Gujarat Partners with IBM and IAIRO to Build India's First Industrial AI 'Living Lab' for Manufacturing Innovation

Gujarat, IBM and IAIRO Announce Industrial AI Living Lab

The Gujarat government, the Indian AI Research Organisation (IAIRO), and IBM have announced plans to establish an Industrial Artificial Intelligence Centre of Excellence (CoE) in Gujarat — a "Living Lab" designed to accelerate AI adoption across manufacturing, energy, utilities, and supply chains. Announced on June 30 by the Department of Science and Technology, Government of Gujarat, the initiative signals India's push to deploy sovereign AI technologies in the country's industrial heartland. The CoE will function unlike a conventional research centre — companies, researchers and government agencies will jointly develop and pilot AI applications in real-world industrial settings before deploying them at scale.

The initiative aligns with Gujarat's ambition to position itself as a leading destination for Industrial AI by fostering innovation, research, and industry collaboration. Gujarat already hosts some of India's largest petrochemical, pharmaceutical and automobile manufacturing clusters, making it a natural testing ground for industrial AI solutions. The move also reflects India's broader push toward sovereign AI capabilities, where the country aims to build indigenous AI infrastructure rather than relying entirely on foreign models and platforms.

What the Industrial AI Living Lab Will Do

Envisioned as a collaborative ecosystem, the Living Lab will focus on several key areas. First, it will support the development, testing and adoption of industrial AI applications using sovereign AI technologies. Second, it will promote applied research and innovation through pilot projects, technology demonstrations, workshops, and conferences connecting industry, academia, startups and government. Third, the Centre will develop AI talent through academic collaborations, research initiatives, hackathons, certification programmes, and training in emerging AI technologies. Additionally, it aims to contribute to the development of AI frameworks, reference architectures, standards, and best practices to support responsible and scalable AI adoption across industries.

IBM and IAIRO will serve as technical and strategic advisors to the Department of Science and Technology in the Gujarat government. Their role includes providing expertise in Industrial AI, sovereign AI technologies, enterprise asset management platforms, and best practices to accelerate AI adoption. Sriram Raghavan, General Manager of IBM Software, India and Software Innovation Lab, said AI is becoming a strategic priority for manufacturers seeking to improve productivity and operational resilience. "Scaling Industrial AI requires advanced AI models, enterprise-grade platforms, governance and strong ecosystem partnerships," he noted.

India's Sovereign AI Push and the Gujarat Connection

The announcement comes as India intensifies its push for AI sovereignty — building domestic AI models, data centres and skilling programmes rather than depending solely on US and Chinese platforms. Gujarat has emerged as a key hub in this strategy. Reliance is building a massive AI data centre in Jamnagar that will power India's sovereign AI backbone. In a separate development, Meta partnered with Reliance to build a 168MW AI data centre in Jamnagar, Gujarat, further cementing the state's position as India's AI infrastructure corridor.

The Gujarat government has also signed MoUs with Google to expand access to advanced AI and cloud platforms for startups and government teams, and with Bhashini to adopt India's language AI stack for public service delivery. These initiatives, combined with the new Industrial AI CoE, position Gujarat as a national testbed for industrial AI innovation. Dr Amit Sheth, founding director of IAIRO, emphasised that the next generation of industrial systems will require AI that combines machine learning with domain knowledge, human expertise and trust. "Gujarat's industrial leadership provides a strong foundation for translating frontier AI research into real-world applications," he stated.

Impact on Manufacturing and Job Creation

India's manufacturing sector employs over 57 million people and contributes roughly 17% to the country's GDP. The integration of AI into manufacturing processes — predictive maintenance, quality inspection, supply chain optimisation, and energy management — could unlock significant productivity gains. The Industrial AI CoE is expected to accelerate this transformation by providing a sandbox environment where companies can test AI solutions before committing to large-scale deployment. For Gujarat's industrial workforce, the initiative promises new skilling and upskilling opportunities in AI and machine learning, potentially creating a template for industrial AI adoption that other Indian states could follow.

The CoE also aims to strengthen India's position in the global industrial AI race. Countries like Germany (Industry 4.0), China (Made in China 2025), and the US (Manufacturing USA) have long invested in smart manufacturing initiatives. India's Industrial AI Living Lab represents a targeted effort to carve out a competitive position in this space by combining sovereign AI technologies with the country's cost advantages and growing engineering talent pool.

Timeline and Next Steps

The announcement formalises the intent to establish the CoE, with the partners expected to finalise the operational framework, location, and funding model in the coming months. IBM and IAIRO will conduct workshops and stakeholder consultations with Gujarat-based manufacturers, energy companies and supply chain operators to identify priority use cases. The first pilot projects are expected to begin within six months, focusing on predictive maintenance and quality inspection use cases in Gujarat's automotive and pharmaceutical manufacturing sectors.

Frequently Asked Questions

What is the Industrial AI CoE?

The Industrial AI Centre of Excellence is a collaborative "Living Lab" established by the Gujarat government, IBM and IAIRO to develop, test and deploy AI solutions for manufacturing, energy, utilities and supply chains.

Where will the centre be located?

The specific location has not been announced yet. It will be established in Gujarat, with the operational framework expected to be finalised in the coming months.

Who can participate in the Living Lab?

Companies, researchers, academic institutions, startups, and government agencies can collaborate on pilot projects and technology demonstrations within the lab.

How does this relate to India's sovereign AI push?

The CoE will focus on industrial AI applications that leverage sovereign AI technologies — aligning with India's broader strategy to build indigenous AI capabilities rather than depending entirely on foreign platforms.

When will the first projects begin?

Pilot projects are expected to begin within six months, focusing on predictive maintenance and quality inspection in Gujarat's automotive and pharmaceutical manufacturing sectors.

Sources

Sources: The Hindu BusinessLine, Analytics India Magazine, CIO&Leader, Express Computer