India’s adoption of Industry 4.0 to assist the manufacturing sector contribute 25% of GDP by FY26

Industry 4.0 has reached a tipping point in Indian manufacturing, with a strong desire to boost investments in the next two years to create exceptional customer experiences and long-term business models

In India, MSMEs (Micro, Small and Medium Enterprises) account for 33% of manufacturing production and 45-50% of exports in industries such as textiles, food processing, chemicals, and electrical and electronic equipment.

The findings of a research study on the adoption of Industry 4.0 in India’s manufacturing sector were released on Tuesday by the National Association of Software and Services Companies (NASSCOM) in conjunction with Capgemini. The paper, titled ‘India Industry 4.0 Adoption: A Case to Mature Manufacturing Digitalization by 2025,’ examines India’s digital manufacturing maturity and advises raising investments, scaling up underlying technological preparedness, and enhancing capabilities.

According to the research, India’s manufacturing sector will achieve a national growth objective of $1.1 trillion by FY26. Industry 4.0 has gone through a decade of change, growing from 5% of manufacturing IT spend in 2011 ($10.5 billion) to 20% ($103 billion) by 2021.

Sharing her thoughts, Debjani Ghosh, President, NASSOM, said, “Industry 4.0 has reached a tipping point in Indian manufacturing, with a strong desire to boost investments in the next two years to create exceptional customer experiences and long-term business models. Moving forward, it will be fascinating to watch how ready the Indian manufacturing industry is to adopt and scale Industry 4.0, which is largely determined by the use cases selected, the capacity to scale Proofs of Concept, and the alignment of IT and OT capabilities.”

Ananth Chandramouli, Managing Director and Head of Capgemini’s India Business Unit, commented on the potential of Industry 4.0 to construct future networked factories: “It is evident that by 2025, more than two-thirds of the Indian manufacturing sector will embrace Intelligent Industry 4.0 and will become an Intelligent Industry. This research shows that this decade is going to experience an amalgamation of Digital Insider (sensors and embedded software in products), Digital Continuity (creating and managing virtual worlds) and Digital Convergence (digitalization of core processes in an extended ecosystem). Enterprises will begin to concentrate on new business models, and on understanding the needs of end customers so that they can innovate new products and become truly intelligent. In India, we have seen that manufacturers today are talking about holistic digital transformation.”

As per the research, countries such as the United States, the United Kingdom, China, India, and Brazil are projected to augment it with additional investments.