AI can help manufacturing MSMEs create up to $150 bn in value by 2035

AI could enable $135-150 billion in value creation for manufacturing MSMEs by 2035, a PwC-ORF study says, stressing a human-centric, augmentation-first approach to technology adoption

Artificial Intelligence can contribute value creation of around $135.6–149.9 billion to manufacturing MSMEs by 2035, under a scenario where MSMEs account for 50 per cent of India’s gross manufacturing value added, a study by PwC India and Observer Research Foundation said.

 

“AI is no longer the preserve of large enterprises. Deployed as a co-pilot — not a replacement — it can help MSMEs break out of the low-productivity trap and compete on quality, speed, and innovation, while strengthening jobs and supply-chain resilience,” said Sanjeev Krishan, chairperson, PwC India, in a press statement. 

The report said that by lowering capability barriers and reducing the cost of scale, AI can help small firms improve consistency, meet global standards, and expand output faster. 

It said that MSMEs could participate by supplying non-tech-intensive capital goods such as harnesses, cooling equipment, and industrial components — opening a $100–150 billion manufacturing opportunity over time, given the large investments expected in data centres and semiconductor ecosystems. 

The study titled “Unlocking the AI Edge for MSMEs” stressed the need for a human-centric, augmentation-first approach to AI adoption.

 

Rather than displacing labour, responsible AI deployment can improve productivity, safety, and decision-making while preserving jobs, particularly in labour-intensive manufacturing clusters.

 

The report has proposed the “3A2I framework” — access, acceptance, assimilation, implementation, and institutionalisation — as a practical roadmap for MSMEs, policymakers, and ecosystem partners.

 

“If our nation fulfils its goal of raising manufacturing’s share of GDP to 25 per cent, and MSMEs increase their contribution to India’s manufacturing gross value added (GVA) from 35.4 per cent in FY2023–24 to 50 per cent by 2047, they stand to unlock growth opportunities in the range of $3.13–3.21 trillion by 2047,” the report said.