The Indian manufacturing sector is set to allocate higher investment - 11-15 per cent of their budget - towards adopting smart technologies to boost digital transformation in the next two years, a CII study showed on Sunday, as most manufacturers recognise technology adoption as a critical driver of profitability and competitiveness.

The increase in investments is expected in areas like the Internet of Things (IoT), robotics and Big Data.

"Current investments remain modest, with many allocating less than 10 per cent of their budgets. However, a shift towards higher investment -targeting 11-15 per cent of budgets - is expected in the next two years," said the 'Manufacturing Competitiveness Study'.

"India's manufacturing landscape is undergoing a significant transformation, driven by the rapid adoption of innovative technologies," said Deepak Shetty, Chairman of the Council on Manufacturing Excellence, CII.

This report explores the technological revolution reshaping manufacturing, highlighting how smart technologies are essential for boosting productivity and efficiency.

"By embracing these advancements, India can gain a competitive edge globally and establish itself as a manufacturing leader," he mentioned.

The report showcased how cutting-edge technologies such as IoT, artificial intelligence (AI), machine learning (ML), robotics and automation are reshaping the manufacturing landscape, driving optimisation, innovation, and global competitiveness.

High-capital industries like semiconductors, aerospace, and automotive are leading the charge in adopting these technologies, while traditional sectors like textiles and food processing are gradually transitioning towards digitalisation.

Additionally, the report underscores the urgent need for workforce upskilling to bridge the skills gap and enable seamless adoption of advanced technologies.

To address these barriers, the study recommended fostering public-private partnerships to establish shared technology hubs, increasing budget allocations for technology, strengthening industry-academia collaboration, and implementing supportive policies to encourage broader adoption of smart manufacturing.

"This report highlights a transformative moment for India's manufacturing sector, where advanced technologies are reshaping processes and addressing challenges like supply chain visibility to drive industrial excellence," said Deepak Jain, Co-Chair of the Council on Manufacturing Excellence, CII.