India to focus on Engineering R&D services
By Roshna Sankar   |   Friday, 21 May 2010, 01:27 IST   |    1 Comments
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India to focus on Engineering R&D services
Bangalore: Engineering and R&D (ER&D) services market is all set to make India as the global hub for engineering services by 2020. The sector is expected to capture $40-45 billion in engineering services with export revenues at about $35-40 billion and domestic revenue of $4-6 billion. A large engineering base, with approximately 1 million engineers, is one of the key strength of India that attracts the customers globally. Infrastructure, aerospace and energy are expected to contribute more than 80 percent of the domestic revenue, said the study "Global ER&D: Accelerating Innovation with Indian Engineering", launched by NASSCOM in association with management consulting firm Booz & Company. Automotive, customer electronics and telecom are the top 3 spenders in ER&D sector. In 2020 these verticals are expected to be the highest revenue generating verticals. Already they have created an established supply base in the country. Currently there are more than 80 engineering off shoring companies in the country with North America as the primary source of revenue. Though it continues to remain the largest market, in terms of its contribution to total revenues is expected to decline from 62 percent in 2009 to 45 percent in 2020. But the European market is opening up and is expected to add 30 percent of the revenue. New opportunities from the Japanese market and other parts of the world are also expected to contribute 30 percent of the revenue. Over the past few years, global ER&D has been growing steadily. Organizations considers ER&D investments as essential for margin enhancements. Emerging markets have evolved to being prominent players in recent years and they will become leading player in the near future. Organizations are now providing services from basic process support to high value added services such as full product development. "India is now a major destination for ER&D services with a compelling value proposition, based upon the growing depth and breadth of services, flexible business models, large engineering base and global footprint with greater proximity to customers," said Som Mittal, President, NASSCOM, while addressing media on the sidelines of the "NASSCOM Engineering Services Conclave 2010". "Strategic focus and investment in ER&D has the potential to transform India into an engineering powerhouse and make engineering an important growth driver over the next decade. A $40-45 billion industry can create more than 5 million employment opportunities in engineering and related fields," said Vikas Sehgal, Vice President, Booz & Company, while addressing the media about the key findings of the report. The study has reviewed eleven major verticals namely, telecom, semiconductors, consumer electronics, medical devices, industrial automation, computing systems, automotive, aerospace, construction, heavy machinery, energy and infrastructure.

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