Industries are implementing efficient production systems for practical survival in the present era of intense competition. This paper aims to investigate the status of the cellular manufacturing system (CMS) in Indian manufacturing industries concerning the level of adoption, factors, and challenges associated with CMS implementation. A survey instrument was designed to assess respondents' awareness of CMS practices and explore CMS's level of implementation. Statistical tests were conducted to determine the CMS practices factors and challenges associated with the implementation of CMS. It is observed that in Indian industries, the rate of implementation of CMS is still low. However, the study shows that if implemented in Indian industries, CMS can be beneficial. In the Indian context, the current study would provide a future direction to conduct detailed research on CMS's implementation status.