive maintenance.
Of late, generative AI (GenAI) is set to be the ultimate game-changer – revolutionizing operations, accelerating innovation, and empowering manufacturers to stay ahead in an increasingly competitive global landscape. With bold initiatives like the National Manufacturing Policy and Make in India, the Indian government aims to propel the sector’s GDP contribution from 17% to 25% by 2025, laying the foundation for Industry 5.0 and a future where India leads the world in smart manufacturing.
Despite its growth potential, the sector has its own set of complications. Unpredictable demand, raw material shortages, and logistical bottlenecks hinder production leading to supply chain disruptions. Then, lack of clean, structured and application-specific data often leads to quality control issues. The sector also faces high operational costs due to inefficient processes and unplanned downtime. Lack of AI expertise and technical training can slow down adoption of emerging technologies. Moreover, there is more pressure than ever to adhere to sustainability norms due to increased emphasis on ESG reporting and sustainable practices.
One of the other obstacles is securing organizational buy-in, particularly in demonstrating a compelling proof of concept (PoC). Without the support of key stakeholders, digital initiatives may remain stuck at the conceptual stage, hindering further progress.
Further, there is a need to infuse AI agents across key areas such as process optimization, predictive maintenance, supply chain, quality control, and functional domains like sales and HR. These AI-driven capabilities will enhance efficiency, agility, and innovation, empowering enterprises to scale and compete globally. This will also make it necessary for manufacturers to take ethical considerations into account to ensure responsible and fair implementation for these technologies.
The next wave of Industry 4.0 will be driven by the convergence of technologies, increased autonomy in systems, and a strong focus on sustainability. Industry 4.0 is moving towards systems that can operate with a higher degree of independence, relying on AI and machine learning to make decisions and perform tasks with minimal human intervention. Smart factories are equipped with advanced sensors, embedded software and robotics that collect and analyze data and allow for better decision making.
Digital twins as a concept will play a key role in advancing Industry 4.0, to test out scenarios and configurations before deployment as well as to enable maintenance remotely. Smart factories will enhance use 3D printing to manufacture complex parts and components quickly, precisely and economically.
Finally, the ability of quantum computers to process and analyse more complex and larger amounts of data can enhance accuracy of predictions and insights, by which manufacturing organizations can make better decisions in real- time. This can optimise and augment multiple areas of the industry including supply chain, manufacturing processes, automation and others.
In short, the future holds immense promise for India’s manufacturing sector. The technology advancements will not just enhance efficiency but also unlock unprecedented levels of productivity and profitability. It is upon the manufacturers to ensure that their strategies and processes are well-integrated with digital advancements to maximize the benefits of transformation.
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