Why India's Machine Makers Could Be The Quiet Heroes Of Its Industrial Comeback

Machines, that beautiful, beating heart of manufacturing. They hum and throb, and at the end of their shift produce something of real, physical value: either finished goods or the precise parts that, when joined with their accomplices, eventually form the products that power our industries, institutions, and even our humble homes and offices.

Despite this centrality, India did not nurture its machine tool sector as handsomely as it deserved. State-led giants like Hindustan Machine Tools (HMT) were set up in the 1950s, but for decades after independence the industry stagnated. Imports filled the gaps, especially in high-precision tools, and India never developed the deep industrial backbone seen in Germany, Japan, or even China.

In those countries, machine tools were treated almost as national treasures. Post-war Japan poured resources into precision machining to power its automobile and electronics rise. Germany’s famed Mittelstand built world-class niche toolmakers that still anchor its industrial might. China, starting in the 1980s, scaled domestic machine tool capacity to reduce dependence on imports. India, by contrast, underinvested in this critical layer, leaving a hollow spot in its industrial ladder.

Instead, India leapt from an agrarian economy at independence to a services-led economy after "Y2K." Manufacturing, which typically peaks at 25-30 per cent of gross domestic product (GDP) in newly industrialising nations, never climbed much above 16-17 per cent in India. The crucial machine-building phase, an inevitable chapter in nearly every growth story, was largely skipped.

But in the last decade, that story has begun to shift. With Make in India, the Capital Goods policy, production-linked incentive (PLI) schemes, and the broader calls for Aatmanirbhar Bharat and Viksit Bharat 2047, the missing middle is being built, one machine at a time. The torchbearers range from established names like Jyoti CNC and Ace Micromatic to newer innovators like Ethereal Machines. Together, they are quietly expanding India's capacity to build the very machines that make everything else.

This effort is scattered but visible across India’s industrial map. Bengaluru remains the long-time hub, with legacy players like BFW and Ace Micromatic. Rajkot in Gujarat has emerged as a machine-building cluster, home to Jyoti CNC, while Pune, Coimbatore, and even Haridwar are adding capacity in specialised niches.

The Indian Machine Tool Manufacturers’ Association (IMTMA), which organises IMTEX, Asia’s second-largest machine tool expo, has been trying to knit these nodes together into a cohesive ecosystem.

It may not be a loud revolution, but it may prove a decisive one, especially as India strives to strike a better balance between its software dominance and its hardware naivety as it marches ambitiously towards the middle of this century.

Re-engineering in Haridwar

About five months ago, Vishakh Ranotra moved out of Delhi, where he was born and raised, along with his wife into the holy city of Haridwar over 200 kilometres (km) away. "We have a manufacturing facility here in Haridwar. And I always wanted to be near the factory, be there every day, be where the action is going on. I don't want to be isolated from all of it," he tells Swarajya.

Ranotra is referring to his family business of manufacturing springs and wire forms, established back in 1979 by his grandfather. He leads the research and development (R&D) in machinery at Ranoson Products Private Limited.

When he was living in Delhi, he was managing operations remotely, visiting his Haridwar factory two or three times every month. But the long-distance work lacked the intensity he was after. "I wanted to be right in the middle of it, what's going on, where I can step in, how we can scale this up, what are the opportunities that we can find along the way. That was my motivation to come to Haridwar," he says.

It helped that Delhi, like other major cities in India, was "getting very unliveable." A Tier-2 city offered the relative luxuries of fewer people and a slower pace of life.

About 20 computer numerical control (CNC) machines today populate the Ranoson factory. But there was a time, until not too long ago, when all the machines were imported, largely from China. Those were all two-axis machines. "In CNC machines, the axis means the number of motors, the number of degrees of freedom that your machine has. And the more the axis, the better the performance and flexibility you have to make a certain product on it," Ranotra explains.

But now, most of the machines on the Ranoson factory floor are designed and developed by Ranotra's Ranok Systems. And they are the upgraded five-axis machines. This innovation was possible thanks to good, old-fashioned reverse engineering in conjunction with novel thinking.

You see, joining his family business was not Ranotra's first choice. In fact, he did not even study engineering. He received his bachelor's degree in industrial design, after which he joined an online furniture startup as their product designer. He donned many hats there.

"They were manufacturing flat-pack furniture, something along the lines of Ikea. I was designing furniture for them. It was a small, bootstrapped startup. I was also their product photographer, helping out here and there because when it's a small startup, you get to learn from other aspects of the business also," Ranotra says.

After working there for about a year, he decided to join the family business in 2017. He then broke away and spent about half a year working for a custom bike builder in Jaipur, Rajasthan. This stint proved to be life-changing.

"I worked with Rajputana Custom Motorcycles. I would say a lot of things in terms of what I'm doing right now came from my experience in Jaipur with making parts for motorcycles and building motorcycles. And the kind of work there was, you'd be working 12 hours a day, making parts with your hands. You were actually like a mechanic there, and I used to love that," Ranotra says.

This hands-on, cross-industry experience is a prime example of how artisanal mechanical skills are seeding industrial innovation. It is an unusual but powerful route to technical expertise in India.

For Ranotra, it produced the spark for the innovation that was to come.

"That's when something clicked in my mind, that if these things are possible, that I can make this physical product, that I can work on the lathe machine and make all these things, why not I take this thing back and try to re-engineer, reverse-engineer all these machines that we have in our factory and try to create Indian alternatives to these machines, which, still to this day, are not present. I'm operating in almost a complete vacuum in this regard," the entrepreneur explains.

He believed he could use his capability to design and build things to "do something good for our company, and our country."

But building these machines entirely in-house proved more complex than anticipated. CNC machines require expertise across multiple engineering disciplines, including software, electronics, electrical, and mechanical. Even with his innovations, Ranotra faces challenges sourcing critical components locally.

"The precision motors, which are called the servo motors, and the computer CNC controllers that go on to these machines are still imported from outside. Why? Because there is no key player in this industry right now," he explains. Even established Indian manufacturers like Jyoti CNC and BFW import these "brains and muscles" of their machines.

The gaps go beyond components. India also faces a skills deficit. The country produces world-class coders, but far fewer machinists, toolmakers, and mechatronics engineers, the very people needed to design, run, and maintain advanced machine tools. Some industrial training institutes (ITIs) and engineering colleges are slowly pivoting their curriculums towards CNC and robotics, but the pipeline is still thin. This shortage constrains how fast the industry can scale.

Yet the bootstrap approach has yielded results. Ranotra has "liquidated all assets" and "put in literally all my life savings into this" to build machines that compete on speed and cost. His four-axis spring coiling machines operate at nearly double the speed of the two-axis imports they replaced, while costing 10-20 per cent less than comparable Chinese alternatives, and this without the benefits of scale manufacturing.

Breaking New Ground in Bengaluru

About 2,300 km south in the technology capital of Bengaluru, a couple of young engineers are leading the charge with machine innovation. Ethereal Machines specialise in five-axis CNC technology and provide advanced manufacturing solutions across the aerospace, healthcare, and electronics components.

"We used to build a three-axis. From the three-axis we went into the five-axis. We went about it in a stepwise manner," says Kaushik Mudda, the co-founder of Ethereal Machines alongside Navin Jain.

Notably, it was the theoretical part that Mudda and Jain had to crack in order to design and develop their breakthrough machines.

"It's the mathematics and physics behind it which is very hard. We just had to do very complex matrix transformations. Thankfully, now we have some AI (artificial intelligence) tools which can help us. But back in the day there was nothing. It actually took us a good 18 to 24 months just to get the maths right. It was a very hard balance for us," Mudda explains.

Unlike Ranotra, reverse engineering was not an option for Ethereal. "I couldn't reverse-engineer because I had no money. I couldn't buy any machine. We had very paltry funding. So, we had to do everything from scratch," the co-founder says.

This bootstrap constraint forced innovation but also shaped Ethereal's business model. When they initially tried selling their five-axis machines, they faced scepticism. "We started facing a lot of resistance once our five-axis was ready, that it's impossible that an Indian company could make this, let alone two youngsters. The company almost came to the brink of death," Mudda recalls.

The solution came through pivoting to a services model. "That's when we started looking at the services model, where we make the components and we give it. Now I make it with my machine and make it with my hands, the customers usually are indifferent to it." This "manufacturing as a service" approach allowed them to prove their capabilities without battling credibility issues.

Today Ethereal's 300,000 square-foot factory in Yeshwantpur has a fleet of 70 machines that operate round the clock to produce precision-machined parts faster and/or cheaper. The Nimbus and Aura machines are the highlight.

Launched on the eve of India's independence day this year, Aura is Ethereal's in-house three-axis CNC system. It offers a positional accuracy of ±4 µm (micrometres or microns), which is about one-twentieth of a human hair, while moving at 48 metres per minute, with a work envelope of 600 × 500 × 350 mm and a spindle speed of 12,000 rpm. The Aura is designed to be the workhorse that carries out precise machining work day in and day out without breaking a sweat.

Besides Aura, there is Nimbus, a five-axis platform in India that can mill aluminium, steel, titanium, Inconel, copper parts, and other exotic materials to tight tolerances. According to Ethereal, Nimbus trims days from typical prototype cycles, stays accountable through logged and traceable critical passes, and is ahead of the curve by already being production-qualified on pure-copper electric vehicle (EV) rotors and the next wave of nickel-based super-alloys.

Ethereal is plugged into India's manufacturing vision. Collaborating with Startup India, a Department for Promotion of Industry and Internal Trade (DPIIT) initiative, the company is working to give India's innovators access to precision manufacturing and next-generation automation.

Through their innovation, Ethereal's machines deliver output at just one-third the cost of similar machines elsewhere in the world. For this reason, about 70 per cent of the company's revenues come from exports, with customers spread across Europe, America, and the Middle East, among other places.

Interestingly, Ethereal's first sales came from Italy and Japan, not India. "People outside are very receptive to give you a chance," Mudda notes, suggesting that global quality perceptions may be more about proving capability than inherent bias. Their international success, with performance matching German and Japanese standards, has helped establish credibility that was initially harder to achieve domestically.

Ethereal’s traction abroad mirrors a broader shift in investor confidence. Public markets and venture capital, historically wary of capital-intensive hardware startups, are increasingly rewarding companies in deep tech and industrial manufacturing, signalling that hardware in India is finally being taken seriously.

Their services-model pivot, "manufacturing as a service," also illustrates how Indian startups overcome structural credibility barriers. It is an insight into how bootstrapped hardware entrepreneurship differs from software ventures.

The cycles are slower than the well-entrenched software as a service (SaaS), but the opportunity, especially with India’s potential to become a "China+1" supplier, is too large to ignore.

The Manufacturing Imperative for India

"For India, being a manufacturing hub is not just a choice. It's an absolute necessity if we really want to be a dominant player in the geopolitical landscape," Ranotra says at a time when a major partner in the United States of America (US) is playing fast and loose with India. For this Haridwar-based entrepreneur, continuing to import hardware would amount to "basically just renting out your future out to the countries outside."

"I want to dedicate my life to ensuring India becomes a superpower. And I think you can't become a superpower if you don't have manufacturing. India, unfortunately, has skipped that," Bengaluru-born-and-raised Mudda says.

The manufacturing, or more broadly, industrialisation, imperative is dawning on not just India but the entire developed and developing world. "The world is now finally coming to realise that there's a world outside of software also. Even in the US, you can see there's a huge shift in reindustrialisation. Because they've come to realise that they have outsourced all of their manufacturing to China and other countries. It's not going to be just software," Ranotra says, adding, "And also, you just can't employ almost 1.5 billion people in services and software."

"Most developed countries went from farming to industrialisation, of course, the US has now fully dropped out and outsourced all of its manufacturing chops to China, that's a different case, and then they moved to software and services. India has leapfrogged that out. They went straight from farming business into a two-trillion-dollar internet economy, not focusing on manufacturing or industrialisation," Mudda reminds.

But India's software-first trajectory created an unintended cultural challenge. As Mudda observes, "Unfortunately, the way the media has been in India for the last 10 years, they've only glamorised the internet. Internet startups. It's also easier, right, where you just take a laptop and you're trying to do something. And everybody is really in awe of people raising funding, two million dollars, here, there." This cultural bias towards software has made it harder to attract talent to manufacturing, where the rewards are substantial but require more patience.

Thankfully, in India, the shift from software to hardware is palpable and quantifiable. In fiscal year (FY) 2023-24, India's manufacturing sector saw 11.89 per cent gross value added (GVA) growth, up from about 7.3 per cent in the previous fiscal. This is not just incremental growth. The signal is one of acceleration in the sector.

Beyond growth, the sector is tackling high-end technical challenges. Ethereal is already machining exotic materials like Inconel, nickel-based superalloys, and EV rotors, showing that Indian startups are not only replicating imported machines but also working at world-class specifications.

Reports such as the India Manufacturing Tracker 2024-25 show increasing foreign direct investment (FDI) in manufacturing, especially in electronics, automotive, consumer goods, and other areas. This is a sign of confidence among investors that hardware or manufacturing will be profitable in India.

Mudda concurs. "In the last one to two years, I think what has changed is there is a good amount of interest, at least from investors, that this is something that should be looked at. The public markets have been treating some of these companies really well. So if you look at Azad Engineering, Unimech Aerospace, BDL (Bharat Dynamics Limited), HAL (Hindustan Aeronautics Limited), Astra Microwave, all of these companies, the markets treat them well," he says.

What the Ethereal co-founder laments is Indian entrepreneurs being slow to catch on. "The only thing I would say is that entrepreneurs should have seen this earlier and not waited for the government push. Now, like Piyush Goyal ji mentioned, where are the hard tech companies? The government pushing in that way has gotten some of these people to think in that direction," he says.

Hardware or manufacturing-oriented startups have been increasing in India in recent years, though it is not easy to isolate pure hardware or machine tool or industrial-equipment startups from the broader deep tech, Internet of Things (IoT), hardware, and electronics buckets.

What can be said is that India has well over 3,600 "deep tech" startups. "Deep tech" is a loose but relevant category that often includes hardware, IoT, robotics, sensors, and so on, suggesting increased interest in tech that is not purely software.

The PLI schemes and other government incentives are likely contributing to more hardware startups starting up. And the government is unrelenting. Finance Minister Nirmala Sitharaman has said India aims to double the share of manufacturing in gross domestic product (GDP) from about 12 per cent now to more like 23 per cent over the next two decades with the support of sunrise sectors.

"The way they are pushing it is phenomenal. I've never seen this kind of a push in the history of this country," Mudda says.

Besides driving industrial growth and India's rise as a global power, one of manufacturing's big gains would be employment. In FY24, manufacturing jobs grew by about 5.4 per cent, indicating expansion rather than just productivity gains.

"Forty-five per cent of our population is below the age of 29. And if sustainable jobs have to be created across that huge segment of the population, it's going to come only from manufacturing," Mudda says. Explaining the difference between software and hardware startups in terms of their job creation potential, he says, "Software companies usually have a mindset of keeping things lean, at least in the startup world. Everybody says, 'Look at WhatsApp, they had only 20 employees.' Whereas I have always been like, first we need to create a very wide-based employment. That is only possible if you do manufacturing well."

The added benefit with manufacturing is that for India's youth, it is, according to Mudda, "something that's worth spending your life's efforts on, especially in the prime of your life." It has given Ethereal the motivation to brace through all the varying industry trends and reap the rewards of a high sense of purpose and great patience. "We've seen all of it come and go, internet startups, delivery startups, then crypto. And now finally, people are looking at manufacturing. It's a good thing."

Yet challenges remain embedded in the ecosystem. Both entrepreneurs highlight the critical bottleneck of CNC controllers, the software and electronics that serve as the "brains" of these sophisticated machines. Even as India builds the mechanical components, this dependency on imported intelligence represents both a vulnerability and an enormous opportunity for the next generation of deep tech innovators.

"Motors, etc, are still available. There are good guys in India who manufacture it. But the CNC controllers, only a few people worldwide have cracked it," says Mudda, whose Ethereal Machines is taking a great shot at it. "Hopefully in the next 12 months, we at Ethereal Machines would have built out India's first CNC controller."

Looking forward, convergence with AI, robotics, and additive manufacturing could amplify this opportunity. Startups working on predictive maintenance, intelligent toolpath optimisation, and 3D metal printing could allow India to leapfrog from "build-to-print" to "design-and-build" capabilities, reshaping its industrial base for decades to come.