New Delhi: India must accelerate AI-led innovation, industrial automation, and the adoption of frontier technologies to fully realize its manufacturing ambitions, according to The Make-in-India Upgrade: Advanced Manufacturing Trends, a December 2025 chartbook by Ionic Wealth. India stands at a critical juncture in its industrial journey, with advanced manufacturing emerging as a decisive lever for long-term economic competitiveness.

The report noted that failure to unlock advanced manufacturing could leave India with a manufacturing GDP gap by the 2047 Viksit Bharat vision. Under a business-as-usual scenario, manufacturing GDP would reach only USD 2.3 trillion, far below the USD 7.4 trillion potential, highlighting what the report calls a “significant gap” if decisive action is not taken.

At the core of the recommended strategy is AI-led innovation and productivity gains, combined with automation, digitisation, and product and process innovation. The report stated that AI-led innovation and productivity gains, along with industrial automation and the adoption of frontier technologies, are key enablers of India’s manufacturing progress. These technologies can help Indian firms move up global value chains, reduce costs, and compete with manufacturing powerhouses.

India has already made progress on foundational reforms. The report noted advances in labor code implementation, GST rationalization, easing of FDI norms, land reforms, and infrastructure modernization, including single-window digital clearances under PM Gati Shakti and the rollout of the National Logistics Policy.

Large investments such as Micron’s USD 2.75 billion semiconductor assembly plant and Google’s combined USD 25 billion commitment to digitization and AI-led data centers are cited as early indicators of momentum.

Looking ahead, the report highlighted that emerging and PLI-linked sectors are expected to contribute 27 per cent of industrial capital expenditure over the next decade, with average annual capex projected to rise from Rs 4.3 lakh crore in FY21–FY25 to Rs 7.1 lakh crore in FY26–FY30.

Sectors such as advanced electronics, clean energy, next-generation automotive technologies, aerospace, and AI-cloud-cyber stacks could collectively drive USD 1.4–1.9 trillion in GDP growth by 2035. Additionally, the adoption of frontier technologies—including AI/ML, robotics, digital twins, 3D printing, advanced materials, and smart grids—could boost India’s manufacturing GDP by USD 1.1 trillion, the report estimated.

The Ionic Wealth report also cited NITI Aayog, which had earlier stated that advanced manufacturing is no longer optional—it is the foundation of India’s global competitiveness in the next decade.