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In order to navigate economic uncertainty and improve performance, manufacturers worldwide are implementing artificial intelligence (AI), data-driven solutions, and sustainable practices, according to Rockwell Automation’s 10th annual State of Smart Manufacturing Report.
According to the 2025 poll, which was carried out in 17 of the top manufacturing nations, including India, there is a significant emphasis on long-term digital transformation. 99% of Indian manufacturers have made investments in AI/ML or intend to do so during the next five years. Long-term business effect is the main motivator for 81% of respondents.
With 94% of Indian enterprises putting formal sustainability policies into place, the report also highlights India’s rising commitment to sustainability. Throughout the product lifetime, companies are giving special attention to energy management and environmentally responsible methods.
Rockwell Automation India Managing Director Dilip Sawhney stated: “This year’s report highlights the growing influence of advanced technologies on Indian manufacturing.” Indian businesses are adjusting to rapidly changing supply chain dynamics, global production, and economic changes. Almost all Indian manufacturers now understand the benefits of investing in AI and machine learning technologies, which were originally seen to be nascent trends but have since developed into strategic goals.
India’s ability to use analytics for efficiency and innovation is demonstrated by the fact that it efficiently uses 53% of the data collected, which is higher than the global average of 44%. Employers in India are giving analytical thinking and communication/teamwork top priority when it comes to workforce development. These are abilities that are in line with the requirements of a contemporary, technologically advanced manufacturing setting.
“It’s great to see Indian manufacturers leading in sustainability policy and surpassing worldwide rivals in effective data use, even though technology infrastructure and data preparedness remain major obstacles. By providing Indian manufacturers with intelligent, sustainable, safe, and scalable solutions that fill these gaps and boost competitiveness, we at Rockwell Automation are dedicated to quickening this transition,” Dilip Sawhney continued.
Important worldwide conclusions include:
- Cloud/SaaS, artificial intelligence (AI), cybersecurity, and quality management are the main areas of smart manufacturing technology investments, according to 81% of manufacturers, who also indicate that internal and external pressures are speeding up digital transformation.
- Over the next five years, 95% of manufacturers have made investments in AI/ML or intend to do so.
- A developing approach to advanced technologies beyond experimentation is indicated by the 12% increase in organizations investing in generative and causal AI year over year.
- With 49% of manufacturers aiming to employ AI for cybersecurity in 2025, up from 40% in 2024, cybersecurity is the second-biggest external risk.
- As a result of wise manufacturing investments, 48% of businesses intend to repurpose or recruit more people. Furthermore, 41% are addressing labor shortages and the skills gap by utilizing automation and artificial intelligence.
- For the second consecutive year, quality control is the most popular use case for AI, with 50% of respondents predicting that they will employ AI/ML to improve product quality by 2025.
Beyond these statistics, the research shows a larger trend toward operations that are more adaptable and efficient. Smart technologies are being used by manufacturers to improve supply chains, speed up sustainability projects, and make better decisions more quickly. Additionally, the significance of analytical and AI skills for leaders has increased by 5%, demonstrating the need for technical innovation and talent growth to coexist.
Many manufacturers still encounter difficulties when putting AI into practice. The ability to use AI is now seen by over half of respondents as an extremely significant skill, up from just 10% the previous year.
This study, which was carried out in collaboration with Rockwell Automation and Sapio Research, examined input from 1,560 respondents in 17 of the leading manufacturing nations, representing positions ranging from management to the C-suite. Consumer packaged goods, food and beverage, automotive, semiconductor, energy, life sciences, and other industries were among those represented in the survey’s sample. It provides a broad range of manufacturing business perspectives with a balanced mix of firm sizes with revenues ranging from $100 million to over $30 billion.
The Growing Role of AI in Indian Manufacturing
Artificial Intelligence has emerged as a game-changer across various sectors, and manufacturing is no exception. Indian factories are increasingly adopting AI-driven automation, predictive maintenance, and quality control systems. These technologies not only enhance productivity but also reduce downtime and operational costs.
With AI-enabled sensors and data analytics, manufacturers can now monitor equipment health in real-time, foresee potential failures, and optimize maintenance schedules. This shift leads to improved machine longevity and higher production efficiency.
Sustainability as a Strategic Imperative
Beyond operational efficiency, sustainability has become a central focus in India’s industrial agenda. Manufacturers are recognizing the importance of reducing carbon footprints, minimizing waste, and using resources responsibly. This shift aligns with India’s broader commitments to climate action and sustainable development goals.
The Rockwell report highlights how companies are integrating renewable energy sources, adopting energy-efficient technologies, and implementing circular economy principles in their production processes. These efforts are helping Indian manufacturers not only comply with regulations but also appeal to environmentally conscious consumers worldwide.
Integration of AI and Sustainability for Smart Manufacturing
The synergy between AI and sustainability is creating new opportunities. AI facilitates smarter energy management by analyzing consumption patterns and optimizing usage in factories. For instance, AI can adjust HVAC systems, lighting, and machinery operation based on real-time demand, thereby reducing unnecessary energy expenditure.
Additionally, AI supports waste reduction by improving inventory management, optimizing supply chains, and enabling precision manufacturing. These advancements contribute to cost savings and environmental benefits, positioning Indian manufacturers as leaders in green industry practices.
Challenges and the Way Forward
While AI and sustainability promise great benefits, Indian manufacturers face challenges in adoption. These include skill shortages, high initial investment costs, and integration complexities. However, collaborative efforts between the government, industry leaders, and technology providers are fostering a supportive ecosystem.
Initiatives such as skill development programs, financial incentives, and technology partnerships are accelerating the digital and sustainable transformation of manufacturing in India.
The Impact on India’s Economy and Global Competitiveness
The successful integration of AI and sustainability in manufacturing is expected to boost India’s economic growth, create skilled jobs, and enhance export competitiveness. Smart factories will produce higher-quality goods faster and at lower costs, enabling Indian companies to compete on the global stage.
Moreover, sustainable manufacturing practices enhance brand reputation and open new markets that prioritize eco-friendly products, further strengthening India’s position in the international trade arena.
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India’s manufacturing sector is undergoing a fundamental shift, moving beyond traditional methods to embrace technologies that are intelligent, responsive, and sustainable. As industries face pressure to become more efficient and environmentally responsible, AI is emerging as the cornerstone of this transformation, offering manufacturers the ability to adapt to real-time challenges while maintaining resource-conscious practices.
Modern Indian factories are increasingly deploying AI-based automation to enhance their decision-making processes. These systems analyze production data, optimize workflows, and ensure that energy consumption and material use are minimized. This real-time responsiveness not only improves output but also dramatically reduces operational wastage, bringing India closer to its sustainability goals.
Manufacturers are also investing in AI to build predictive systems that help avoid costly downtimes. Rather than following scheduled maintenance routines, factories are using machine learning models to predict when equipment might fail and intervene before it happens. This predictive approach reduces unnecessary part replacements and the associated waste of materials, contributing to greener production cycles.
AI is playing a crucial role in the design and development phase of manufacturing as well. Companies are using generative design tools powered by AI to create products that are lighter, stronger, and use fewer resources. These innovative tools can explore thousands of design alternatives in seconds, helping engineers identify the most efficient solutions that meet sustainability criteria.
India’s commitment to climate action is reflected in its rapid adoption of energy-efficient technologies. Factories are installing smart meters, intelligent HVAC systems, and lighting solutions that automatically adjust to operational needs. All of these are controlled by AI systems that continuously analyze usage patterns to find and implement savings opportunities.
Across industrial clusters, sustainability reporting is gaining importance, and AI is becoming instrumental in ensuring accuracy and transparency. Companies now rely on automated systems to collect and process data related to emissions, energy usage, and resource consumption. These systems not only make compliance easier but also help companies track progress toward their environmental goals.
AI is also being integrated into quality assurance systems in a way that reduces material waste. Cameras and sensors powered by machine learning can detect flaws during the manufacturing process, allowing for immediate corrections. This minimizes defective products and prevents entire production batches from being discarded, saving resources and energy.
In supply chains, AI is transforming how goods are procured, stored, and delivered. By analyzing market trends and demand forecasts, AI helps companies stock only what’s needed, reducing overproduction and excess inventory. It also ensures that transport routes are optimized, fuel consumption is minimized, and delivery timelines are met more reliably.
The use of AI in inventory management has reduced the over-reliance on warehousing and unnecessary stockpiling. Companies can now balance supply and demand with precision, thereby minimizing storage costs and reducing the risk of outdated or spoiled materials. This streamlined approach supports both economic and environmental efficiency.
India’s digital-first approach is also encouraging small and medium enterprises (SMEs) to adopt AI without heavy capital investments. Cloud-based solutions, affordable sensors, and AI-as-a-service platforms are enabling even smaller players to become part of the smart manufacturing wave. This inclusiveness is vital to India’s ambition of transforming its entire manufacturing ecosystem.
India’s manufacturing sector stands at a pivotal junction where embracing technology and sustainability is not a choice but a necessity. Artificial Intelligence is enabling manufacturers to predict maintenance needs, streamline operations, and reduce waste — all of which contribute to significant cost savings and environmental benefits. Smart factories powered by AI are redefining productivity benchmarks across industries from automotive to electronics.
As companies navigate complex supply chains, AI-driven insights are helping them optimize logistics, forecast demand accurately, and enhance resource allocation. This has been especially valuable post-pandemic, where agility and resilience became crucial. Manufacturers leveraging AI tools are now better equipped to respond to market fluctuations, regulatory changes, and global competition.
The Rockwell Automation report highlights that Indian firms are actively investing in digital transformation, not only to increase operational efficiency but also to meet global climate goals. With India aiming to achieve net-zero emissions by 2070, sustainable manufacturing practices supported by AI and automation technologies will play a central role. These tools help monitor energy usage in real time and identify areas for improvement without compromising output quality.
Beyond the factory floor, AI is also influencing decision-making at the policy and boardroom level. Data-driven strategies powered by machine learning models are guiding CEOs and policymakers on where to deploy capital, how to upskill the workforce, and which technologies yield the highest returns in terms of both sustainability and profitability.
While the promise of AI in manufacturing is immense, it also comes with challenges. Small and medium enterprises often struggle with the high upfront costs of digital integration. Bridging this gap requires public-private partnerships, incentive schemes, and accessible training programs to bring the benefits of smart manufacturing to all tiers of the industry.
India’s talent pool is another driving force. With a strong base in engineering and software development, the country is uniquely positioned to lead the AI-driven manufacturing revolution. Initiatives like Skill India and the Production Linked Incentive (PLI) scheme further support this vision, ensuring the workforce is ready for the future.
Importantly, AI doesn’t replace the human role in manufacturing—it enhances it. Human-machine collaboration is key to unlocking the full potential of smart factories. Workers supported by AI systems can make faster decisions, reduce errors, and work more safely in complex environments.
India’s journey toward smart, sustainable manufacturing is also being closely watched globally. As international trade partners demand cleaner supply chains and smarter production methods, India’s leadership in this space could boost its export capabilities and strengthen its global competitiveness.
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Q1: How is AI transforming smart manufacturing in India?
AI is revolutionizing Indian manufacturing by automating processes, improving efficiency, reducing waste, and enabling predictive maintenance. This leads to higher productivity and sustainable operations.
Q2: What role does sustainability play in India’s smart manufacturing push?
Sustainability is central to India’s manufacturing growth, with a focus on reducing carbon emissions, optimizing energy use, and adopting green technologies to meet national climate goals.
Q3: How does AI help reduce the carbon footprint in manufacturing?
AI analyzes real-time data to optimize energy consumption, streamline production workflows, and minimize material waste, all of which contribute to a lower carbon footprint.
Q4: What challenges do Indian manufacturers face when adopting AI and sustainable practices?
Challenges include high initial investment costs, skill gaps, technology integration complexities, and limited awareness among small and medium enterprises.
Q5: How is the government supporting AI adoption in India’s manufacturing sector?
The government promotes AI through initiatives like ‘Make in India,’ digital skill development programs, and incentives such as the Production Linked Incentive (PLI) scheme to encourage technology adoption.
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