Artificial Intelligence in Manufacturing Industry in India, 2024

In recent years, the manufacturing sector has undergone substantial evolution, emerging as one of the fastest-growing industries. The advent of the fourth industrial revolution, Industry 4.0, driven by cyber-physical systems, big data analytics, IIoT, cloud computing infrastructure, AI, and 3D printing, has revolutionized manufacturing. AI adoption in manufacturing encompasses factory automation, quality monitoring, equipment failure prediction, order management, delivery management, and demand forecasting.

Market insights:

The market size of artificial intelligence (AI) in manufacturing in India is projected to reach INR 12.59 billion by 2028, growing at a compound annual rate of 58.96% from 2023 to 2028. Evolving customer preferences, new distribution models, geopolitical changes, supply chain disruptions, and ESG regulations are creating opportunities for the manufacturing sector to innovate and reshape existing business models.

Market drivers:

Government initiatives in India, such as Make in India, Start-up India, and Industry 4.0, have encouraged technology-driven start-ups, software firms, and manufacturing companies to integrate AI into their daily operations, enhancing accuracy, flexibility, productivity, and efficiency. The Indian startup ecosystem is undergoing a transformation with growing investments in intelligent automation, artificial intelligence, machine learning, and Big Data.

Market challenges:

Converting conventional factories into AI-driven manufacturing units necessitates substantial capital investment, covering expenses for procuring and installing connected sensors, intelligent cameras, data analytics software, and other components. Despite the emergence of Indian start-ups in the AI market, investor reluctance, both domestically and internationally, persists due to apprehensions about failure and a limited understanding of AI systems.