How a focus on industrial robots can boost Indian robotics startups and do for the world

There is a huge shift in global manufacturing. We have entered the golden age of industrial robotics adoption. Organizations around the world are actively seeking robots and automation to protect against disasters and political volatility. A recent McKinsey survey found that 67% of companies surveyed have accelerated their adoption of automation, including robotics and artificial intelligence.

India has an incredible opportunity ahead of us. India’s robotic startup ecosystem can be as successful as India’s SaaS and grab a global market share. However, we need to overcome a few hurdles that Indian robotics startups face today to achieve this.

Key Factors Driving the Adoption of Industrial Robotics

The desire to increase robotics is due to several factors. Companies are trying to reduce their dependence on manual labor for low-skilled and repetitive tasks. Additionally, many global organizations have faced severe supply chain disruptions during COVID-19. This has accelerated the trend of relocating manufacturing, particularly to the United States, to mitigate risk.

Take the example of the recent semiconductor shortage crisis. In the wake of the crisis, Intel allocated $20 billion to factories in Arizona to build their own chips locally. Taiwan Semiconductor Manufacturing Company (TMSC) also plans to spend billions of dollars and develop up to six factories in the United States. The United States government is also looking to increase local manufacturing. The recently approved Infrastructure Bill of 2021 has $300 billion allocated to boost manufacturing in the United States.

About $50 billion has been targeted separately for semiconductor manufacturing alone. As businesses relocate from lower-cost locations, the adoption of robotics becomes essential. Higher productivity with robotics is needed to offset higher labor costs.

A Huge Global Market Opportunity

The global robotics industry is expected to grow rapidly at a CAGR of 18.2% to reach $176.8 billion by 2025. This vast market offers unique opportunities to the Indian robotics ecosystem. With its pool of software talent, India has long been a preferred destination for product development.

So there is an opportunity to make India a global provider of robotic solutions. If we capitalize on this opportunity now, India’s robotics ecosystem can be as huge as India’s SaaS.

The SaaS ecosystem in India has spawned global market leaders like Freshworks, Zoho, and Chargebee. Through significant investments, we have leveraged our talent pool to create a vibrant ecosystem. Indian SaaS startups have raised a staggering $4.3 billion since 2020.

There are currently 14,443 SaaS startups in India. We can replicate this success in the field of robotic solutions, but some obstacles remain.

Capitalize on the robotics opportunity

Indian startups are already looking to take advantage of the global market opportunities created by these tectonic shifts in manufacturing. There are currently around 43 industrial robotics startups in India.

Indian industrial robotics startups have raised around $216 million in funding from investors. It’s a good start but not enough. To tap into the huge opportunity ahead, we need to accelerate and scale up investments in the ecosystem.

Moreover, policy changes are needed to facilitate the operation of robotics startups in India. For example, providing SEZ (Special Economic Zone) type import rights by category will benefit startups regardless of their location.

Robotics startups have to import several components from outside the country. However, to receive the benefits of import duties for a product intended for export, they must be located in an SEZ. This can be prohibitively expensive for a fledgling startup. Startup-friendly policy changes can be a significant help.

We need smart robots

There is a race to unlock a great unresolved opportunity to increase the applications of industrial robotics in manufacturing. Today, the main focus is on the application of robotics and automation in warehousing and distribution. Several manufacturing tasks are still too complex for robots but simple for humans.

With the technology available today, these tasks are difficult to automate. Activities such as “pick and place” involve picking up items from a bin, orienting yourself correctly, attaching bolts, nuts, screws and washers. This is why manufacturers still need labor to perform repetitive low-skilled tasks. These automatable tasks represent nearly $15.8 trillion in wages (McKinsey report).

Robots built with current technology also require high initial customization costs and lack flexibility. For ROI to work, manufacturers need product design to remain consistent for at least five to seven years after a robot is calibrated. This is not always possible in today’s rapidly changing world with shorter product life cycles. This limits wide-scale adoption in manufacturing.

What we need is to develop adaptable robots that can visualize and understand objects and tasks like humans. Advances in machine vision technology can make this possible. These intelligent robots can facilitate the creation of product-independent universal factories.

They can be considered a key long-term infrastructure asset. Unleashing this opportunity can make India a sought-after destination for global robotic solution needs. It will also help increase the adoption of robotics in India by providing better return on investment for local manufacturers.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

Mavis R. Bernier