AI may add $150b to India’s manufacturing MSMEs by 2035: PwC

A PwC report projects AI could add US$135.6–149.9 billion to manufacturing MSMEs in India as early as 2035 if MSMEs account for 50 percent of India’s manufacturing gross value added (GVA).

The report says MSMEs could unlock US$3.1–3.2 trillion by 2047 if India raises manufacturing’s share of GDP to 25 percent and MSME manufacturing GVA rises from 35.4 percent in FY 2023-24 to 50 percent.

PwC highlights a US$100–150 billion demand opportunity for MSMEs to supply harnesses, chambers, cooling equipment, and other non‑tech‑intensive products to AI infrastructure and chip manufacturers, and notes non‑tech‑intensive capital goods account for about 20–30 percent of capex on such projects where MSMEs are present.

The report projects AI is expected to contribute US$1.7 trillion to the economy by 2035 and estimates US$500 billion of investment will be needed for AI infrastructure.

PwC lists use cases such as predictive maintenance, vision‑led quality control, and intelligent inventory management and frames AI as a “Scaler”, “Enricher” and “Reinventor” for MSMEs.

🔗 Source: The Economic Times

🧠 Food for thought

Implications, context, and why it matters.

Government policy and corporate capital are fueling India’s AI ambitions

Government plans back rising AI use, led by the IndiaAI Mission with a five-year budget of ₹10,371.92 crore 1.
Big tech spending is set to follow, with Microsoft, Google, and Amazon committing about $67.5 billion for cloud and AI infrastructure in India through 2030 1.
Data rules are also shaping investment, since draft language tied to the Digital Personal Data Protection Act says sensitive personal data and AI-training data must stay inside India 1.
Industry policy also targets a full-stack tech base, including semiconductors (the chips that power everything from smartphones to data centers), to cut dependence on imports 2.

India’s AI push is a play for supply chain security and strategic autonomy

Domestic AI capacity and chip production are framed as steps toward resilience and self-reliance in technologies India treats as essential 2.
Security concerns shape choices, as seen when India blocked Huawei and ZTE (major Chinese telecom equipment makers) from 5G trials over national security risks 3.
Talent is part of the pitch, with the draft putting India at nearly 20% of the world’s semiconductor design engineers 2.
The broader aim is steadier supply chains plus more strategic autonomy as global competition over core technologies grows 3.