The engineering research and development (ER&D) market in India will be worth $42 billion by 2020, according to a study by the advisory firm Zinnov.
Currently, the ER&D market in India is worth $14.7 billion. With a 22% market share, the nation has emerged as the number one offshore destination globally for delivering ER&D
Speaking on the findings, Sundararaman Viswanathan, manager-consulting of Zinnov, said India was poised to contribute to global ER&D as the ecosystem of captive centres,
service providers and startups increasingly worked together to drive innovation.
"With emerging nations growing in importance as key markets, MNCs are set to leverage the inherent competencies in India to build products for local and global markets," he said.
The study on 'Engineering R&D: Advantage India' pointed out that engineering services in India for healthcare and automotive were growing at a faster pace than more traditional verticals such as telecom, at 26% and 17% CAGR respectively.
Service providers in India were looking to strengthen their expertise in software product and embedded development.
They were increasing innovation in products and platforms, by engaging startups, universities, global development forums and MNC captives, increasing investment in domain/vertical-specific infrastructure and talent and partnering with MNCs in their go-to-market strategy.
"There has been significant activity in the Indian captive landscape in FY2012, with presence of 874 centres compared with 836 in FY2011 and the determining factor for this is the strong focus on emerging nations as target markets across major verticals," Pari Natarajan, CEO of Zinnov, said.
According to Zinnov's Global Ranking of R&D Service Providers, which evaluates competencies of various players across geographies, HCL and Wipro emerged as leaders in enterprise mobility and cloud segments while Cybage emerged as one of the strong and niche players in new media and entertainment segment.