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In January 2022, Reliance Industries bought 54 per cent stake in Addverb Technologies (a manufacturer of autonomous mobile robots, sorting robots, and automated storage and retrieval systems) for $ 132 million marking an entry of big industrial giant in the fast-growing industrial automation sector. In the last 2-3 years, there has been very fast adoption of automation in India especially for material handling operations across industries.
In the recent years, global corporations have been working on China Plus One strategy to diversify their supply chain away from China; thus providing the most opportune time for India to become the world’s manufacturing hub. However, India is not the only country eyeing to tap this trend. Countries like Vietnam, Indonesia, Thailand, etc are also presenting themselves as attractive alternate manufacturing destinations for global players. As per studies, India managed to capture only 10 per cent of the $ 31 billion in manufacturing output that moved out from China to other Asian countries.
To make India an attractive destination for manufacturing, the government of India introduced Production Linked Incentive (PLI) scheme for 15 industrial sectors with a total budgeted outlay of Rs 1.93 trillion. For PLI schemes to succeed, labour reforms need to be implemented. Also, to reap the benefit of PLI incentives, domestic manufacturers will have to exceed their projected growth targets, which require them to take the level of productivity many notches up by investing in automated solutions.
The number of robot installations in India has been growing at 20-25 per cent CAGR in the last five years. However, India’s current robot density (number of robots deployed per 10,000 employees) of four is well below the global average of 126 (the robot density for China is 246). The biggest hurdles facing Indian manufacturers in the adoption of industrial robots are high upfront costs (resulting in longer RoI) and their inflexibility. As a solution, many companies are opting for collaborative robots (cobots), which offer shorter payback period. Globally, while the cobot market is expected to witness CAGR of about 31 per cent over the next 5-8 years, demand for industrial robots is likely to see a growth of around 10-15 per cent.
According to Grand View Research (GVR) report, the global cobot market is projected to grow from $ 1.23 billion in 2022 to $ 11.04 billion by 2030 at a CAGR of 31.5 per cent. The primary reason for this growth is the increasing adoption of collaborative robots by small & medium enterprises (SMEs) as compact, flexibile and cost-effective cobots are ideal for them. SMEs are more sensitive to the RoI and it is too costly for them to make large-scale transformations on the production line. Hence, they need robots that are affordable and easy to deploy & use; and cobot fits the bill.
India has 7.9 million SMEs, who account for 33 per cent of India’s GDP, more than 45 percent of the country’s total industrial production and 40 per cent of total exports. Cobots can play a key role in expanding SMEs' contribution in Make in India initiatives, ultimately increasing the competitiveness of the country to attract international investors and helping Indian manufacturing sector to reach its $ 1 trillion potential by 2025
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