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Industry 4.0 takes off in India but confronts challenges

For a faster transformation, country needs to focus on skilling, building digital infrastructure: ISB-Plugin Alliance report

Industry 4.0 takes off in India but confronts challenges

Industry 4.0 has taken off in India, with manufacturers embracing a range of technologies to optimise their processes across various verticals using automation.


While the global Industry 4.0 market is poised for a compound annual growth rate (CAGR) of 20 per cent from 2024 to 2032, India’s industrial automation market is also witnessing steady growth, cruising at a CAGR of 14.26 per cent.


This upward trajectory is expected to propel the market to a substantial $29.43 billion by 2029.


“India’s manufacturing sector is making strides in adopting Industry 4.0 technologies, with 54 per cent of companies already implementing AI and analytics,” a study by the Indian School of Business-Plugin Alliance said.


“Indian companies are widely adopting Industry 4.0 technologies, enhancing cost leadership, product differentiation, and market agility,” the report, released recently, said. 


However, the path to full-scale digital transformation is riddled with challenges, including a significant skill gap and a pressing need for robust digital infrastructure. 


What is Industry 4.0?

Industry 4.0, or the Fourth Industrial Revolution, is a technological transformation that leverages digital technologies to revolutionise how businesses operate and create products and services. It’s characterised by the fusion of technologies like artificial intelligence (AI), robotics, the Internet of Things (IoT), and automation into manufacturing and industrial processes.


Industrial production up

“The country has made substantial strides in the manufacturing sector, with the Index of Industrial Production standing at 143.4 for April-January 2024, and the Manufacturing Purchasing Managers’ Index reaching 56.9 in February 2024,” it said.


The country’s capacity utilisation in manufacturing rose to 74 per cent in the second quarter of 2023-24, indicating increased industrial activity.


While continuous upskilling and reskilling of its workforce in technologies like AI are a priority for the manufacturing sector in its journey to Industry 4.0, the report felt that there are some key challenges that confront the sector.


“There is an urgent need for robust digital infrastructure and a concerted effort to bridge the skilled workforce gap. Regulatory complexities for emerging technologies and investment hesitancy also remain significant hurdles,” the report said.


The analysis shows a clear upward trend in technology-related content, especially from 2017 onwards. This suggests that companies increasingly recognise digital transformation as a strategic imperative, accelerated by the disruptions of the pandemic.


Key focus areas

“Key focus areas include pandemic response strategies, technological innovation, automation, digital technology adoption, sustainability efforts, and managing risks in the digital era,” the report said.


The ISB-Plugin Alliance, a collaborative platform established by Intel India and the ISB’s Centre for Business Innovation, brings together a diverse range of stakeholders. 

This includes large enterprises, small and medium enterprises (SMEs), technology solution providers, systems integrators, startups, funding partners, incubators, government bodies, and industry organizations.


“By fostering collaboration and knowledge exchange among these key players, the Alliance seeks to accelerate the adoption of Industry 4.0 technologies and drive innovation across various sectors in the country,” an executive associated with the drafting of the report said.



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