A Mirror Held Up to the Indian Industry

Every time an Indian industrialist returns from China, the conversation back home turns predictable: anecdotes about scale, photographs of glittering factories, and the comforting reassurance that “we are catching up.” After participating in the IMTMA CEO Delegation to China, I want to resist that comfort. The honest conclusion is harder. We are not catching up. The gap is widening, and unless we act with uncommon urgency and uncommon honesty, the gap will become structural and, in some segments, permanent.

This is not despair. It is a starting point. The Indian machine tool industry has talent, entrepreneurial energy, a vast domestic market, and a government finally willing to back manufacturing with sustained policy. But the visit to China made one thing clear: capability is built on decades of disciplined choices, not on hope, slogans, or one-off subsidies. If we want to be a serious player in the machine tool world, we have to make those choices now.

What the Numbers Actually Say
Let me start with the part that is most uncomfortable to say in a roomful of Indian manufacturers. China today accounts for roughly a third of global machine tool production and roughly a third of global consumption. India’s share of global production is around two per cent. Our domestic market is significant and growing. It is projected to cross USD 3.8 billion by 2030 at a healthy CAGR. The China market, by contrast, is already valued at around USD 25 billion in 2025 alone. That is not a gap of degree. It is a gap of order.

The more important data point, however, is not size but composition. The CCMT 2026 exhibition, the 14th edition of the China CNC Machine Tool Fair held in Shanghai from 21 to 25 April 2026, brought together over 1,900 exhibitors and around 120,000 professional visitors across 200,000 square metres and 17 halls of the Shanghai New International Expo Centre. The show was dominated by Chinese OEMs not in volume machines, but in the high-end. Five-axis simultaneous machining centres. Seven-axis configurations. Mill-turn centres handling components nearly three metres in diameter for aerospace and energy applications. Domestic CNC system makers like Huazhong CNC launched intelligent generation controllers with embedded AI chips capable of autonomous perception, learning and decision-making on the machine itself. Chinese builders openly claimed made in China 85 % and above on key components and software, with machining performance comparable to German and Japanese benchmarks.

A decade ago, this would have been marketing copy. Today, on the shop floor, it is increasingly accurate.

Five Observations Worth Carrying Home
A few patterns stood out across the visits and conversations during the delegation. They are worth setting down plainly, because each implies a course of action for us.

The first is that China has translated policy into industrial capability with rare consistency. “Made in China 2025” was announced a decade ago. Its target for domestic high-end CNC machine tools to capture more than 80 per cent of the local market was ridiculed in the West at the time. The Chinese govern-ment, working hand-in-glove with CMTBA and a few anchor companies, has executed that plan year after year. India announces. China executes.

The second is that R&D investment in Chinese machine tool firms has reached intensities we rarely see in India. Genesis Group, for instance, increased its Q1 2025 R&D spend by over 40 per cent year-on-year. Across the sector, leading Chinese builders are funnelling resources into core functional components, CNC controllers, and basic technology research, not just into assembly and packaging.

The third is the depth of the supply chain. Consider bearings, ballscrews, linear guideways, spindles, encoders, electrical drives, and CNC controllers. China has serious domestic suppliers in each of these categories. India, despite some excellent firms, still imports the most critical of these. The OEM is only as competitive as its weakest supplier, and our weakest suppliers are too often foreign.

The fourth is the integration of AI, IoT and digital manufacturing into the machine itself, not as an afterthought. CIMT 2025 was organised under the theme of “Integrated Innovation for a Smart Future,” and almost every serious Chinese exhibitor demonstrated AI-driven control systems, predictive maintenance, digital twins, and tool-life optimisation built into the machine controller. This is the new baseline. A machine without intelligence is, increasingly, a commodity.

The fifth is the cultural confidence. Chinese builders no longer speak in terms of catching up with Germany or Japan. They speak in terms of competing with them globally. That mental shift, from import substitution to export ambition, is in many ways the most important change of all.

What India as a Nation Must Do
Closing this gap is not the responsibility of machine tool builders alone. It requires a national posture. A few specific shifts are non-negotiable.

We need a focused, long-horizon industrial policy for machine tools, treated as a strategic sector in the same way semiconductors and defence are now treated. This means PLI-style incentives tied to genuine R&D outcomes, not just turnover; differential duty structures that reward domestic value addition in critical components; and procurement preferences in defence, railways, aerospace and energy PSUs for indigenous high-end machine tools that meet specification.
We need patient capital. Building a competitive 5-axis machining centre is a five-to-seven-year journey, not a two-year cycle. Indian banks, venture capital and family offices need vehicles tailored to engineering-led businesses where returns are real but slow.

We need a serious skills mission for advanced manufacturing. Multi-axis programming, control-system software, precision metrology, additive manufacturing: these are the skills that decide whether an OEM is a follower or a leader. The IMTMA Technology Centre and a few private initiatives are doing excellent work, but the scale is nowhere near what the country requires.

And we need academic and industrial R&D to finally talk to each other. IIT and IISc faculty publish world-class research that rarely reaches the Indian shop floor. Chinese universities, by contrast, are tightly woven into the commercial fabric of their national OEMs. Indian R&D institutions, OEMs and component suppliers need permanent, funded mechanisms to collaborate, not occasional MoUs that gather dust.

What Machine Tool Developers Must Do
Policy will help, but it will not save us. The most important changes have to come from inside our own companies..
Acquire technology aggressively and intelligently. Build it where we can, license it where we cannot, and acquire it through joint ventures, technology transfer agreements, or outright acquisition of distressed European firms where the economics work. Indian OEMs have been too proud and too cautious in equal measure. China was not too proud to learn from anyone in the 1990s and 2000s, and that humility has paid for itself many times over. We should do the same: selectively, with clarity about what we want, and with a plan to absorb and indigenise what we acquire.

Treat R&D as a profit centre, not an expense. A serious Indian machine tool company today should be spending five to seven per cent of its turnover on R&D, with a meaningful share going into core functional components and controllers, not just product variants. The companies that build CNC controllers, high-precision spindles, and motion-control software in India over the next decade will own the industry’s future.

Make Innovation and Kaizen the operating system of the company, not slogans on a wall. Kaizen is not a quality department’s job. It is a cultural commitment to small daily improve-ments in every function: design, procurement, assembly, after-sales, finance, HR. In R&D specifically, this means structured idea pipelines, fast prototyping, ruthless review of failed projects, and an honest tolerance for failure that is so rare in Indian enginee-ring culture. The Japanese taught the world that consistent, compounded improvement beats episodic genius. The Chinese learned this lesson. We have read it. We are yet to live it.

Invest in the supply chain you depend on. If your spindle supplier is weak, you are weak. The strongest Indian OEMs of the next decade will be those that develop, mentor and sometimes co-invest in their tier-1 and tier-2 suppliers. Precision engineering is a system sport.

AI: The Multiplier We Cannot Ignore
A final point, because it is no longer optional. Artificial intelligence is now embedded across the manufacturing value chain: design, process planning, predictive maintenance, quality inspection, energy optimisation, supply-chain forecasting, and customer service. Credible research now estimates that AI can compress product development cycles by up to half, and that the AI-in-manufacturing market itself is on track to grow from around USD 34 billion in 2025 to over USD 150 billion by 2030.

For an Indian machine tool company, AI is no longer a CTO conversation. It is a CEO conversation. Three areas deserve immediate attention.

In product, AI must be embedded into the controller and the machine itself: adaptive control, tool-wear prediction, thermal compensation, anomaly detection. A machine that does not learn from its own data is, increasingly, unsellable in serious markets.

In R&D, generative design and AI-assisted simulation can dramatically accelerate concept-to-prototype time. Creativity is no longer the bottleneck it used to be. The bottleneck now is whether our engineers are trained and trusted to use these tools.
In operations and back-office functions, AI agents for procurement, planning, customer support and documentation can free up senior engineering bandwidth for the problems that actually matter. Productivity gains here are real and immediate, and the smaller the company, the larger the relative benefit.

The mistake to avoid is treating AI as a project. It is a competence to be built into every function, just like quality once was.

Precihole Machine Tools Pvt. Ltd.
Web : www.precihole.com