New product development (NPD) is a term used to describe the complete process of bringing a new concept to a state of market readiness. Mechatronics based product requires a multidisciplinary approach for its modeling, design, development and implementation. An integrated and concurrent approach focusing on integrating the mechanical structure with basic three components namely sensors, controllers and actuators is required. This paper aims at developing a framework for a new Mechatronics product development. For conceptual design of Mechatronics system, various tools like Fuzzy Delphi Method (FDM), Fuzzy Interpretive Structural Modeling (FISM), Fuzzy Analytical Network Process (FANP) and Fuzzy Quality Function Deployment (FQFD) are used. Based on the prioritized design requirements, the functional specifications of the required components are developed. Then, Computer Aided Design and control system software are used to develop the detailed system design. Then, a prototype model is developed based on the integration of mechanical system with Sensor, Controller and Electrical units. Performance of the prototype model is monitored and Fuzzy failure mode and effect analysis (FMEA) is then used to rank the potential failures. Based on the results of fuzzy FMEA, the developed model is redesigned. The proposed framework is illustrated with a case study related to developing automatic power loom reed cleaning machine.