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Perspective:
Perspective
29 Oct 2025
5 minute read

Internal audit in Indian manufacturing: Risk, resilience and results

India is emerging as a global manufacturing powerhouse, with key sectors such as automotive, pharmaceuticals, textiles, heavy engineering and electronics attracting substantial capital investments and embracing advanced technologies. At the same time, the rise of Industry 4.0, automation and digital transformation is redefining operational landscapes. In this evolving environment, Internal Audit (IA) is transitioning from a traditional support role to a strategic driver of value and resilience.

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Internal audit in the manufacturing sector has progressed far beyond the role of a traditional regulator. Today, it is a strategic partner to management and stakeholders, offering oversight and forward-looking insights across the entire value chain. Internal audit’s relevance in manufacturing lies in its ability to:
Provide visibility across plant-level operations and the broader enterprise

Safeguard assets against theft, misuse or deterioration

Enable risk-based decision-making by identifying vulnerabilities

Support transformation through insights into process efficiency, cost structures and productivity drivers

Build stakeholder confidence, as investors, regulators and boards rely on the IA’s independent assurance

Emerging focus areas where internal audit can play a crucial role are:

Assessing adoption of automation, Internet of Things (IoT) enables machinery, robotics and Artificial Intelligence (AI) to ensure investments deliver productivity, connected data remainsreliable and cybersecurity gaps do not erode value.

Safeguarding smart factories from threats such as ransomware and industrial espionage by testing resilience, validating access controls and ensuring compliance with data protection norms

Verifying carbon neutrality targets, waste management and social responsibility programmes. IA ensures accuracy of ESG disclosures and alignment with global benchmarks to build stakeholder trust.

Strengthening preparedness against raw material shortages, geopolitical risks and logistics disruptions by reviewing supplier dependency, vendor performance and contingency strategies.

Ensuring R&D investments are strategically aligned; intellectual property is protected and innovation pipelines are effectively governed to drive sustainable growth.

Evaluating whether skill development, succession planning and workplace culture enable a digitally skilled safe and future-ready workforce.

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Anthony Crasto

Anthony Crasto

President, Assurance, Deloitte South Asia
Peeyush Vaish

Peeyush Vaish

Partner and Global Controls Assurance Leader, Deloitte India
Amit Gupta

Amit Gupta

Partner, Assurance, Deloitte India

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