The engineering and R&D (ER&D) spending in India is expected to grow to ~42Bn USD by FY2022, says a new report from NASSCOM.
Globally the ER&D spending is projected to touch US $2 trillion, out of which 38 percent will be contributed by top 1000 corporates.
Thanks to the digital initiatives adopted by the ER&D industry, India has now emerged as favorite destination for offshoring ER&D services work across vertical, the report says.
Adapting to changing customer needs, business models, organizational structures and talent, Indian service providers and GICs are stepping up the value ladder in capturing global opportunities.
The six major trends that currently drive digital ER&D across multiple sectors globally are Internet of Things, Big Data Analytics, Artificial Intelligence & Machine Learning, Cybersecurity, Advanced Robotics, Mobile Applications and Digital Reality.
The key growth drivers for the Indian ER&D industry are going to be the country’s capabilities in the Automotive and Construction & Heavy Engineering (C&HE) market, which is being accentuated by local talent and rising domestic demand, NASSCOM said.
KS Viswanathan, vice president, Industry Initiatives, NASSCOM, said, “As digital technologies reshape businesses, this industry is constantly innovating to emerge as the hub for digital solutions. The industry is at the optimum position with the right talent, expertise and global market access and huge potential to grow.”
Due to the availability of highly skilled talent, many international companies have announced GICs in India, and GICs now account for 56 percent of the overall ER&D export revenues. The GICs are maturing into capability centers, and are investing heavily on talent and innovation, building dedicated centers focused on digital technologies.
EVs, autonomous, connected vehicles, smart products, services and automation are among the leading services that drive India’s Ind 4.0 evolution in the segment.
India’s digital spend across autonomous, connected, shared and electric cars is set to increase to 30-40 percent by 2025. Additionally, Indian firms are also investing in C&HE digital ER&D across IoT, telematics and autonomous vehicles.