Walk through any modern Indian factory today, whether an automotive plant in Tamil Nadu, an electronics assembly unit in Noida, or a pharmaceutical facility in Hyderabad, and one thing is immediately evident: machines are becoming smarter. Automation, AI, connected systems, and advanced analytics are steadily reshaping how goods are made.
But amid this technological progress, an important question remains: are we investing as much in people as we are in technology? The answer will determine whether India merely adopts advanced manufacturing technologies or converts them into sustained productivity and global competitiveness.
The evidence suggests that a significant gap persists. According to the 2026 State of Smart Manufacturing Report, 97% of surveyed manufacturers in India consider digital transformation essential to their future competitiveness. Yet workforce-related challenges continue to rank among the principal barriers to scaling smart manufacturing.
Closing this gap requires a clearer understanding of the capabilities that modern manufacturing now demands.
India has set ambitious manufacturing goals. The country aims to achieve 25% manufacturing GDP by 2047, while generating employment and advancing the vision of Viksit Bharat. Achieving these goals will require more than smart factories and advanced technologies. It will require a workforce capable of operating, adapting to, and innovating with those technologies.
In addition, as global supply chains diversify, countries will compete not only on cost and scale, but also on the quality, adaptability and digital fluency of their industrial talent. India’s ability to establish itself as a trusted global manufacturing destination will therefore depend on how effectively it prepares people to work in increasingly connected and technology-intensive industrial environments.
{{/usCountry}}In addition, as global supply chains diversify, countries will compete not only on cost and scale, but also on the quality, adaptability and digital fluency of their industrial talent. India’s ability to establish itself as a trusted global manufacturing destination will therefore depend on how effectively it prepares people to work in increasingly connected and technology-intensive industrial environments.
{{/usCountry}}India has one of the world’s largest working-age populations, yet formal vocational training remains limited. As per the 2025 Periodic Labour Force Survey data only 4.2% of the workers, among the age group 15-59 years, have received formal skills training, highlighting the scale of the capacity-building challenge.
The challenge is not simply a shortage of technical knowledge. Manufacturers increasingly need people who can interpret production data, work safely alongside automated systems, troubleshoot across mechanical and digital domains, and improve processes continuously
The question is no longer whether technology will transform manufacturing. That transformation is already underway. The real question is whether the workforce can evolve alongside it.
As manufacturing evolves from automation to autonomy, the skills required on the shop floor are also changing. Success will increasingly depend on workers who can collaborate with intelligent systems, interpret data, solve problems across physical and digital domains and continuously adapt to new technologies. The ability to learn is decidedly becoming as important as the knowledge people possess going ahead.
India’s own industrial development offers useful lessons in how technology adoption and workforce development can reinforce each other.
The development of automotive clusters in Chennai, Pune, and Gurugram suggests that capital investment is most effective when accompanied by technical education, supplier development, apprenticeships, and industry-academia collaboration
These interconnected investments helped create manufacturing ecosystems capable of meeting global standards of quality, productivity and scale.
A comparable opportunity is emerging today in semiconductor, electronics manufacturing, aerospace, and precision engineering. In each of these sectors, competitiveness will depend as much on human capability as on technological sophistication.
Factories may become more automated, but manufacturing excellence remains fundamentally dependent on people. Workers must interpret information, exercise judgement, solve unfamiliar problems and continuously improve production systems. Technology can augment these capabilities, but it cannot eliminate the need to develop them.
Encouragingly, some of the technologies transforming manufacturing can also help address the skills challenge.
Digital twins, immersive simulations, augmented-reality platforms and AI-assisted tools are changing the way industrial training is delivered. Instead of depending exclusively on classroom instruction, employees can practise complex procedures in virtual environments that replicate real shop-floor conditions.
A technician can learn to diagnose a simulated production-line fault before working on physical equipment. A new employee can become familiar with safety procedures in a controlled environment. Contextual digital guidance can support maintenance teams as they perform unfamiliar tasks, helping employees learn while working.
These tools are not a substitute for trainers, apprenticeships, or supervised practice. Their value lies in making learning safer, more repeatable, and more accessible, particularly when they are integrated with real equipment, qualified instruction, and measurable competency standards
For MSMEs, shared training infrastructure, modular content, and cluster-based access models could make these tools more practical and affordable.
In this sense, smart manufacturing can become a catalyst for smart skilling. Technology need not only create demand for new capabilities. It can also help people acquire them.
India's demographic dividend is often described as one of its greatest strengths. But demographics alone do not guarantee economic success. A young population becomes a productive workforce only when equipped with relevant, industry-aligned skills.
In an era where nations are competing to attract advanced manufacturing investments, skills capacity may prove to be as important as physical infrastructure, incentives, or access to capital. The future of manufacturing competitiveness will depend on an organization's ability to advance smart manufacturing and smart skilling simultaneously.
Developing those capabilities will require closer and more sustained collaboration among government, industry, academia, technology providers and industry bodies.
- Align education with industrial demand: Educational institutions and manufacturers should jointly update curricula, expand faculty exposure to industrial environments, and give students more access to current equipment, software, and operational problems.
- Treat learning as operational infrastructure: Manufacturers should integrate skills development into technology deployment, maintenance planning, performance management, and career progression rather than treating training as a one-time recruitment requirement.
- Build regional training capacity: Public and private partners should expand Centres of Excellence, shared laboratories, apprenticeships, and modular credentials in emerging manufacturing clusters, including Tier 2 and Tier 3 cities.
- Measure capability, not participation: Programmes should be assessed through demonstrated competencies, safety performance, problem-solving ability, productivity gains, and employment outcomes, not only enrolment or course-completion figures.
NITI Aayog's Focused State–Focused Sector–Focused Technology framework offers an important blueprint. Skills development cannot be generic; it must be tailored to the unique strengths and needs of regional manufacturing ecosystems.
India’s manufacturing future will not be determined solely by the sophistication of its machines. It will also be shaped by the capabilities of the people who operate, maintain and improve them.
The coming decade is likely to bring substantial investment in automation, artificial intelligence, robotics, connected systems and digital infrastructure. Converting that investment into sustainable productivity and competitiveness will require an equally serious commitment to workforce development
The challenge is too large for any single institution to address. India needs an ecosystem in which industry, academia, government, technology providers and industry bodies continuously align education and training with evolving industrial needs.
If India succeeds in building a workforce that is skilled, adaptable, and digitally fluent, it will not merely emerge as a major global manufacturing hub. It will lead the next generation of industrial manufacturing.
Realising the promise of a manufacturing-powered Viksit Bharat will require the country to invest in people with the same urgency with which it invests in technology. Smart factories can fulfil their potential only when they are supported by smart, skilled and future-ready workers.
(The views expressed are personal)
This article is authored by Dilip Sawhney, managing director, Rockwell Automation India, Gurugram.