Industrial AI To Boost Manufacturing Output
ECONOMY & POLICY

Industrial AI To Boost Manufacturing Output

India’s manufacturing sector is moving from AI pilots to scaled shopfloor deployment, according to a new report by YourNest Venture Capital and Praxis Global Alliance. The report states that 90 per cent of Indian manufacturing enterprises are experimenting with AI, while funding is projected to rise ten-fold to $1.5 billion by 2030. Industrial AI is expected to unlock around $150 billion in incremental manufacturing output by 2030 by optimising existing assets, without proportional greenfield capital expenditure. The report highlights potential reductions of 30–50 per cent in unplanned downtime, 10–40 per cent in conversion costs, yield improvements of 5–15 per cent and throughput increases of up to 30 per cent. Funding in Industrial AI stood at $150 million in 2024, while average deal sizes increased nearly four-fold to around $8 million between 2021 and 2025. The report said Industrial AI is emerging as a high-ROCE lever, with payback cycles as short as 12–18 months. The report noted that Industrial AI solutions are becoming deeply embedded in manufacturing processes, creating stronger defensibility than traditional software models. It added that legacy system integration and data readiness remain challenges, but are being addressed through wider digital transformation efforts.

India’s manufacturing sector is moving from AI pilots to scaled shopfloor deployment, according to a new report by YourNest Venture Capital and Praxis Global Alliance. The report states that 90 per cent of Indian manufacturing enterprises are experimenting with AI, while funding is projected to rise ten-fold to $1.5 billion by 2030. Industrial AI is expected to unlock around $150 billion in incremental manufacturing output by 2030 by optimising existing assets, without proportional greenfield capital expenditure. The report highlights potential reductions of 30–50 per cent in unplanned downtime, 10–40 per cent in conversion costs, yield improvements of 5–15 per cent and throughput increases of up to 30 per cent. Funding in Industrial AI stood at $150 million in 2024, while average deal sizes increased nearly four-fold to around $8 million between 2021 and 2025. The report said Industrial AI is emerging as a high-ROCE lever, with payback cycles as short as 12–18 months. The report noted that Industrial AI solutions are becoming deeply embedded in manufacturing processes, creating stronger defensibility than traditional software models. It added that legacy system integration and data readiness remain challenges, but are being addressed through wider digital transformation efforts.

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