The Infrastructure behind Industrial Growth

Ask anyone about Indian manufacturing and you’ll hear the same story: PLI schemes, supply chains moving out of China, new factories coming up across the country. And honestly? The tailwinds are real. But India still makes only about 13-14% of its GDP in manufacturing, well short of Vietnam, Thailand or China. Closing that gap takes more than adding capacity.

The Infrastructure behind Industrial Growth

So we asked a different question. If India manufactures significantly more over the next decade, what new businesses have to exist around the factory for that to happen?

A modern factory doesn’t run alone. Someone has to finance its raw materials, move its goods, cut its energy bill, train its operators, keep its shop floor safe and protect its connected machines from attack. For a long time these were manual, fragmented cost centres. Increasingly, they are becoming standalone markets.

At Malpani Ventures, we mapped 14 sub-sectors across four layers, from robotics and MES to logistics, working capital, green materials, workforce training and OT cybersecurity.

MV Manufacturing enabler framework

Four things we learned

1. The pain is real, the budget holder is hard to find. In Pune alone, auto-component plants need about 27,000 new skilled workers a year while local institutes produce about 5,000 relevant graduates. Safety is bought by EHS teams with small budgets. Cyber is bought by IT. For the plant, it is one problem. For the startup, it is three sales cycles.
2. Mandates create urgency, not moats. A domestic carbon market now binds about 490 industrial entities, the EU’s carbon border levy has applied to Indian steel, aluminium and cement since January 2026, and top listed companies must have their ESG data assessed or assured from FY 2026-27. Every new mandate creates a filing, and every filing attracts vendors. When four products automate the same form, the form is not the moat.
3. Working capital is part of the product. TReDS (Trade Receivables Electronic Discounting System) invoice discounting grew from about ₹40,000 crore in FY22 to ₹3.47 lakh crore in FY26. Companies that can offer payment terms, or plug into rails like TReDS, win accounts a better product cannot. But somebody funds the gap, and the strong businesses price it explicitly.
4. The attack surface is now the supply chain. Ransomware attacks on manufacturers rose 56% in 2025 to 1,466 incidents. A 2025 cyberattack halted Jaguar Land Rover’s UK plants for about five weeks and reached more than 5,000 organisations in its supply chain. A supplier outage is an OEM outage.

So where do we actually lean in?
We have mapped our perspective in each of the layers in the MV Manufacturing enabler framework.
For instance, when we map the four sub-sectors of Supply Chain, Trade & Capital on two questions, how urgent is the buyer’s pain and how defensible is the business once it’s built, a clear pattern shows up.

The chart is our qualitative view, not measured data, and we expect founders to argue with it

What the strongest businesses do differently

• They win the second deployment. A first deployment is often bought on belief. A second has to be bought on evidence, usually by a different budget holder. Time to commission the second site is one of the best signals we know.
• They treat pilots as a test. A free pilot says the customer is curious. A paid pilot says a budget exists and someone is accountable. The founders who convert agree up front on what success looks like and who signs the follow-on.
• They build for the brownfield plant, not the demo room. Indian factories run mixed-vintage machines, patchy networks and customised processes. The companies that scale treat retrofit compatibility and commissioning downtime as product features.
• They turn the mandate into something customers would pay for anyway. Compliance gets you the first meeting. Verified savings, financing access or supplier data get you the account.

The report also showcases our bets and conviction in these areas.

One more warning, for the aggregators. Marketplaces that connect brands to factories do well on revenue but struggle on margin. Once a brand has run two or three production cycles, it knows the factory, the price and the quality bar. The test is simple: if the customer could place the next order directly, what is the reason they still come back to you?

Read the full report here

Our View at Malpani Ventures

We are bullish on manufacturing tech in the right niches. As a family office, we are not bound by fund life-cycles, and we know the journey here is closer to a decade than a quick 4-6 year VC flip. If a company is deploying reliably on the factory floor, earning a tier-1 customer reference and managing working capital carefully through long sales cycles, we are comfortable backing it even when the revenue chart doesn’t look pretty yet.

If you’re a founder moving from pilot to repeatable deployment across plants, our cheque size is ₹2 to 10 crore, with follow-on capacity based on progress. You don’t need a VC that gets nervous when a sales cycle stretches or a large rollout slips a quarter. You need one that understands why manufacturing sells slowly, and stays the course anyway.

Building a business is hard everywhere. It is harder when your customer is a 40-year-old brownfield factory, your sales cycle is measured in plant visits, and your product has to work in conditions no demo ever prepares you for. The founders building the unglamorous layer around manufacturing are as important to India’s industrial future as the factories themselves.

Building in manufacturing tech and looking for an investor who understands the grind? Reach out to us at team@malpaniventures.com.