MSMEs Central To India’s AI-Led Manufacturing Transition, Say Officials at AI Impact Summit

New Delhi, Feb 19 (KNN) Artificial intelligence-enabled quality inspection in textiles, predictive maintenance to reduce machine downtime, tracing contamination sources in pharmaceuticals, and real-time tracking of emissions and energy intensity were among the case scenarios highlighted by policymakers at the India AI Impact Summit.

Officials noted that such AI-driven interventions could help scale up manufacturing while enhancing quality and global competitiveness of India’s industrial sector, reported the Indian Express.

MSMEs Central to AI Transition

Speakers underlined that the transition to AI in manufacturing will hinge significantly on micro, small and medium enterprises (MSMEs), which number over 76 million in India, with nearly one-fifth engaged in manufacturing.

S. Krishnan, Secretary, Ministry of Electronics and Information Technology (MeitY), said that while large enterprises are generally able to finance and manage such technological transitions, smaller enterprises, particularly those in traditional sectors such as textiles, may not be in a position to make the necessary investments.

To support evidence-based policymaking, officials launched a study on AI adoption and its impact on manufacturing MSMEs. The study is being undertaken by Athena Infonomics in partnership with the National Institute for Smart Government (NISG) and line ministries including MSME, textiles and pharmaceuticals.

Industry-Led Transformation with Public Support

MSME Secretary S.C.L. Das said AI-led transformation should be driven largely by industry, particularly MSMEs, given their major role in jobs and output, but stressed that public investment and support systems will be crucial to enable the shift. He added that while businesses will build solutions, the government may need to recalibrate policies and step in where private investment is limited.

Rohit Kansal, Additional Secretary, Ministry of Textiles, said India’s AI progress will be shaped on the factory floor, stressing that lasting economic transformation must modernise traditional sectors like textiles, food processing and leather. 

He noted that productivity gains in MSMEs and legacy industries would boost national income more than marginal improvements in already digitised sectors.

Meeting Global Standards Through AI

Officials observed that global buyers increasingly prioritise consistent quality, reliable delivery and transparent supply chains. Competitiveness, they said, is no longer driven by labour cost advantages alone.

AI-enabled measurement and traceability systems can provide granular visibility across production networks, helping Indian firms meet global standards at lower compliance and verification costs.

Bhuvnesh Kumar, CEO, NISG, warned that slow AI adoption could leave India’s manufacturing sector lagging. He said AI offers opportunities for MSMEs, startups and solution providers, and proposed creating a curated repository of AI tools for MSMEs, backed by possible government support to drive adoption.

Need for Cluster-Based Deployment

Kansal said MSMEs should implement basic traceability and data interoperability, with clear, time-bound returns on AI investments to spur adoption. 

He highlighted cluster-based deployment, shared digital infrastructure and common data standards to lower costs and scale benefits, while cautioning against vendor lock-in and framing AI as productivity-enhancing, not job-displacing.

Officials concluded that AI adoption in MSMEs would gain traction when improvements in quality and competitiveness are achieved without adverse impacts on employment.

(KNN Bureau)