India AI Hardware Push Could Boost Local Makers

Purushothaman KG, national AI leader and head of technology transformation at KPMG in India, said the next stage of AI growth will extend into “physical AI,” creating opportunities for domestic producers of AI-enabled devices. He said India should seize that opportunity as global spending accelerates around embodied AI systems and connected hardware.

The argument fits New Delhi’s broader push to move from being a services powerhouse to a maker of products. India has already used telecom production-linked incentive schemes and proposed manufacturing zones to encourage local output, and policymakers are now trying to position the country to capture more of the value chain as demand grows for cameras, sensors, embedded software and network equipment.

For investors, the implication is that India’s AI story may increasingly favor local manufacturers, telecom equipment makers and industrial technology suppliers rather than only software exporters. It also points to a potential import-substitution tailwind for firms able to meet domestic demand as enterprise customers expand into data centers, healthcare, fintech and digital transformation.

The timeline also matters. Purushothaman said commercial 6G rollout is unlikely before 2029 or 2030, giving India time to build out network architecture, hardware and embedded software before the next upgrade cycle. That creates a runway for capital spending, vendor partnerships and policy support, but also a risk that India remains a buyer rather than a producer if local capacity does not scale fast enough.