Smart Manufacturing Industry 4.0 Market in India 2023 Part-I

Smart Manufacturing
(Industry 4.0) Market in

India 2023 (Part-I)
MARCH 2023
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Table of Contents
Chapter 1: Chapter 4: Chapter 6:
Executive Summary Government Initiatives
Smart Manufacturing (Industry 4.0) Market in India –
1.1. Executive summary 6.1. Government initiatives
An Overview
6.2. International collaborations
4.1. Manufacturing market –An overview
4.2. Indian manufacturing market – An overview
4.2. IoT in manufacturing market in India overview
4.2.1. Market size and growth forecast based on value
Chapter 2: (FY 2021– FY 2027e) Chapter 7:
Socio-economic Indicators 4.3. Smart manufacturing components Market Influencers
2.1. Socio-economic indicators 7.1. Market drivers
4.4. Indian IT industry and smart marketing
7.2. Market challenges
4.5. Indian Manufacturers Spending on Industry 4.0 (2021)
4.4..Smart manufacturing market in India – Market adoption
by sector
Chapter 3: Chapter 5: Chapter 8:

Introduction Impact of COVID-19 Market Trends
3.1. Market definition and structure 5.1. Impact of COVID-19 8.1. Industry 4.0 software trends
8.2. Industry 4.0 hardware trends
8.3. Industry 4.0 connectivity trends
| SMART MANUFACTURING(INDUSTRY 4.0) MARKET IN INDIA 2023 2

Table of Contents
Chapter 9: Chapter 9:
Competitive Landscape Competitive Landscape(Continued)
9.9. Rockwell Automation
9.1. Tata Consultancy Services Limited
9.10. Universal Robots (India) Private Limited
₋ Company information
₋ Business description
₋ Products/Services
₋ Key people
₋ Financial snapshot Chapter 10:
₋ Key business segments
Recent Developments
₋ Key geographical segments 10.1. Recent developments
*Financial and market segments information
covered only for public companies
9.2. Abee Research Labs Private Limited
9.3. Entrib Analytics Technology Private Limited
9.4. LivNSense Technologies Private Limited Chapter 11:
9.5. Altizon Systems Private Limited Appendix
9.6. IBM India Private Limited 11.1. Research methodology
9.7. Microsoft Corporation India Private Limited 11.2. About Netscribes
9.8. Omron Automation Private Limited 11.3. Disclaimer
| SMART MANUFACTURING(INDUSTRY 4.0) MARKET IN INDIA 2023 3

Chapter 1: Executive Summary

Executive Summary
• The manufacturing industry in India is gradually shifting towards more automated and digitized manufacturing, which is expected to increase productivity
and efficiency
• Smart factory, smart supply chain, smart work force, and smart solutions with disruptive technologies used in manufacturing, constitute important
Market overview components of smart manufacturing
• The Internet of Things (IoT) in manufacturing market in India was valued at INR 422.57 Bn in FY 2022. It is expected to reach INR 774.90 Bn by FY 2027,
expanding at a compounded growth rate of 13.32% during the FY 2023 – FY 2027 period
Drivers Challenges
Drivers and • Government support towards technology adaption • Technical skill gap
• Rising consumer demand for mass customization • Unrealistic expectations regarding digital transformation
challenges • Ease of foreign direct investment (FDI) in manufacturing • High-cost constraints for the adoption of smart manufacturing
• Fierce competition in the manufacturing sector in India
• Social distancing norms and the nationwide lockdown imposed by the government, which induced travel restrictions, migration of laborers, and supply chain
Impact of disruptions, created a multi-pronged negative effect on the manufacturing industry
COVID-19 • The pandemic accelerated the process of digital transformation in manufacturing
Major players
Abee Research Labs Private LivNSense Technologies Private
Tata Consultancy Services Limited IBM India Private Limited
Competitive Limited Limited
landscape Microsoft Corporation India Universal Robots (India) Private
Omron Automation Private Limited Rockwell Automation
Private Limited Limited
| SMART MANUFACTURING (INDUSTRY 4.0) MARKET IN INDIA 2023 5

Chapter 2: Socio-economic Indicators

Socio-economic Indicators
Total population
1.438 1.451
1.411 1.425
1.383 1.397
1.354 1.368
1.324 1.339
Bn
1.309
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Population density
483.9 488.3
479.3
Persons per sq. km
470 474.7
460.4 465.2
450.4 455.4
440.3 445.4
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Socio-economic Indicators (Continued)
Sex ratio of total population Population based on age-group
Males per 100 females 0-14 15-24 25-49 50+

107.8
107.6 16.10%
17.10% 19.40% 21.20%
107.4
Axis Title
34.10% 35.30%
36.40%
37.30%
107.1
19% 18.50% 18% 17.30%
30.80% 28.40% 26.20% 24.20%
2010 2015 2020 2025 2010 2015 2020 2025

Axis Title
Urbanization trend
Urban Rural
67.20% 66.80% 66.40% 66% 65.50% 65.10% 64.60% 64.10% 63.60% 63.10% 62.60%
33.20% 33.60% 34% 34.50% 34.90% 35.40% 35.90% 36.40% 36.90% 37.40%
32.80%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Total fertility rate (children per woman) Infant mortality rate (deaths per 1,000 live births)
2.4 39
32
No. of infant deaths

No. of children
27
2.24
2.14
2010-2015 2015-2020 2020-2025 2010-2015 2015-2020 2020-2025
Number of births Number of deaths

124.4
52.4
121.2 48.7
Mn
Mn
119.7 46.2
2010-2015 2015-2020 2020-2025 2010-2015 2015-2020 2020-2025

Combined literacy rate
Male Female Overall
82.10%
75.30% 74%
64.80% 65.50%
53.70%
2001 2011
Rural literacy rate Urban literacy rate

Male Female Overall Male Female Overall
86.30% 89.70% 85%

78.60% 79.90% 79.90%
70.70% 68.90% 72.90%
58.70% 58.80%
46.10%
2001 2011 2001 2011

Gross domestic product (GDP) growth rate Total Foreign direct investment (FDI) inflows
6.79% 6.53% 81.97

GDP growth rate compared
74.39
4.04%
60.97 62.00
to previous year
USD Bn
2017 2018 2019 2020
-7.25%
FY 2018 FY 2019 FY 2020 FY 2021
Average consumer price index (CPI) inflation Unemployment rate
9.63% 7.11%
5.41% 5.33% 5.27%
5.24%
4.00% 3.69%
2017 2018 2019 2020 2017 2018 2019 2020

Access to safe drinking water (by Indian households)
Urban Rural Total

90.0% 91.4%
82.7% 85.5%
73.2% 77.9%
2001 2011
Exchange rate
Period maximum Period average Period minimum
73.87
68.36 70.79 72.34
66.11 63.62 63.37
61.38
74.1 73.94 78.62
INR vs USD
64.18 67.20 65.13 68.45 70.43
74.41 72.41 76.93 76.39 83.03

67.15 68.88 68.39
2015 2016 2017 2018 2019 2020 2021 2022

Chapter 3: Introduction

Market Definition and Structure
• Smart manufacturing is a technology-driven approach that monitors the manufacturing processes, and responds real time to the fluctuating production environment, supply networks,
and customer demand by utilizing information technology and operational technologies
• It is a more holistic approach to optimize supply chain, product lifecycle and quality control in manufacturing
▪ Smart Factories are one of the application of smart manufacturing. Smart factory is more related to automation of the shop floor.
▪ Smart manufacturing is the implication of industrial revolution 4.0 concept, aimed to focus mainly on the use of technologies (AI, cloud, big data analytics, and others) to automate
and optimize production processes
▪ Internet of Things (IoT) involves interrelated machines that transfer data over the internet with/without human intervention
▪ IIoT is a subset of IoT and its application for industrial automation
• Sensors are also embedded in manufacturing machines to collect data on operational status and performance during a deployment
Smart manufacturing
Discrete manufacturing Process industries Automotive Power, energy and utilities Consumer products
excluding automotive
Focus of the report

Market Definition and Structure (Continued)
Smart manufacturing
Information Technology Products and Services (comprising hardware, software , services and, connectivity technologies )
Disruptive technology concepts are applied in manufacturing processes
Cybersecurity Additive Manufacturing Digital Twin Internet of Things(IoT)
Augmented, Virtual and

Sensors Big Data Cloud Computing
Mixed Reality
Robotics Process
Artificial Intelligence 5G Advance Robotics
Automation
Machine learning Probabilistic method Embodied intelligence Search and optimization
| SMART MANUFACTURING (INDUSTRY 4.0) MARKET IN INDIA 2023

Market Definition and Structure (Continued)
Industrial Revolution
Industry 1.0 Industry 2.0 Industry 3.0 Industry 4.0 Industry 5.0
• Artificial Intelligence to
• Water and steam power • Electrical power • Automation • Internet of Things (IoT) achieve personalization
• Mechanical manufacturing • Manufacturing assembly • Robotics • Artificial intelligence and at mass scale
facilities line • Telephones machine learning • Use of collaborative
• Weaving loom • Mass production of • Computers and • Cloud computing robots
water, gas, roads electronics • Cyber physical systems • Green manufacturing

Chapter 4: Market Overview

Manufacturing Market – An Overview
India and global manufacturing market- Overview
Manufacturing share by country in 2022

• In 2022, the Indian manufacturing output accounted for a share of 3.30% of the global market
• Agricultural products, textiles, engineering goods, leather products, and chemicals
manufacturing supports the contribution of the country
• India is gradually shifting towards automated and digitized manufacturing
• Manufacturing industry is also focusing on areas such as robotics and automation to be
China competitive at a global level
United States 7.20% 5.80%
Japan
3.30%
Germany
3.00% 2.30%
India
South Korea 16.60% 1.90% • In Asian subcontinent, South Korea, accounts for around 3.0% of the market, and falls behind India
7.50% • China has surpassed the United States in manufacturing output, and accounts for 28.40% of global
Italy
1.80% manufacturing output
France ▪ The exports of consumer items from China (clothing, electronics, and textiles) contributes to
1.50% its high manufacturing share
United Kingdom 28.40% • The contribution of Asian countries in global manufacturing is projected to increase further acting as a
Mexico catalyst to technology investments in the countries including India

Indian Manufacturing Market – An Overview
Indian manufacturing market
• Indian manufacturing is highly diverse with industries such as automobiles, chemicals, textiles, steel, pharmaceuticals and electronics
• It is pertinent for the Indian manufacturing industry to embrace the advancement in manufacturing operations to cater to the demand-driven economy and sustain external
competition
• The manufacturing industry has been marked by high-labor cost, lack of standardization, favorable startup culture, strong inflow of Foreign Direct Investments (FDI) in the country
▪ The manufacturing sector in India is projected to achieve 25% share of GDP by 2030
• Therefore, to improve competitiveness and revitalize the manufacturing sector, the manufacturers have started to focus on improving productivity through technological upgrading and
promoting vertical integrations in the industry
Indian manufacturing industry
Printing and
Leather and related Rubber and plastics Computer, electronic Other transport
Food products reproduction of
products products and optical products equipment
recorded media
Wood and products of Repair and Installation

Coke and refined Other non-metallic
Beverages wood and cork, except Electrical equipment of machinery and
petroleum products mineral products
furniture equipment
Other manufacturing –
Chemicals and chemical Machinery and (jewelry, bijouterie and
Tobacco products Furniture Basic metals
products equipment n.e.c. related articles, musical
instruments, sports
Fabricated metal goods, games and toys,
Pharmaceuticals, medical and dental
Paper and paper products, except Motor vehicles, trailers
Wearing apparel medicinal chemical and instruments and
products machinery and and semitrailers
botanical products supplies)
equipment

IoT In Manufacturing Market In India – Overview
Market size and growth forecast based on value (FY 2021-FY 2027e )
774.90
675.59
593.98
526.38
469.97
422.57
382.47
FY2021 FY2022 FY2023e FY2024e FY2025e FY2026e FY2027e
IoT and Smart manufacturing
• The IoT in manufacturing market in India was valued at INR 422.57 Bn in FY 2022. It is expected to reach INR 774.90 Bn by FY 2027, expanding at a compounded growth rate of 13.32%
during the FY 2023 – FY 2027 period
• A strong IoT in manufacturing market will contribute to the adoption of smart manufacturing in India
• The major drivers of IoT in India's manufacturing sector have been the southern cities of Bangalore, Chennai, and Hyderabad
• A further pull factor for the southern portion of the country's IoT manufacturing sector is being created by newly developed towns like Kochi, Thiruvananthapuram, Coimbatore,
Visakhapatnam, Mysore, and Kozhikode
• IoT in manufacturing includes the application of predictive maintenance, business process optimization, asset tracking & management, logistics & supply chain management, real-time
workforce tracking & management, automation control & management in the area of manufacturing

Smart Manufacturing Market Components
• Smart supply chain systems combine industry 4.0 smart solutions like artificial intelligence, machine learning, the Internet of Things, blockchain, and
cloud computing
Smart Supply
• States including Telangana, Himachal Pradesh, Uttarakhand, Arunachal Pradesh, Meghalaya have been conducted drone delivery of essential
Chain medicines during lockdown imposed during Covid-19 pandemic
▪ As part of its "Medicine from the Sky" project, Telangana employed drones to deliver medical supplies in the Vikarabad area in September 2021 at
BVLOS (beyond the visual line of sight)
• Currently, India presents an uncovered potential for the players to invest in the establishment of smart factories in the country and gain competitive
edge
Smart Factory • The Reliance Industries complex in Jamnagar, the Asian Paints facilities in Mysore, Rohtak, and Khandala, as well as the L&T heavy engineering
facilities for the defence, aerospace, and nuclear industries in Hazira, Talegaon, Powai, Ranoli, and Coimbatore, already meet the standards for smart
factories
• Digital transformation has also positively impacted the productivity of the organization’s workforce
• The idea of smart manufacturing opens a variety of positions for tech-savvy workers who will develop and incorporate the technology and evaluate
Smart Workforce the output data
• According to NASCOM, Indian manufacturing invested USD ~6.5 billion on the manufacturing sector's digitization in FY 2021
• As reported by the Telecom Sector Skill Council (TSSC), in India, the shift to 5G technology will create ~ 22 million skilled workers by 2025
• Smart solutions involve :

▪ Autonomous robots, 3D simulation, Industrial Internet of Things, Cybersecurity, Additive manufacturing, Augmented reality, Big data and analytics,
Smart Solutions Digital Twins and others

Indian IT Industry and Smart Manufacturing
Impact of Indian IT industry, SMEs
Indian smart manufacturing is not as prominent as compared to

developed nations; however, it is developing with improving Acceptance of the industry 4.0 trend in India is directly influenced
technology and digital infrastructure by the IT and the infrastructure industry in India
▪ The Indian government has allocated INR 165,490 Mn to • Tier-1, tier-2, and tier-3 cities in India exhibit a regional disparity
Electronics and Information Technology’ department for 2023- between infrastructure development and industrial advancement
2024 • To fully leverage the benefits of Industry 4.0, a robust and
▪ The budgetary resources will entice businesses to support the efficient ICT infrastructure capable of handling data in real-time,
growth and implementation of cutting-edge technologies ensuring communication between machines is required
including cloud computing, artificial intelligence, machine
learning, and the Internet of Things, which will support the smart
manufacturing implementation in the country
Venture capital firms made several notable investments in the

Indian AI start-ups serving the manufacturing industry, and High-cost constraints for the SMEs
proportional increase in overall AI spend on AI in the country
• IBEF projects increase in spending on AI in India at a compound • Startups, SMEs are hindered by a lack of access to capital which
annual growth rate (CAGR) of 39%, totaling INR 871,090 Mn by forces them to rely on traditional practices
2025 • SMEs operate as captive industries, supplying specific
• These fundings provide financial support to Indian companies to components to large industries, limiting their ability to invest in
further develop their products, expand existing teams, and advance technologies and automation
increase net sales • Collaboration with larger organizations can reduce financial
barriers such as high interest rates and allow access to additional
funding

Smart Manufacturing Market – IT Spend
Indian manufacturers spending on industry 4.0 in 2021
• In 2021, about 25% of the Indian manufacturing • The major investments made by the manufacturers were
Industry 4.0 Spend was done by discrete made in Cloud, IoT, big data and in technologies to
manufacturers, while the process manufacturers 25% enhance the connectivity of the network such as 4G, 5G,
accounted for 25% of the total Industry 4.0 spend Wi-Fi 6
in India • Investments in robotics, machine vision and augmented
2021 technologies also grabbed the interest of the investors
75%
• In India, there is a dearth of capital investment in the
• By leveraging the expertise in software research and development of AI as compared to other
development and IT services, the IT industry Discreate Manufacturing Process Manufacutring countries such as the US, China, Germany, South
supports manufacturing to adopt industry 4.0 Korea, and Japan
technologies and transform manufacturing • These nations have invested significantly for the
operations Discrete development of AI systems, technologies, and
Process Manufacturing infrastructure in various industries
Manufacturing
• Drugs
• Automotive
• Chemical
• Electrical/ Equipment
• Food Processing
• Electronics
• Cement
• Textile

Smart Manufacturing Market in India – Market Adoption by Sector
Smart factory adoption (2017 – 2018 and 2019 – 2023)
2017-2018 2019-2023
42% 44%
41% 40%
37%
30% 30% 32% 30%
29%
Discrete manufacturing excluding Process industries Automotive Power, energy, and utilities Consumer products
automotive
Current market adoption scenario
• The automotive industry led the way in the adoption of smart factories from 2018 to 2023, with a rate of 14.0%, followed by other discrete manufacturing at 13.0%, process
industries at 11.0%, power, energy, and utilities at 8.0%, and consumer products at 7.0%
▪ A key area of focus for automotive manufacturers is the Industrial IoT
▪ The automobile sector contributes 7.1% of India's overall GDP and 49% of the manufacturing GDP
▪ Even though the automotive industry has experienced a tremendous learning curve over the last two years, the industry will be cautiously optimistic due to supply-side constraints
and fluctuating raw material prices
• The digital technologies will also support end-to-end digital continuity, from design to operations, by enabling IT-OT convergence (digital twin)
• Consumption-led demand is desired for growth revival

Chapter 5: Impact of COVID-19

Impact of COVID-19
Impact of COVDI-19 on the manufacturing industry
Accelerated process of
Government support to digital transformation in
domestic self- manufacturing
Labor shortage due to
illness and lockdown sufficiency, reduction in
Rise in prices of raw Corporate tax, ease of
materials and lower restrictions
Susceptibilities of doing business, FDI
manufacturing industry’s production volumes policy reforms
Liquidity crunches
stretched working capital supply chain exposed
for SMEs
Annual Growth rate (in %) for manufacturing from 2019-20 to 2021-22

2019-2020 2020-2021 2021-2022
-1.4 -9.6 11.8
• The onslaught of COVID-19 resulted in negative growth of 9.6 during the severe COVID-19 hit period
▪ Social distancing norms, nationwide lockdown imposed by the government induced travel restrictions, migration of laborers, and supply chain disruptions
• This created a multi-pronged effect on the manufacturing industry
• The year 2021-2022 witnessed high growth of the manufacturing industry in India
▪ Government-initiated reforms like "Atmanirbhar" and others to improve India's export and manufacturing capacities
▪ Regulatory support for manufacturing and the establishment on industrial corridors
▪ Incentives provided for the manufacturing of bulk pharmaceuticals, automobiles, textiles, and for food processing
▪ Increased focus on defense equipment manufacturing
• The industry witnessed a paradigm shift in terms of business imperatives because of the pandemic
▪ The key aspects of this fundamental change is anticipated to be technology impetus, localization of business, operational flexibility, variable cost model, and supply chain resilience

Impact of COVID-19 (Continued)
COVID-19 led digitization of Indian manufacturing
• With the change in the Industry 4.0, automation of conventional manufacturing, and industrial practices, COVID-19 boosted digital manufacturing in India
• Increased use of robots, Shopfloor automation, use of sensors and data analytics, adopting IIOT technologies gained traction during the period
• The fallout of supply chain dependency of the world from China errored China’s position in the manufacturing sector
• India was seen as an alternative site for foreign investments for manufacturing, along side other Asian countries such as Vietnam, Malaysia,
Bangladesh, and Taiwan, with supported by their smooth regulatory environment and easily available labour
• In April 2021, to relocate its mobile and IT display production facility from China to Uttar Pradesh, Samsung Display Noida invested INR 48.25 Bn
• Indian companies accelerated their digital transformation to attract foreign investments and to set up pace for Industry 4.0
• Parimal Glass, a Gujarat-based glass manufacturer, in collaboration Smart Infocomm, installed a software with facial-recognition capability during
COVID-19, to maintain social distancing norms of social distancing in its facilities
▪ The company also used augmented reality using smart glasses for quality assessment of the produce
• Siemens India, used digital twin software and cloud IoT to reconfigure their manufacturing line and implement social distancing for the assembly line
workers
▪ Increased use of robots, Shopfloor automation, use of sensors and data analytics, adopting IIoT technologies gained traction during the period

Chapter 6: Government Initiatives

Government Initiatives
Samarth Udyog Bharat 4.0 SanRachna – BHEL HMT TechPort
• Ministry of Heavy Industry & Public Enterprises, • BHEL, a government-owned engineering and • HMT, a machine tool manufacturing company and a
launched ‘Smarth Udyog Bharat 4.0’ as an Industry 4.0 manufacturing firm, launched SanRachna, a Government of India undertaking, has launched a
initiative technology innovation platform technology innovation platform, HMT TechPort
• The program aims to promote the Industry 4.0 • It is an open technology platform created to identify • The platform helps the machine tool industry by
technology set throughout Indian manufacturing flaws in the current technologies used in India bringing technology and innovation ideas together
stakeholders (manufactures, vendors and customers) • The program will accomplish this goal by hosting through collaborative approaches
• Under SAMARTH Udyog, five Industry 4.0 awareness- challenges or contests on the platform for industry • It will assist users in completing new initiatives,
raising and branding centers have been authorized, experts resolving various manufacturing challenges, and
including: • Its goal is to unite young people, manufacturing delivering business results more quickly
• C4i4 Lab Pune, the Center for Industry 4.02. experts, academic experts, industries, and MSME • This project's primary goals are to increase the
IITD-AIA Foundation for Intelligent manufacturers on a single platform to brainstorm machine tool sector's competitiveness and empower
Manufacturing3 current technological challenges faced by local the manufacturing industry
• R&D Platform for I4.0 India at IISc Factory4 producers or anyone looking for a tech solutions • As a result, the platform will help the government
• The CMTI's Smart Manufacturing Demo and meet its goal of generating 25% of GDP from
Development Cell5 manufacturing soon
• Industry 4.0 initiatives at IIT Kharagpur's DHI
CoE for Advanced Manufacturing Technologies

Government Initiatives (Continued)
IIT-Madras - Knowledge Integration for Atmanirbhar Bharat Mission Global Partnership on AI (GPAI)
Technology Enrichment (KITE)
• Indian Institute of Technology, Madras, launched KITE, • On May 12, 2020, the Prime Minister of India, • In 2020, India along with economies such as the United
a manufacturing technology eco-platform at the Narendra Modi, announced an economic package of States, the United Kingdom, the European Union,
Advanced Manufacturing Technology Development INR 20 Trn under the Atmanirbhar Bharat mission Australia, Canada, France, Germany, Italy, Japan,
Centre (AMTDC) • The project focuses on encouraging self-reliance in Mexico, New Zealand, the Republic of Korea, and
• The platform will focus on enhancing and five areas – economy, infrastructure, technology, Singapore launched the Global Partnership on AI
implementing smart manufacturing, digital demography, and demand (GPAI) initiative to promote the use of AI and its
manufacturing, indigenous manufacturing, process, • It is expected to transform India into an emerging related research and bridge the gap between theory
and discrete manufacturing in the manufacturing center for manufacturing electronics, pharmaceuticals, and practice
sector medical equipment, ammunition, and arms • Through the initiative, India will participate in the
• The KITE Collaborative R&D Forum is a challenge forum • Embracing industry 4.0 solutions, indigenous research global development of Artificial Intelligence
for solution seekers and problem solvers to stay and development programs, and building innovation
connected, address challenges, and discuss indigenous centers are few of the key aspects of the mission
technology development • Atmanirbhar Bharat is projected to boost the country’s
• The KITE Intelligent Chatbot is an intelligent route self-reliance for frontier technologies beneficial for
guide bot that provides users with the necessary smart manufacturing. This in turn will create attractive
guidelines for navigating the platform and offers easy opportunities for the development and
access and a user-friendly experience implementation of technologies in the manufacturing
industry

International Collaborations
India-Israel Industrial R&D & US India Artificial Intelligence India And Germany
Technological Innovation Fund (I4F) (USIAI) initiative Collaboration
•In 2020, Israel's Start-Up Nation Central and India's •In March 2021, the US India Artificial Intelligence •In May 2022, India and Germany collaborated with an
iCreate signed a Memorandum of Understanding (USIAI) Initiative was launched by the Indo-U.S. emphasis on artificial intelligence (AI) startups and
(MoU), launching a bilateral programme to speed up Science and Technology Forum (IUSSTF) to encourage research, as well as to promote advance disciplines of
entrepreneurial cooperation, innovation, and the use of AI potential in the two nations in areas such science and technology such future manufacturing,
technological cooperation between the two nations as smart manufacturing and provide a forum for key electric mobility, cyber physical systems, quantum
•In January 2022, India and Israel approved 3 stakeholders to exchange, identify new R&D technologies, green hydrogen, and deep ocean
cooperative R&D projects worth INR 41.25 Mn as a part opportunities in science and technology and discuss research
of the India-Israel Industrial R&D and technical the current state of AI, and the related challenges •Machines, equipment, and industrial intermediate
Innovation Fund (I4F) and proposed steps to expand •The initiative is funded by the Department of Science products are Germany's principal exports to India; thus,
the India-Israel collaborative ecosystem & Technology (DST), the Governments of India and the the collaboration will almost certainly increase India's
▪ I4F aims to encourage, facilitate, and assist United States Department of State prospects for smart manufacturing.
India and Israel's combined industrial R&D,
which will result in the co-development and
commercialization of cutting-edge technologies
that will benefit both nations

Chapter 7: Market Influencers

Market Drivers
Government support towards technology adoption
• Government initiatives such as Make in India and Start-up India, and Industry I4.0 (SAMARTH Udyog Bharat 4.0) have incentivized technology-based start-ups,
software firms, and manufacturing companies to incorporate technology in their daily processes, to increase accuracy, flexibility, productivity, and efficiency
• The Skill India initiative has helped in reskilling the workforce in accomplishing tasks that require a new skillset
• The National Association of Software and Services Companies (NASSCOM) inaugurated centers for AI and data science in Bengaluru and Hyderabad to develop
emerging disruptive technologies such as AI/ML and leverage the power of data science
▪ These centers have also allocated resources, encouraged start-ups, and utilized global best practices for the increasing use of AI in India
• Thus, these initiatives have influenced the widespread adoption of digitization in the manufacturing industry of the country
Rising consumer demand for mass customization
• Indian customers are increasingly seeking products that are tailored to their individual preferences
• Mass customization involves production of customized goods and services to meet specific needs of customers, while maintaining high volumes of production
• 3D printing, computer-aided designing, robotics, and automation have made Indian manufacturers to cater to the demand of customization for large customer base
▪ Companies such as Group Bayport, Hyve are few of the companies in India that manufactures mass customized products
• The demand for mass customized product is also supported by several e-commerce platforms that has enabled manufacturers to reach wider audience
• Customer personalization provides opportunities in vehicle manufacturing, apparel manufacturing, cosmetics manufacturing

Market Drivers (Continued)
Ease of foreign direct investment (FDI) in manufacturing
• FDI eases the collaboration of foreign companies with Indian companies to develop new technologies and processes that can then be skewed to suit Indian
manufacturing
• Foreign investments also improve smart infrastructure such as internet connectivity, advance power and logistics supplies to support the implementation of
automation in manufacturing
• FDI-enabled manufacturing facilities in India are highly concentrated in states of Maharashtra, Gujarat, Tamil Nadu, Karnataka and West Bengal thus, providing boost
to the smart manufacturing implementation in these states
• As per the Department for Promotion of Industry and Internal Trade (DPIIT), in 2021-2022, India got a total inflow of INR ~4,345 billion in FDI
• Automobile sector received FDI inflows of INR 2479 billion between April 2000 – June 2022
Fierce competition in manufacturing in India
• Intense competition from both domestic and international players has characterized Indian manufacturing space during recent years
• Competition has also been fueled by the growing emphasis on innovation, research and development, and investments made by companies to create new products
catering to the evolving needs of the consumers
• Further, globalization has created a need for the Indian manufacturers to invest in technology to produce goods at par with the international quality
▪ It has also opened the Indian market to the foreign companies, increasing the competition
• Overall, the high competition boosts the innovation, need for efficiency and more investments in automated manufacturing techniques

Market Challenges
Technical skill gap
• Industries are unable to benefit from investments in smart factories due to a lack of technological expertise
• The capitalization on the opportunities created in the field of smart manufacturing is currently restrained by the lack of skilled talent in the country
▪ ~ 150,000 employment roles are projected to be created in the areas including 5G, cloud computing, artificial intelligence (AI), Big Data Analytics, Internet of Things
(IoT), mobile app development and robotic process automation (RPA)
• This requires the manufacturing companies to hire workers familiar with manufacturing procedures and digital tools to assist in smart factory implementation and
advancement
Unrealistic expectations regarding digital transformation
• Industry stakeholders, management, and others may have personal views on the conditions and goals for implementing a smart factory
• It can be challenging to determine the impact of any initiative without experience
• Similarly, little resource planning and expectations of an overnight digital transformation might be complex due to stakeholders' and management's vague
understanding and viewpoints regarding the future of the automotive industry
• Expectations of the stakeholders and management may sometime create gaps in the implementation of digital transformation of the factory
• Thus, it is challenging to persuade management to support projects based on theoretical benefits that are not yet observable in the existing facility

Market Challenges (Continued)
High-cost constraints for the adoption of smart manufacturing
• Transforming traditional production factories to AI-driven manufacturing units requires a significant capital investment
▪ This huge investment includes the procurement cost and installation expenses of connected sensors, intelligent cameras, data analytics software, and other components
• Although several manufacturers are converting their factories into intelligent production houses, while others are reluctant to invest a handsome amount for availing
the benefits of AI
• Hence, the financial burden that comes with the adoption of data-driven software and AI-powered solutions is impeding the penetration of AI in the country’s
manufacturing industries

Chapter 8: Market Trends

Market Trends
Industry 4.0 software trends
Cloud-Based Service for Implementation of Smart

Digital Twin
Manufacturing Platform
• The Digital twin technology is gaining traction in India, particularly in the manufacturing • Cloud-based software platforms provide comprehensive support for the entire
sector manufacturing process, from planning to production and delivery
• The trend is also supported by government-led initiatives such as ‘National Digital Twin • Vendors providing end-to-end support for manufacturing processes includes SAP
Mission; aimed to create a national level platform for digital twin technology used across manufacturing cloud, Oracle Cloud ERP, Microsoft Dynamics 365,Clairviz and others
manufacturing, infrastructure and healthcare ▪ These solutions are based on Industrial IoT, big data and analytics helping
• Manufacturing sector is using digital twin to optimize production processes, reduce waste, manufacturers to optimize operations, reduce costs and improve efficiency and
and improve product quality productivity
▪ Startups such as SwtichOn, offers digital twin solutions to the Indian • Such end-to-end manufacturing cloud solutions are projected to be a major trend in
manufacturing companies 2023
▪ By combining AI and digital twins to automate quality inspection, SwitchOn
intends to increase intelligence in the manufacturing industry and contribute
innovation
Increased use of IoT, Big Data, and predictive analytics
• IoT, Big Data, and predictive analytics are attracting the attention of manufacturers in India and presents scope for investments
• Several Indian manufacturing companies (such as TVS Motor and JK Tyre & Industries Ltd) use AI-based predictive maintenance to improve their productivity
• Big data is also being used to gain deeper understanding of consumer expectations, market patterns, and reduce down-time in the manufacturing industry
▪ After implementing augmented reality, big data and analytics, and IoT-based solutions in the manufacturing process, HUL's Dapada manufacturing site reported a 34% decrease in
manufacturing costs (per tonne) and a 50% reduction in the lead time for end-to-end product development in March 2022
▪ The site manufactures household care items like Surf excel, Rin, and Vim

Market Trends (Continued)
Industry 4.0 connectivity trends
5G in manufacturing Use of sensors and actuators to increase
• 5G in manufacturing is among the few nascent trends in the market • Manufacturers industry is implementing the use of smart sensors to improve their
• 5G provides more accuracy, dependability, and faster speeds to enable machine to overall operations, and increase the quality of their products
machine communication for vital activities in the industrial and healthcare industries to • Sensors are intelligent devices that provide data and processed information and
produce high-quality output optimize processes such as condition monitoring, predictive maintenance, quality
• Indian manufacturers are leveraging high speed of 5G connections to speed up critical improvements, quality predictions, asset management and traceability
processes in assembly lines • Companies such as Sensors India, Nutronics India, Accent Controls, Baumer India,
▪ In December 2022, Mahindra & Mahindra (M&M) in collaboration with Bharti Vishay Intertechnology Inc, Delta Electronics are few of the players producing smart
Airtel became the first Indian manufacturer with 5G-enabled automobile sensors for the Indian market
manufacturing facility
Industry 5.0 End-to-end digitization of supply chain
• Industry 5.0 is a relatively new trend that refers to the integration of advance • Manufactures in India are using AI, IoT and big data analytics to gain greater visibility
technologies with human intelligence to manufacturing and control over supply chain
• The IT sector in India is playing a major role in the development of industry 5.0, as many • Smart supply chain enables manufactures to respond more quickly to the fluctuating
Indian companies are involved in developing solutions for manufacturing industry market demand and customer needs, track inventory levels and adjust production
• Overall, India is well positioned for the paradigm shit to industry 5.0 with collaborative accordingly
robots entering in India manufacturing • Overall, the trend is expected to continue with increasing competition and dynamic
▪ In February 2023, Svaya Robotics, an Indian startup, created collaborative robots business environment
with digital twin and artificial intelligence capabilities

Market Trends (Continued)
Industry 4.0 hardware trends
3D printers in manufacturing Indian startups foray in industrial robotics
• Local industry players are implementing 3D printing in manufacturing to spur market • As more companies seek to improve automation, there has been a growing interest and
expansion investment in industrial robotics startups in India catering to manufacturing sector
• The rush to 3D printing is supported by the country’s rising automobile, • It reflects a larger trend of Robotics in manufacturing in the country
manufacturing, defense, aerospace, and aviation sectors which have implemented 3D ▪ In March 2023, Cybernetics Labs, an Indian start-up, revealed its attempt to
printing to their use integrate vision and intelligence into robotic arms used in manufacturing settings
▪ In February 2021, Wipro 3D and Hindustan Aeronautics Ltd (HAL) partnered for the that employ Computer Numeric Control (CNC) machinery
development, manufacture, and airworthiness certification of a vital aero-engine ▪ Tvasta Manufacturing Solutions Private Limited: The company is based in
component operating in the hot zone using metal 3D printing Bangalore and specializes in 3D printing tool named, Nirmaan. It uses a
▪ 3D printing is used by Tata Motors and Maruti Suzuki for prototyping and research completely automated method to print with different concrete mixtures with an
and development accuracy of +/- 1mm and reduces the need for human intervention
• There has also been an upsurge in investments in robotics the medical,
pharmaceutical, and military and defense sectors
▪ In January 2023, the Ministry of Defense, Government of India, announced to
purchase 100 robotic mules and related accessories under an emergency
procurement Fast Track Process (FTP) to carry out surveillance in difficult terrain and
ace up the defense of the country

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Smart Manufacturing

(Industry 4.0) Market in

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Chapter 3: Chapter 5: Chapter 8:

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Sex ratio of total population Population based on age-group

Males per 100 females 0-14 15-24 25-49 50+

2010 2015 2020 2025 2010 2015 2020 2025

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No. of infant deaths

2010-2015 2015-2020 2020-2025 2010-2015 2015-2020 2020-2025

Number of births Number of deaths

2010-2015 2015-2020 2020-2025 2010-2015 2015-2020 2020-2025

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Combined literacy rate

Male Female Overall

Rural literacy rate Urban literacy rate

86.30% 89.70% 85%

2001 2011 2001 2011

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6.79% 6.53% 81.97

Average consumer price index (CPI) inflation Unemployment rate

5.41% 5.33% 5.27%

2017 2018 2019 2020 2017 2018 2019 2020

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Access to safe drinking water (by Indian households)

Urban Rural Total

64.18 67.20 65.13 68.45 70.43

74.41 72.41 76.93 76.39 83.03

2015 2016 2017 2018 2019 2020 2021 2022

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Focus of the report

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Disruptive technology concepts are applied in manufacturing processes

Cybersecurity Additive Manufacturing Digital Twin Internet of Things(IoT)

Augmented, Virtual and

Machine learning Probabilistic method Embodied intelligence Search and optimization

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India and global manufacturing market- Overview

Manufacturing share by country in 2022

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Indian manufacturing industry

Wood and products of Repair and Installation

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FY2021 FY2022 FY2023e FY2024e FY2025e FY2026e FY2027e

IoT and Smart manufacturing

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• Smart solutions involve :

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Impact of Indian IT industry, SMEs