How tech is scaling India's manufacturing long-tail
In a world obsessed with consolidation and scale, India's manufacturing landscape tells a different story: one of specialisation, fragmentation, and resilience. What I want to show you today is how tech startups are solving critical challenges of market access, standardisation, visibility, and working capital, all without demanding fundamental changes to how these businesses operate.
When we think about manufacturing powerhouses, we imagine the sprawling factories of China or Germany - vertically integrated operations where raw materials enter one end and finished products emerge from the other.
However, India's ecosystem grew more distributedly based on local expertise and available resources. For instance, in textile production, you'll rarely find a single operation handling everything. Instead, separate businesses manage spinning, weaving, dyeing, printing, and garment assembly.
This fragmentation extends beyond textiles: Morbi has become synonymous with ceramics, Surat with diamonds, and Ludhiana with bicycle parts. These natural clusters of complementary small businesses create vibrant ecosystems that are both resilient and adaptable.
Rather than fighting this fragmentation, technology is now enabling these small manufacturers to overcome traditional barriers. Let's explore how innovative companies are leveraging this long-tail structure:
Groyyo: Standardising the fragmented
Groyyo recognised a gap in the market: while large factories are typically tech-enabled and operate efficiently, there are thousands of smaller factories (typical annual turnover of $400k-$2mn, 30-60 people) that struggle with inconsistent demand and operate significantly under capacity.
These small factories operated at 50% capacity because they faced a dual challenge:
They lacked the expertise & tech to operate efficiently to manufacture quickly & cheaply; and
They couldn’t give brands visibility into their supply chain to predict delays or to guarantee ethical labour practices
Rather than building full-stack factories, Groyyo took an Oyo-style approach to manufacturing. They went to existing small factories and offered a compelling value proposition: “We will get you business from international brands as long as you adopt our tech and standardised production processes at every step of the factory processes.” Today, Groyyo has created a distributed manufacturing network without the capital expenditure of traditional factory ownership.
This approach creates a win-win situation. Factories that adopt Groyyo's standards for compliance, cleanliness, and production SOPs gain access to steady demand from international brands. Simultaneously, brands get visibility into production progress and confidence in quality standards. Participating factories have seen utilisation nearly double, dramatically improving their economics without requiring massive capital investment.
Xneeti: Local manufacturers, global brands
Xneeti takes a different approach to the same fundamental challenge. They recognised that India's small manufacturers often produce excellent products but lack the capabilities to market themselves and build a global brand.
Their full-stack platform helps these SMEs grow their brands by handling everything from market access to optimisation. Their AI-generated catalogs and content improve click-through rates, while proprietary ML algorithms drive demand generation. The platform even includes automated pricing engines and P&L management modules to optimise business performance.
The results speak for themselves. A sustainable products manufacturer selling palm leaf and bamboo bowls/plates tripled their GMV in just 5 months while reducing their advertising costs by 17%. A yoga blanket maker grew revenue 3x in the same period while maintaining an efficient advertising spend of 10-11%.
Xhipment: Removing export barriers
Xhipment tackles another critical challenge for India's small manufacturers – the complex, opaque world of international shipping. For many small producers, the logistics of exporting goods can be as challenging as manufacturing them in the first place.
Xhipment's tech-enabled platform transforms this experience by providing seamless shipping across all transport modes with transparent B2B door-to-door pricing. Their integrated platform streamlines booking, document exchange, invoicing, and communication while providing end-to-end tracking from pickup to delivery.
By making international shipping accessible, predictable, and transparent, Xhipment enables small manufacturers to reach global customers without needing the scale or resources of larger competitors.
These companies didn't need to fundamentally alter their manufacturing operations – they simply needed technology to bridge the gap between their production capabilities and global market requirements.
Why now is the perfect time to leverage India’s long-tail
The timing couldn't be better for this tech enablement of India's manufacturing long tail. GST has created a unified national market, reducing logistics complexity. A new generation of digital-native leaders is taking over family manufacturing businesses, bringing openness to tech adoption. Government initiatives like PLI are creating supportive environments for manufacturing growth. Perhaps most significantly, international buyers are actively pursuing "China+1" strategies, looking to diversify their supply chains.
India aims to export $1TN of goods by 2030, increasing manufacturing's GDP contribution from 17% to 25%. Achieving this won't come through forcing consolidation or building massive new factories – it will come through empowering the thousands of specialised small manufacturers that already exist.
The future of Indian manufacturing isn't about eliminating its fragmented character - it's about leveraging technology to turn this unique structure into a competitive advantage on the global stage.