Young workforce is India’s advantage in manufacturing: Cedrik Neike | Tech News

At the start of the year, you said 2026 looked like a great year in terms of spending and investments. We are now almost in the second half of the year. Would you revise that statement?

If you look at the calendar year — our fiscal year starts at the end of September or beginning of October — you have seen our last Q2 and Q3 numbers. We have positively impressed, which is a reflection of how well we are doing, but also of what the economy is doing.

I have been very happy with Sunil (Sunil Mathur, India MD & CEO) and his performance in India. If you look not only at the last two quarters but at the last five years, India has overachieved overall.

No, I would not revise that statement. There are pockets of growth, particularly in technology. Anything to do with AI, semiconductors, electronics and everything being pulled by these sectors, including construction, is doing extremely well. Energy is another area. But you also see the rest of the economy developing well.

AI has added to the global uncertainty. What are you hearing from your customers globally about these disruptions?

The reality is that customers have to become much more flexible than they have been in the past to adapt their supply chains — where they source from and where they produce. In the past, companies looked at global supply chains and global manufacturing concepts. These are now becoming much more local. This is true for the US and China, but it is also true for India, where “Make in India” is one of the elements going forward.

The world is preparing to become much more adaptive and much more local than it has been in the past. There will still be a lot of global exchange, and you have seen some trade agreements being prepared and signed.

We also recognise the reality of what is happening. We see it with our customers because we are fundamentally in manufacturing. Every third machine in the world has a Siemens controller, so we are in factories everywhere. Every third software in the industrial space is from Siemens. We are seeing a shift towards certain areas — electronics, semiconductors, advanced machine tools, energy, new energy and defence. These are the growth verticals we see globally.

We are also seeing India, the US and other markets increasingly localising production. One of the big discussions is: how do I produce more locally and with more local content? But also, how do I distribute some of my manufacturing closer to markets than I did in the past?

Where does India rank for Siemens globally?

In terms of revenue or market share? It depends on the market. It is very different for software compared to automation. But India is one of our top four markets. Let’s put it that way. It is not number one or number two, but it is the fastest-growing of all.

An emerging area in manufacturing is physical AI. How do you see this evolving?

The reality is that as more factories are being built, there is a massive skills shortage in factories around the world. We are talking about 7.9 million or 8 million manufacturing jobs that will not be filled by 2030.

India has a big advantage here. If you look at the large developed economies, all of them are getting older. China is getting older. Korea is getting older. I think 2024 was the tipping point when more people were exiting the workforce than entering it. India has a young workforce as an advantage, but a lot of companies are looking at humanoids and advanced robotics to close that skills gap.

We are by far the world leader in automation, we see that roughly 30 to 40 per cent of everything that can be automated worldwide is automated today, depending on the country and the level of adoption. Humanoids and advanced robotics will push this up to 70 to 80 per cent.

What does this mean for jobs and job security?

This is very similar to when robots first came into the workforce in the 1970s and 1980s. The big fear was that robots would take away jobs. But the reality is that countries with more manufacturing jobs also tend to have more robots. Korea, China, Germany and Japan have an extremely high density of robots, but they also have a high density of manufacturing jobs.

In my view physical AI will push the adoption of automation and automate things that could not be automated in the past. It will also increase flexibility. The more you adopt it and leapfrog with it, the more competitive you will be. And that brings me to India. I am a huge fan of India.

For a long time, India was a promise. Now that promise is being realised. When India does something cleverly, it leapfrogs. It leapfrogged with unique identity, digital finance and communication. Some of the most performant and low-cost communication networks in the world are in India.

So, as India looks to increase manufacturing’s share of value addition from around 17 per cent to 25 per cent, I think there is an opportunity to embrace physical AI and robotics.

Ignoring it is not a good idea. Embracing it while continuing to create jobs is very feasible. I am a big believer in the “human in the loop”, and I think that is a big opportunity for India.

Siemens has a development centre in Bengaluru. How significant is the centre and what will be its focus, particularly when it comes to AI?

One thing that is important for India is that we are past the idea of offshoring — the idea of taking work and offshoring it to India simply because it costs less.

What we are doing now is taking teams that were previously support teams and giving them full development responsibility in India. Some projects will be done in India, some in the US and some in Germany.

One of our biggest development centres, for example, is in Pune. In software, it is probably our most complete centre, where we have all our products together. It is also one of the most effective development centres we have.

What is changing, and what I am looking at, is how AI tools will change the efficiency and speed of software programming.

The second part is how we ensure that our investments in accelerating development are further accelerated by using the most advanced tools and programming.

What about hiring, particularly tech hiring? Has AI had an impact on that?

We will not need as many software engineers, for sure. But we need a new generation of software engineers, and most people coming out of universities now also have AI skills.

I think with every technological shift, we stop hiring the same type of people we hired in the past and start hiring new types of people who are ready for the new environment. We shifted from on-premise to SaaS, and now we are going to shift from non-AI to AI-ready people.

How is AI impacting Siemens internally? And when you talk to your customers, how significant is AI becoming in manufacturing?

AI is relevant for Siemens on three levels. The first is making our own processes more effective. This goes from purchasing to HR. Every function is being optimised through AI, including the software we consume.

The second is how AI tools can make our developers more effective. I am going to Bengaluru, where a lot of our developers are based. We are looking at tools such as Codex and Claude Code — which tools are available, how we use them, and how we deploy engineers or software developers alongside agents that can help us code.

The third is that we are embedding more and more AI capabilities into our products. Around 96 products have AI-native capabilities so far.

The good thing about these three elements is that customers come to us and ask: What products do you have for us? What have you learnt from becoming more efficient yourselves? And where are you taking costs out using AI?

We can answer those questions because we use this technology ourselves and test it ourselves before taking it to our customers.