The second day of the recent 'India AI Impact Summit' in Delhi focused entirely on a critical issue: how prepared are our nation’s small and medium-sized factories for modern technology? People often assume that advanced machinery and smart computers are reserved for giants like Reliance or Tata. However, the truth is that AI in MSMEs is no longer a luxury—it has become an absolute necessity for survival in the market.
This major event saw participation from top policymakers across the Ministry of Electronics, the MSME Department, and the textile and pharmaceutical industries. Their direct goal was to discuss policies that offer tangible benefits to ordinary factory owners.
During the meeting, a significant research project was launched, jointly developed by NISG and Athena Infonomics. This study will go beyond paperwork; it will collect real-world data by visiting ground-level factories involved in pharmaceuticals, electronics, and textiles.
The objective of this research is to find a path that makes adopting technology easier and more affordable for small industries. S. Krishnan, a senior official from the Ministry of Electronics, stated clearly that the true benefit of technology lies in its ability to enhance production capacity at the ground level. The economy cannot improve through mere empty talk.
Most factory owners panic at the mention of "automation," fearing it involves costs running into crores. Mr. S. C. L. Das, Secretary of the MSME Department, addressed this fear by describing AI as a "great force multiplier." He explained that to compete globally, we must make our shop-floor operations smarter. We cannot win the global race using outdated methods.
If you look at the figures from the Economic Survey (2025–26), the picture becomes crystal clear:
Small industries contribute more than 31% to our total economy (GDP).
They account for 35.4% of the country's total manufacturing output.
Nearly half (48.6%) of the goods we export are produced by these small factories.
With the goal of becoming a $35 trillion powerhouse by 2047, these factories cannot be left to fend for themselves. Providing them with affordable financing and linking them to global markets has now become a top government priority.
Policies will no longer be made only in air-conditioned rooms. This new survey will cover over 350 small manufacturing units across the country. The team will speak directly with everyone from laborers to owners to understand the actual hurdles in adopting the best production technologies.
NISG head Bhuvnesh Kumar believes this research will create a solid roadmap. Meanwhile, officials from the textile and pharma sectors agreed that AI improves quality control and significantly reduces the rate of defective goods. Lowering costs leads directly to increased profits.
The conclusion is clear: smart governance and government AI schemes are no longer confined to paper. This summit proves that both the government and the industry realize that without strong small factories, India’s progress will remain incomplete.
How can I implement AI in my factory without a massive budget?
You don't need to overhaul your entire system at once. Start with affordable cloud-based software for inventory management or quality checks. These tools are easily available on a monthly rental basis (SaaS), allowing you to understand the power of tech without heavy investment.
Will machine learning take away jobs or create new ones?
Machines will take over repetitive tasks. However, there will be a massive demand for skilled operators to run those machines, understand data, and manage new systems. This is an upgrade of roles, not a layoff. Encourage your team to learn new skills.
How can these smart tools reduce MSME production costs?
Smart sensors alert you before a machine breaks down, saving you from losses caused by production halts. Additionally, getting an accurate estimate of raw materials reduces wastage to almost zero.
Will new technology work on my old machines?
Absolutely. There are many IoT (Internet of Things) devices available today that can be retrofitted onto decades-old machinery. These small sensors send data from the old machine directly to your phone or computer.
What direct benefit will I get from these new government schemes?
Under these new policies, the government is providing special subsidies and easy loans for technology upgrades. Furthermore, a new digital platform is being developed to help you reach global buyers. Check the details of these schemes with your CA or local industry center today.
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