RFID can be applied in supply chain management, retail inventory, healthcare sectors, and various other applications. As an emerging technology, it has the potential to provide efficiency, accuracy, and real-time visibility across distinct industries, streamlining operations.
While RFID adoption across the globe is quite rapid, fuelled by demand in retail and supply chain, the adoption of RFID is slower in India despite the existing hype. Multiple systemic challenges are causing this slower trend.
A key barrier in RFID adoption in India is that the cost of implementation is still relatively high, which many organizations, and particularly SMEs, are weighing against the value of the advantages RFID technology can provide.
In addition, there is a noticeable lack of knowledge or awareness about RFID technology, both in terms of the benefits of applying RFID and also regarding best implementation practices. This lack of understanding forces many businesses to remain hesitant about disengaging from traditional systems that have worked for them so far.
Lastly, organizations face issues with respect to the development of talent for RFID implementation: do it in-house or partner with an outsourcer. Each pathway poses its own level of risk, ongoing operating costs, and resource commitments.
In this blog post, we will discuss 5 key factors that are affecting the adoption of RFID technology in India.
Top 5 Reasons for Slow Adoption of RFID Technology in India
1.High Implementation Cost
Cost is a big deal-breaker factor in India when it comes to technology adoption. Whether it is a small retail chain or a big manufacturing or supply chain firm, they need to think about costs related to technology integration. The labour here is cheap, and when the cost of RFID implementation weighs higher, the businesses decide to stick to manual operations.
When it comes to RFID, the cost of RFID tags, readers, antennas, software infrastructure, and integration, as well as training, adds up quickly. These start-up costs are veiled in hefty investments that are daunting for small and medium enterprises.
The high investment costs at the start generally stop Indian businesses from piloting or utilising any form of RFID technology; however, they may agree that the benefits in the long term are worth it.
2. Insufficient Knowledge of RFID Technology
Lack of knowledge among business managers as to the value of RFID, as well as its capabilities and integration, is the second biggest challenge and a key factor behind slower-than-expected RFID adoption in India.
Corporations are not actively using RFID because of a lack of information regarding ROI, accuracy, or operational advantages.
For example, there are still a sizable number of logistics companies in India that do not comprehend RFID's usefulness in tracking nodes in real time. They still rely on QR codes and barcodes, often leading to errors and delays. Similar cases exist in healthcare, retail, and the manufacturing sector as well. The lack of basic know-how of RFID technology and reducing costs, ROI, operational efficiency, etc., is hampering its prospects in an emerging, high-consumption market like India.
3. Improper need assessment
Companies often waste resources, have systems underutilised, or purchase systems that don't suit their needs when they adopt RFID without considering how it might work within the operational environment.
Put simply, technology cannot just fix the firms' pain points; companies must also think about project scope, the supporting infrastructure, and industry-specific barriers before even implementing RFID. Improper need assessment can lead to an inflated budget, which then hampers RFID adoption.
So, what can be done? Businesses that want to leverage RFID technology should hire professional RFID experts who can understand operational requirements and suggest/design a roadmap for RFID deployment based on client needs.
Several Indian retailing organisations proceeded with the implementation of RFID to improve inventory control, but did not consider the required integration and training aspects of RFID, and ended up with under-utilised systems and reverted to a manual process.
Even government initiatives (i.e., RFID-enabled toll plazas), at times, have had issues resulting in aspects such as poor readability of tags or lack of public awareness that could be attributed to deficient assessment and user studies at the start of the initiative.
4. The Implementation Dilemma: In-House vs Outsourcing
The implementation conundrum, whether to implement an RFID system in-house or through outsourcing, is also a challenge. Some key business sectors like healthcare, IT, manufacturing, education, govt., etc., prioritise privacy, and outsourcing their RFID implementation doesn’t work well for them.
While cloud-based RFID solutions in India are aplenty, these solutions are not in trend due to privacy reasons. Many businesses go for in-house development, which takes time and inflates costs as well.
Doubts about control, costs, and ongoing maintenance all delay RFID adoption further as the organisation reconciles this dilemma.
In the healthcare sector, we have noticed that most hospitals do not have the IT capacity to have their own RFID system maintained, turning to outsourcing, but organisational leaders are hesitant due to data privacy and cost concerns.
'RFID-as-a-service' model can minimize costs, but fear around data ownership and data back-up remains a major challenge.
As a leading RFID solution provider in India, Ruddersoft Solutions Private Limited offers RFID solutions that can be customized to fit client needs. They also offer on-premise software deployment as well as a cloud-based, RFID as a Service solution that costs less and works efficiently, while also prioritising data privacy concerns.
5. RFID Market in India
The RFID market in India is still growing, especially when it comes to RFID tags, readers, and software infrastructure development. RFID tag manufacturers in India are still very few, and customization of tags as per client needs is underway. While global firms like Avery Dennison, Zebra, Chainway, etc. have set up offices in India, we’re still a long way to go when it comes to the Indian market and Indian businesses.
Avery Dennison is a very popular global firm in labelling and has set up their tag manufacturing factory in Noida, Uttar Pradesh, India.
The RFID market in India is affecting the uptake of RFID technology both through growth rates and barriers that businesses face. The Indian RFID market size was $561.5 million in 2024 and is expected to have strong growth with a CAGR of 11.09% from 2025 to 2033, which will reach $1.45 billion by 2033.
This strong growth is being fuelled by increased digitalisation, government initiatives like Digital India and Smart Cities, as well as the widespread use of RFID systems in various industries like logistics, manufacturing, transportation, and organised retail for inventory and asset tracking.
Global RFID Adoption: A Look
1.North America and Europe, in retail and healthcare, are ahead with adoption due to their existing level of knowledge development and infrastructure.
2. Asia-Pacific and, primarily, India are developing very quickly in the use of RFID in manufacturing and logistics.
3. Retailers are adopting RFID as a mechanism to develop their omni-channel offerings and, in doing so, are achieving inventory accuracy levels of more than 99.9%.
4. As examples, Walmart, H&M, Zara, Scotch & Soda, and Mango, and many other retail giants are utilising RFID for their retail operations, boosting RFID adoption in retail.
5. Logistics firms like FedEx are also utilizing RFID for streamlining their logistics operations and meeting customer expectations.
Sector-Specific Influences: India and International
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Sector
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Challenges
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Opportunities
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Retail
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External constraints, lack of ROI clarity
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Improved omnichannel reliability, anti-counterfeiting benefits
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Manufacturing
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No internal IT/computer capability, increased density of cost tags
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Lower cost in the supply chain, increased asset visibility
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Logistics
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No opportunity for traceability
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Real-time tracking, fewer inaccurate errors
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Healthcare
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Market and stakeholder complexities, higher cost
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Better patient safety, greater workflow efficiencies
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Services from EnCstore.com
If you're thinking about implementing RFID solutions, our RFID experts at EnCstore.com will guide you through the following steps:
a.Cost vs. Benefit- A question to help determine the correct route for your scale and your operations.
b. Customised Need Analysis- Determine the best RFID implementation to achieve real operational pain points.
c. Implementation Plan- Examined the benefits versus negatives of running the operations independently vs outsourcing, depending on the context.
d. Industry Knowledge- Understand what is happening in the market, you will have access to ROI (Return on Investment) data, and best practices from around the world.
Finally, RFID has the potential to change industries in India by providing operational efficiency, supply chain logistics, and visibility and accuracy in inventory for retail, manufacturing, logistics, and healthcare industries. Major hindrances to adoption remain the fear of the unknown costs, awareness of the ROI calculation of implementation, and uncertainty regarding outsourcing versus in-house deployment options.
Frequently Asked Questions
1. Why has RFID adoption been so slow in India?
Many reasons caused the slow adoption of RFID in India, including the high cost of implementation, lack of awareness regarding ROI, lack of IT infrastructure, and uncertainty in outsourcing versus in-house deployment.
2. What industries in India benefit the most from RFID?
The industries in India that are positioned to gain maximum efficiencies in developing countries are retail, logistics, manufacturing, and healthcare.
3. What is RFID doing to retail performance?
RFID allows a greater level of inventory accuracy, gives real-time visibility, allows omni-channel uses for Customers (ship-from-store and click and collect), and gives the ability to help counterfeiting.
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