India is no.1 Choice for Global Technology, Research and Development Centre

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The research and development or R&D is important for every country. India remains at no. 1 location for MNCs to establish product engineering and R&D centres outside their home countries, and the growth of these centres in India is outpacing the average global growth.

As per recent reports, R & D in India accounted for $12.3 billion, or 40%, of the total of $31 billion of globalized engineering and R&D in 2015. According to a study by consulting firm Zinnov. Compared to 2014, the revenues of the captives in India grew by 8.3%, as against the growth of 7.6% for all captives.

More information for Research and Development in India:

India is 2nd most populated country in the world. China follows India with revenues of $9.7 billion. Zinnov report finds that 69% of all new offshore technology centres in 2015 are set up in India. The new centres being set up and the older ones expanding, including those of Exxon Mobil, Lowe’s, Visa, Victoria’s Secret, JC Penny, CME Group, Wells Fargo, and British Telecom.

  • Independent software vendors and telecom outsourcers dominated the niche.
  • Software & internet accounts for 35% of the work being done in the captives.
  • Telecom & networking follows with 14%.
  • And semiconductors industry with 12%.
  • Consumer electronics, automotive, computer peripherals are also included.
  • Medical devices, industrial, and aerospace & defence are other areas of work.

India accounted for $7.8 billion, or 21.6%, of the total outsourced engineering and R&D services of $36 billion in 2015. Compared to 2014, it grew at 12.7%, as against the global growth of 8.7%.

Softwares giants in India like TCS, Wipro and HCL Technologies have been the leading players in this space. However, Infosys, Tech Mahindra, L&T and Aricent are giving good competition to the top 3 mentioned companies in India.

Zinnov finds another interesting trend: India is the 2nd largest outsourcing destination, after Western Europe, where companies like Altran, Alten, Akka Technologies, Assystem and Harman Connected Services are present strongly.

Mr. Sidhant Rastogi, partner in Zinnov, said, “Five years ago, the growth was coming primarily from captives. Now, the captives have matured, and it is the third-party service providers who are growing faster”.

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Praveen Jain
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