59% of Indian manufacturers see AI as key growth driver over next five years: PwC India 

India's industrial manufacturing sector is entering a critical phase where competitiveness will increasingly depend on how effectively companies integrate artificial intelligence (AI), automation, and ecosystem-driven innovation into their business strategies, according to PwC India's latest report, Rewriting the Rules: The Next Chapter of Indian Industrial Manufacturing.

The report found that 59% of Indian industrial manufacturers, compared with 52% globally, believe AI will play a significant role in helping them achieve their strategic objectives over the next five years.

However, PwC said competitive advantage in an AI-driven future will not be determined solely by technology adoption, but by how seamlessly organisations embed AI into their business strategy, operating models and day-to-day operations. While AI ambitions are widespread, sustained value creation will depend on effective execution, it noted.

The report also highlighted that Indian manufacturers are accelerating automation across the value chain. Data capture and analytics emerged as the top priority, with 82% of respondents planning greater automation over the next five years, followed by quality assurance (69%), planning and forecasting (65%), and customer interactions (63%).

"India's manufacturing sector is entering a pivotal decade. The opportunity is no longer simply about expanding production capacity; it is about building intelligent enterprises that use AI, automation and data-driven decision-making to create sustainable competitive advantage," said Vinod Kumar, Partner and Leader, Manufacturing Sector, PwC India.

"The manufacturers that thrive will be those that align technology investments with business strategy, workforce transformation and ecosystem collaboration," he added.

Shift towards intelligent, customer-centric manufacturing

According to the report, Indian manufacturers are increasingly using automation not just to improve productivity but also to enhance customer experience, responsiveness and commercial agility.

This signals a transition from efficiency-led digitisation to market differentiation and value creation, with automation emerging as a strategic tool for strengthening operational resilience and customer relevance.

Kumar said that while AI and technology will continue to transform factories, organisational culture will ultimately determine whether those innovations translate into long-term progress. "When almost every AI tool becomes widely available, the rarest capability will be an organisation's willingness to learn, unlearn and execute," he said.

Execution to separate leaders from laggards

PwC said that as automation becomes more pervasive, the gap between industry leaders and followers will increasingly depend on how effectively companies integrate AI and automation into enterprise strategy, product development, supply chains, customer engagement and decision-making.

The report also pointed to a growing shift towards servitisation and solution-based business models, with manufacturers seeking to deepen customer relationships and generate new revenue streams beyond traditional product-led growth.