In today’s Finshots we talk about the global race to build humanoid robots and what it could mean for India’s labour edge.

But before we begin, if you love keeping up with the buzz in business and finance, make sure to subscribe and join the Finshots club, loved by over 5 lakh readers.

Also, a quick side note. If you love finance and have a knack for storytelling, this is your chance to join Finshots. We simplify business and finance for 5,00,000+ readers every day, and now, we’re looking for someone who can break down market trends, economic policies and business stories into crisp, engaging reads. If this sounds like you, or you know someone who’d be perfect for the role, apply here or share it with them.

It seems that humanoids are making headlines everywhere these days.

Now, don’t let the name confuse you. Humanoids are essentially machines that look and move more or less like humans. Two legs, two arms, a torso and a friendly face. The idea is straightforward: since our world is designed for humans, robots built like us can do our jobs without needing to redesign existing factories or infrastructure.

But while they may look simple, building a humanoid is anything but. You need 3 things. #1: A brain - made of AI models, simulation software and vision systems (from companies like Meta, Nvidia, Alphabet). #2: A body — packed with sensors, lithium-ion batteries and actuators (sourced from companies like Siemens, Sony, Foxconn). And #3: An integrator to put it all together — or companies like Tesla, BYD, ABB, Unitech to name a few.

So why are we talking about humanoids now, you ask?

Because companies as well as countries want a slice of the humanoid robotics pie. And 2025 could be the year when humanoid robotics reach mass production.

Tesla’s Optimus can already walk unaided and fold laundry. And Musk wants to price it under $20,000. BMW’s using them on the assembly line. And Hyundai has reportedly ordered thousands for its factories.

But it’s China that’s taking the biggest swing. It sees these bots as a way to maintain its manufacturing edge. Since the country faces demographic decline as well as global trade tensions, the government is now pumping billions into research and subsidies and calling it the next industrial revolution.

That’s a leap and it changes things.

If things continue at this pace, we’re suddenly looking at a robot that’s general-purpose. One that can do anything from working in factories to handling groceries. That’s why Goldman Sachs pegs the humanoid robot market at $38 billion by 2035. And Morgan Stanley and Citi Group think it could be hundreds of billions if adoption follows an EV-like trajectory.

But wait a minute. We didn’t write all this just to sing humanoid praises. So it’s worth asking if humanoids are actually viable.

Well, they seem to be getting there and there are a few reasons why.

First up we have the demand pull. Despite being 8 billion strong, the world is short of workers. Japan and South Korea, for example, are ageing rapidly. The US and Europe see fewer people willing to do low wage, high risk jobs. Even China is facing rising labour costs. And by 2050, the population above 60 is set to double to 2 billion. All that makes humanoid assistance a prime market in the coming years.

Second, costs are crashing. A humanoid robot used to cost $100,000 or more. Today, some models go for as low as $35,000 and projections say they could go as low as $13,000. That’s a massive shift and it’s drawing in new players.

Third, investment paybacks seem favourable too. Take something as simple as food preparation. Morgan Stanley says that the payback period for humanoids is now competitive with human labour for this task. And this is especially true in industries with high churn or repetitive tasks.

And finally, there’s government support. For instance, China alone has rolled out $20 billion in subsidies. Its humanoid procurement budget shot up from 4.7 million yuan in 2023 to 214 million yuan in 2024. That’s a 45x jump!

Which makes us ask — If the opportunity is so obvious, why isn’t India all-in?

Because manufacturing humanoids at scale isn’t just about AI. You need strong moats in hardware, logistics, capital and deep supply chains. Think about iPhones. They’re built using parts from over 40 countries. Humanoids will need something similar. And China already dominates that ecosystem, from rare earth minerals to actuators. Even replacing such import dependency would take years for companies.

So if someone’s building millions of robots in the coming years, odds are it’s China.

And that could perhaps make humanoids a commodity game, where building the physical product is as important as the AI. Shifting production elsewhere, like India, will require serious capital, strong policy support and years of planning, plus, societal readiness to accept robots in everyday roles.

So where does that leave us?

India has a large labour force, yes. But our labour force participation is low. And that amplifies the unemployment mess. Plus, our economy still leans heavily on low-cost manpower, from textile mills to migrant jobs abroad. In fact, Indian overseas remittances alone hit around $130 billion last year.

Now add humanoids to the mix and you could see more troubles bubbling. Imagine a Gulf construction firm replacing 1,000 Indian workers with 50 humanoid robots that work 24/7 in desert heat. Multiply that across industries and India’s low-cost labour advantage starts to crumble.

Still, where there’s risk, there’s also opportunity. And India seems to be waking up to it.

Take Reliance. It’s partnered with Addverb, a robotics company and is building an India-made humanoid for industrial use. ISRO is building a half humanoid astronaut called Vyommitra. DRDO recently announced working on defence-use humanoid robots. And startups like Vanar Robotics are prototyping service robots out of cities.

But these are small moves in a game that’s scaling fast.

We still import most of our robotics components. And we rank 7th globally in industrial robot installations (that’s for fixed machines, not humanoids).

The bigger play, though, might not be in building the robot but also in powering its brain. And that’s where India’s $250 billion IT industry can shine. We could become the developers of robotic operating systems, the AI trainers, the remote operators, the cloud platforms that help them function.

And with global companies diversifying out of China, we can position ourselves as an assembly hub too, just like the way we now assemble iPhones. In fact, some global players are already exploring humanoid assembly in Asia to lower costs and reduce their dependency on China.

But for that, we’ll need to move fast with PLI-style subsidies, deeptech capital and strong supply chains.

Because once humanoids get smart and cheap, whoever owns the hardware, platforms and patents wins the race. And if we miss the bus, we might end up playing catch-up like we did during the semiconductor rush and EV boom.

So yeah, humanoids are a threat. But they’re also a fork in the road.

The only question is where do companies, and humanity at large, go with this technology. If you ask Elon, we’ll soon have 10 billion humanoid robots walking among us. And only time can tell if that’s vision or delusion.

Until then…

Don’t forget to share this story on WhatsApp, LinkedIn and X.

Here’s why getting a term plan early can do wonders for you & your family:

✅: Simply put, term insurance is where you pay a small amount of money in exchange for a large amount of protection. This protection usually kicks in in the event the policyholder passes away.

But not just that, if you ever develop a critical illness (eg. cancer) and have to quit your job, a term plan can give you a lump sum amount to make up for the lost income.

✅: As your parents near retirement, they may start to rely on your income. And so, a term plan will give you peace knowing that they'll be financially supported even in your absence.

✅: A term plan of ₹1 crore will cost you much lower premiums at 25 years than at 35. You can even get a ₹1 crore cover for as little as ₹10,000 a year if you are young and healthy. Plus, once these premiums are locked in, they remain the same throughout the term!

So don’t delay it! As they say, “The best time to buy term insurance was yesterday; the next best time is today.”

Click here to book a FREE call with Ditto Insurance’s certified advisors and get your personalised term insurance guidance.