The research ecosystem in India presents a significant opportunity for multinational corporations across the world due to its intellectual capital available in the country. Legions of Indian engineers working across the globe highlight the highly trained manpower available at competitive costs. Consequently, several MNCs have shifted or are shifting their research and development (R&D) base to India. These R&D bases either develop products to serve the local market or help the parent company overseas deliver new innovative generation of products faster to the markets across the world.
Overall India-based R&D Globalization and R&D Services market reached US$ 20 [email protected] in 2015, up by 9.9 per cent over 2014. R&D Services market stood at US$ 7.76 billion and R&D Globalisation market (Captives) stood at US$ 12.25 billion. India’s R&D globalisation and services market is set to almost double by 2020 to US$ 38 billion.
According to the study, India-based R&D services companies, which account for almost 22 per cent of the global addressed market, grew much faster at 12.67 per cent. The market for Engineering R&D (ER&D) companies in India is mainly structured across pure play PES companies such as Cyient, QuEST, eInfochips and the larger IT companies with a PES play such as Wipro, TCS, HCL. India's ER&D services market is expected to reach US$ 15-17 billion by 2020 and North America continues to be the largest market contributing to 55 per cent of revenues.
The Government of India has taken several steps to promote the R&D sector in India. In the Union Budget 2015-16, the government announced plans to establish National Institution to Transforming India (NITI) to increase involvement of entrepreneurs, researchers to foster scientific innovations.
India’s steel minister Mr Narendra Singh Tomar has announced creating a fund of Rs 100 crore (US$ 15 million) to help setting up R&D units with the participation from industries and the government to overcome the technological gaps. Mr Tomar said “It is under the active consideration of the government to infuse more funds in this initiative to utilise locally available cheap raw material, to remain competitive in the world market.
A team of scientists from India and Bangladesh will conduct for the first time, joint marine research within Bangladesh’s Exclusive Economic Zone (EEZ), which is expected to help in understanding climate change and monsoon patterns in India.
With the government’s support, the R&D sector in India is all set to witness some robust growth in the coming years. According to a study by management consulting firm Zinnov, engineering R&D market in India is estimated to grow at a CAGR of 14 per cent to reach US$ 42 billion by 2020.
India is also expected to witness strong growth in its agriculture and pharmaceutical sectors as the government is investing large sums to set up dedicated research centres for R&D in these sectors. The Indian IT industry is also expected to add to the development of the R&D sector.
Exchange Rate used: INR 1 = US$ 0.015 as on December 17, 2015
References: Media Reports, Press Information Bureau (PIB), Innovation Council of India, Union Budget 2015-16, Department of Industrial Policy and Promotion (DIPP)
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