Is India set to take over the Global Engineering Services Industry?

Posted on February 3, 2011

India, at present, enjoys a relatively strong position in the automotive and high-tech telecom engineering services market. According to a recent industry report, the total offshore engineering spend is expected to grow to $150-$225 billion by the year 2020, and India with its huge talent pool and existing experience in engineering services, is well suited to take over the global engineering services industry.
India Emerges as a Key Player

By providing a wide range of engineering services across multiple industries including automotive (hybrid technology), aerospace (avionics and structures), telecom (next generation routers), and medical devices (low cost medical devices), India is looking towards tapping into the $750 billion-a-year global engineering services industry.

India’s main competition comes from China, Brazil, Central and Eastern Europe and South Africa. In order to maintain its position as a key player and capture the engineering offshoring market, India will have to work out a carefully planned strategy that will have to include strong marketing efforts with investments in infrastructure, workforce and expertise. Furthermore, attaining, training and retraining of talent will also be an essential requirement for India to maintain its current position in the industry.

India Leads the Global Engineering R&D Industry

A study conducted by the management consulting firm Booz & Company along with the National Association of Software and Services Companies (NASSCOM), reported a growth rate of more than 40% in the global ER&D industry and expectations of reaching $40 billion to $45 billion by 2020.

Speaking on India’s position in the global market Som Mittal, President NASSCOM, had this to say: “Due to the growing sophistication of the ER&D services industry, customers have begun to view service providers as strategic partners. India is now an epicenter for global ER&D services with a compelling value proposition based on its growing depth and breadth of services, flexible business models, large engineering base and global footprint with greater proximity to customers. Increasing investment in ER&D has the potential to transform India into an engineering powerhouse over the next decade with the potential to create more than five million jobs.”

India Offers a Wide Range of Unique Advantages

The advantages offered by India are unique and many: structural cost advantages, communication capabilities, capabilities across verticals, a strong and diverse service provider pool with a current and growing  employee base of 150,000 out of about one million trained engineers country-wide, and a range of business models to suit the diverse requirements of global corporations. These advantages have helped India establish itself as the premier location for offshore engineering services.

The emergence of India as a global leader in the engineering services industry will not only allow India to be placed on the global innovation map, but will also provide significant revenue generation.

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