The IMF (International Monetary Fund) projects global growth at 3.3% for 2025 and 2026, broadly consistent with past projections, with advanced economies anticipated to expand at a moderate 1.7–1.8% and developing nations especially in Asia, to see greater momentum at a 4.2% rate. Technological advancements have been a significant driver of change. Rapid development in artificial intelligence, machine learning, and digital transformation as well as Industry 4.0's increasing acceptance have reshaped industries, with emerging markets in Asia benefiting from investments and innovations in electronics and semiconductors industries. However, the geopolitical standoff has brought uncertainty, affecting global trade and economic stability. At the same time, sustainability has emerged as a priority, with increasing investments in renewable energy.

India during this period has emerged as one of the fastest-growing major economies, consistently achieving a GDP growth rate hovering around 6-7% annually. Fueled by public infrastructure investments, a thriving manufacturing sector, and a robust services industry—particularly IT and business services—India has demonstrated strong economic resilience. Key reforms such as the introduction of the Goods and Services Tax (GST) and the Digital India initiative have streamlined taxation and expanded digital access, fostering ease of doing business, and nurturing the MSME and startup ecosystem. Despite challenges, including the economic contraction during the COVID-19 pandemic, India rebounded strongly with record growth in subsequent years. With a focus on infrastructure, manufacturing, foreign direct investment, and digital transformation, India continues to strengthen its position as a key global economic player.

The Make in India initiative has transformed India into a global manufacturing hub by driving investment, innovation, and job creation. One of the most notable achievements of this is the substantial increase in FDI inflows to approximately $720 billion (April 2014–December 2024), a 119% increase over the previous decade. As per the RBI’s latest KLEMS database, the manufacturing sector generated 28 million fresh employments, while exports reached $778.21 billion in 2023-24, up 67% from 2013-14. Regulatory reforms also improved India’s ease of doing business ranking, rising from 142nd in 2014 to 63rd in 2020.

Looking ahead, the focus on PLI schemes, digital initiatives like the Udyam Registration Portal, and infrastructure development under PM Gati Shakti aims to further boost manufacturing. The success of these initiatives in attracting global value chains and fostering self-reliance aligns with the Atma Nirbhar Bharat vision, positioning India for long-term economic growth.

India’s journey toward self-reliance in manufacturing is a work in progress. Factors such as the need for specialised technology, historical supply chain dynamics, resource constraints, and cost competitiveness have driven reliance on imports, particularly in sectors like semiconductors, electronics, and advanced materials. However, developments have been positively taking shape much faster and the country is actively addressing the gaps through initiatives like the Production-Linked Incentive (PLI) scheme, industrial clusters, and infrastructure projects such as PM Gati Shakti. 

For instance, the PLI Scheme for white goods (especially AC) has reduced import dependency, increased local value addition from 20% to 62% in just three years (targeting 80% by 2029), and improved lead times making the industry more resilient. The AC market has doubled to 14 million units, with local compressor capacity rising from one million to nearly eight million units. 

As mentioned above, despite challenges, including the economic contraction during the COVID-19 pandemic, India rebounded strongly with record growth in subsequent years. Moreover, the National Manufacturing Mission announced during the Union Budget 2025 reflects the government’s comprehensive strategy to strengthen India's manufacturing capabilities across small, medium, and large industries.

As per industry estimates, manufacturing/industries contribute 25% of India’s energy-related CO2 emissions. Adopting smart factory solutions by the OEMs can significantly reduce carbon footprints by leveraging digital technologies such as IoT, AI, and data analytics. Smart facilities can drive energy efficiency, minimise waste, integrate renewable energy, and optimise supply chains. Indian OEMs can accelerate decarbonisation by investing in digital solutions, setting clear carbon reduction goals, collaborating with technology providers, and upskilling workers. Additionally, it helps them meet compliance obligations with environmental regulations through accurate tracking and reporting. By fostering public-private partnerships and promoting sustainability-driven initiatives, India can align its manufacturing sector with global best practices.

Indian manufacturing is rapidly advancing and adopting modern Industry 4.0 technologies such as IoT, AI, and robotics. And this has further been boosted by initiatives like "Make in India" and PLI schemes to name a few. However, to further enhance global competitiveness India needs to increase tech adoption, public-private partnerships, and workforce upskilling. 

At Panasonic, we are actively advancing modern manufacturing technologies to enhance global competitiveness, particularly through the Panasonic Green Impact (PGI) initiative. PGI underscores our commitment to reducing 1% global carbon emissions by 2050 across our operations, supply chains, and product lifecycle, aligning with global sustainability goals while driving manufacturing innovation. 

We are integrating smart factory solutions powered by IoT, AI, and data analytics to optimise energy consumption, minimise waste, and improve efficiency. Our advanced automation and robotics enable precision manufacturing, reducing defects and resource utilisation. Additionally, we are investing in green energy solutions, such as adopting renewable energy sources, energy-efficient production methods, and low-carbon materials. 

The global economic challenges have been outlined above. As a provider of smart factory solutions, the major challenge here is legacy system compatibility, outdated systems struggle to communicate effectively with new technologies due to differing communication protocols and data formats. Ensuring interoperability between legacy systems and modern technologies remains a challenge. This leads to difficulties in data integration and standardisation with newer processes.  Additionally, there are cybersecurity risks accompanying this integration, as legacy systems may lack updated security protocols, exposing them to vulnerabilities. 

The financial aspect cannot be overlooked; integrating these systems can be both costly and resource-intensive, necessitating substantial investments in hardware, software, and skilled personnel. Furthermore, change management poses a strain, as employees may find it challenging to adapt to the substantial changes in processes and workflows introduced by new technologies.

To address these challenges, industry must adopt digital transformation and embrace new-age technologies like IoT, robotics, AI/ML etc. Meanwhile, the government must continue to provide a conducive business environment, favorable policies such as PLI, enhance incentives, and foster R&D hubs to encourage innovation. These steps can help pave the way for accelerated growth and global competitiveness for India making it a manufacturing powerhouse for the world. 

At Panasonic Smart Factory Solution India (PSFSIN), we’ve developed a plug-and-play Industrial IoT platform known as Miraie Profactory. This is a one-stop solution for deployment, service and business intelligence needs. It empowers manufacturers to design paperless digitised shop floors, drive machine effectiveness, and maximise plant operations i.e., monitor production efficiencies right from procurement to finished assembly. The IIoT solution from Panasonic enhances the capabilities through vertical integration i.e. hardware and software to converge operation technology (OT) and information technology (IT) to have one comprehensive view. Data analytics further enhances the OEE by providing real-time insights allowing enterprises to optimise assembly units faster and efficiently through predictive maintenance, real-time monitoring, and quality management processes. Remote monitoring through mobile, and one dashboard for all operations with a unique UI are some of the additional features that will help automate and ensure contactless management.

According to industry estimates, India's industrial automation market, valued at $15 billion in 2024, is likely to grow to $29 billion by 2029, with transformative trends expected to pick up steam in 2025. Artificial Intelligence (AI) and Machine Learning (ML) will be integrated to further improve predictive maintenance, optimise operations, enhance decision-making, and create new use cases across industries as the industry adopts the Industry 5.0 concept, which aims to create a technology-based, human-centered society. With the help of connected devices and sensors, the Industrial Internet of Things (IIoT) will enable intelligent automation through real-time data collection and analytics. Collaborative robots (cobots) are anticipated to see wider adoption, working alongside humans to boost productivity and safety on shop floors. Furthermore, with 5G, 6G, and Satcom connectivity, edge computing will speed up, lowering latency and facilitating quicker data processing at the source for increased effectiveness.