ITC bets on AI-first backbone to power factories, farms and consumer businesses

AI is also becoming central to ITC’s FMCG portfolio strategy.ITC is embedding artificial intelligence across its manufacturing, consumer goods and agricultural value chains as the conglomerate prepares for its next phase of growth, Chairman and Managing Director Sanjiv Puri said in his address at the company’s 115th Annual General Meeting.Puri’s address offered a view of AI not as an isolated digital initiative, but as an operating layer that could improve how ITC understands consumers, runs factories, manages supply chains and works with farmers.Calling for Indian enterprises to become future-ready and globally competitive, Puri identified capabilities for “AI-led transformation” alongside investments in research, innovation, trusted domestic brands and national manufacturing assets.The broader argument was that competitiveness in an increasingly volatile world would depend not merely on efficiency, but on the ability of enterprises to build resilience, develop new capabilities and convert disruption into fresh growth opportunities.

ITC described this approach as “Responsible Competitiveness”, combining economic scale with locally anchored value chains, sustainability and inclusion.AI enters the factory floorThe clearest articulation of ITC’s enterprise AI strategy came in manufacturing.Puri said the company was creating an “AI-first digital backbone” across its manufacturing facilities to improve efficiency, cost optimisation and responsiveness.ITC currently operates a manufacturing ecosystem of more than 300 factories, including 45 owned plants, and works with over 9,500 micro, small and medium enterprises.

Nearly 90 per cent of the company’s value addition takes place in India.The scale of this network makes the manufacturing deployment significant.

Instead of confining AI to pilots or central analytics teams, ITC’s stated direction suggests that digital intelligence will increasingly be integrated into plant operations and decision-making.However, the chairman’s address did not provide details about the underlying technology architecture, specific AI models, implementation partners or the proportion of capital expenditure allocated to AI.ITC has proposed a medium-term group capital expenditure of ₹20,000 crore, with six new projects in the pipeline following the commissioning of eight facilities.

The investments will span businesses where the company sees a multiplier effect, including consumer goods, paperboards, packaging and value-added agricultural processing.For enterprise technology leaders, the strategic signal is important: ITC appears to view AI infrastructure as part of the manufacturing asset itself, rather than as a separate technology overlay introduced after plants are commissioned.Turning consumer data into product decisionsAI is also becoming central to ITC’s FMCG portfolio strategy.Puri said the company had developed an AI-led consumer insight ecosystem that enables targeted micro-segmentation.

The system is being used to identify opportunities across life stages, lifestyles, consumption occasions, sales channels, shelf-life requirements and health needs.Such capabilities are particularly relevant as Indian consumption becomes more fragmented.

ITC sees premiumisation, quick commerce, expanding digital access and the rise of Gen Z and Gen Alpha as forces reshaping product categories and customer expectations.The company’s portfolio now comprises more than 30 FMCG brands, representing annual consumer spending of nearly ₹37,000 crore.

These brands reach approximately 280 million households and are exported to more than 70 countries.ITC estimates that its addressable FMCG market could reach around ₹8 lakh crore by 2035.

At this scale, AI-led segmentation can potentially influence decisions ranging from product formulation and packaging to pricing, channel selection and inventory planning.

It may also help the company operate a more differentiated portfolio without relying exclusively on traditional mass-market segmentation.Puri highlighted ITC’s growing presence in nutrition, wellness, naturals, fresh food and convenience-led categories.

Acquired businesses in emerging categories are already generating an annualised revenue run rate of around ₹1,350 crore, according to the address.The strategy reflects an attempt to combine the speed and category focus of start-ups with ITC’s distribution, research and institutional capabilities.From digital agriculture to ‘Farming as a Service’Agriculture represents the third major pillar of ITC’s technology-led transformation.At the centre of this effort is ITCMAARS, the company’s phygital agricultural ecosystem that connects farmer producer organisations with digital advisory services, quality inputs, market access and climate-smart farming practices.The platform has enrolled more than 2.6 million farmers across 11 states.

ITC aims to expand its reach to 10 million farmers by 2030.Initial estimates cited by the company indicate that participating farmers have seen crop yield improvements of 15 -20 per cent and increases of 25-30 per cent in net returns.ITCMAARS is progressively introducing precision agriculture capabilities including IoT-enabled weather tracking, remote sensing and drone-based services.The company also plans to use the platform to build a “Farming as a Service” ecosystem.

Under what it calls the “Grow the Buy” model, agricultural production would be customised to meet the specifications of particular buyers.This could involve combining crop planning, traceability, certification, agronomy and market linkages into a unified agricultural supply chain.The model illustrates how enterprise AI and digital infrastructure can move beyond providing farmers with information.

Over time, such platforms could shape what is cultivated, how quality is measured and how produce is matched with domestic and international demand.ITC’s agriculture business has nearly doubled its segment revenue in slightly over five years to approximately ₹20,300 crore in FY26.

The company currently manages 21 agricultural value chains across 23 states and sources close to six million tonnes of agricultural produce.AI as a resilience capabilityPuri framed these investments against what he described as an era of systemic volatility, marked by geopolitical conflict, fragmented supply chains, climate risks and rapid technological change.Within this context, AI is being positioned as one component of a larger resilience architecture.

In manufacturing, it is expected to improve operational responsiveness.

In consumer goods, it is intended to sharpen demand sensing and portfolio decisions.

In agriculture, digital tools are being used to improve productivity, traceability and climate resilience.This is materially different from presenting AI merely as an employee productivity tool or a generative AI interface.ITC’s approach, at least as outlined in the AGM address, is rooted in domain-specific deployments connected to physical operations and established business processes.

The value of the technology will therefore depend on its ability to influence frontline decisions across factories, distribution networks and farms.The company’s wholly owned technology subsidiary, ITC Infotech, could also play a role in this transformation.

Puri said the subsidiary had accelerated its progress and was among India’s fastest-growing mid-tier IT services companies, although the address did not elaborate on its role in ITC’s internal AI architecture.The execution questionITC reported net segment revenue of more than ₹83,300 crore, with non-cigarette businesses contributing nearly two-thirds of the total.

Its FMCG revenue increased from approximately ₹14,720 crore in FY21 to over ₹24,200 crore in FY26.The company’s scale gives it access to large volumes of operational, agricultural and consumer data.

But scale alone does not guarantee enterprise AI outcomes.The next stage will depend on whether ITC can integrate data across businesses, establish reliable governance systems and embed AI recommendations into everyday operating workflows.Puri’s address did not lay out a separate AI investment target, central AI organisation or deployment roadmap.

What it did establish was a strategic direction: AI will increasingly sit inside ITC’s core businesses rather than alongside them.For one of India’s largest diversified enterprises, that may be the more consequential shift.