India’s Industrial AI Funding Set for 10X Growth by 2030: Insights from YourNest VC & Praxis

India’s Industrial AI Funding Set for 10X Growth by 2030: Insights from YourNest VC & Praxis

New Delhi, 5^th April’26: At a time when nearly every large manufacturer in India is experimenting with – or scaling – AI on the shopfloor, the capital required to fuel this transformation is only just beginning to catch up. As the largest investment opportunity on the horizon, Industrial AI which was once confined to pilot projects, is now delivering measurable impact, yet remains significantly underfunded relative to its potential.

According to a comprehensive insights report by YourNest Venture Capital, India’s leading DeepTech VC fund, in collaboration with Praxis Global Alliance, Industrial AI funding in India is projected to grow ten-fold by 2030 from its current base of approximately $150 million in 2024. This sharp rise reflects a structural shift from cautious experimentation to conviction-led investments as enterprises increasingly prioritise AI-driven transformation.

What makes this shift particularly significant is the demand-side maturity. The report highlights that nearly 90% of manufacturing enterprises in India are already experimenting with AI, marking a decisive move from discretionary tech spending to it becoming a core indispensable operational priority. This widespread adoption is not driven by hype, but by tangible outcomes that directly impact the bottom line.

Industrial AI is delivering clear, measurable value across manufacturing environments, including 30-50% reduction in unplanned downtime, 10-40% lower conversion costs, 5-15% improvement in yields, and up to 30% increase in throughput. These results are enabling faster payback cycles, making AI investments increasingly viable at scale and strengthening investor confidence in the sector.

At the same time, early signals of capital deepening are already visible. The report notes that average deal sizes have grown nearly fourfold to around $8 million between 2021 and 2025, indicating that investors are moving beyond small, exploratory bets toward larger, scale-oriented investments with greater conviction. However, overall funding remains limited when compared to the size of the opportunity, pointing to a clear gap between market readiness and capital deployment.

Sunil K Goyal, Managing Director & Fund Manager, YourNest Venture Capital, said, "In India, enterprise adoption of industrial AI has significantly outpaced capital deployment at this pivotal moment. The end-customer is sending out a signal that is being picked by startups who are developing powerful products to make shopfloors more efficient and profitable. We ourselves are seeing increased traction with our early bets in Industrial AI where quantifiable ROI, is lowering downtime, increasing throughput, and optimising costs.. In spite of this, financing is still disproportionately low given the magnitude of the potential. This gap makes it attractive for far-sighted investors to get involved now in creating IP-led, high-impact DeepTech businesses.. At YourNest, our focus is on funding globally competitive Industrial AI leaders from India in our next fund.”

Speaking at the report launch, Ram Soni, Partner, NextGen Industrials, Praxis Global Alliance, said, “India’s manufacturing sector is entering a decisive decade. The factories that win will be those that move beyond pilots embedding AI as a shopfloor-first capability with clear, measurable impact on OEE, downtime, yield, and energy. This report captures the ground truth of where that transformation stands today: what is working, what is not, and what manufacturers, founders, and investors must do next to unlock the full potential of intelligent manufacturing in India.”

Beyond immediate operational gains, the report underscores the broader economic significance, estimating that it could contribute nearly $150 billion in incremental manufacturing output by 2030. This positions Industrial AI as a critical enabler of India’s manufacturing ambitions, particularly as the country benefits from policy support, supply chain diversification, and growing domestic demand that will collectively contribute to self-reliance.

The report also positions the sector as a core pillar of India’s DeepTech ecosystem, alongside sectors such as robotics, advanced manufacturing, and engineering-led innovation. Unlike traditional software segments, their solutions are deeply embedded within industrial processes, creating high entry barriers, strong defensibility, and long-term value creation potential.

While challenges such as integration with legacy systems and data readiness persist, they are increasingly being addressed as part of broader digital transformation efforts. As enterprises continue to scale deployments and investors deepen their participation, the ecosystem is expected to mature rapidly.

About YourNest:

Now in its 15^th year, YourNest, established in 2011 as a technology-focused Pre-Series A fund house, has pioneered investing in DeepTech and IP-led product innovations by infusing Nurture Capital alongside financial commitments. Focused on emerging technologies to enhance the way mankind leverages the value of time, YourNest aims to create an opportunity for Indian entrepreneurs to scale into global markets. Many of YourNest’s portfolio companies across its three funds have secured patents and attracted Fortune 500 Companies as customers. YourNest’s funds consistently feature amongst the best-performing AIFs as per the CRISIL AIF Performance Reports.

About Praxis Global Alliance

Praxis Global Alliance is the next-gen management consulting firm revolutionising how consulting projects are delivered. It delivers practical solutions to the toughest business problems by uniquely combining domain practitioner expertise, AI-led research approaches, and digital technologies. The company operates three business units, including Praxis Global Alliance Financial Investor Group (FIG), offering pre-deal support, commercial due diligence and post-acquisition value creation; Praxis Global Alliance Business Enablement and Transformation (BET) for practitioner-led business advisory and consulting; and PraxDigital™ delivering data engineering and analytics, AI, OpenData and visualization solutions to clients across verticals. Present in 4 locations in India, Praxis Global Alliance has successfully served 40+ countries with a team of over 200+ consultants and data scientists.

For more details, please visit: www.praxisga.com

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