Research and Development
India is presently ranked 76th among a total of 143 economies, as per the Global Innovation Index (GII).

Research and Development in India

Latest update: July, 2016

Passenger vehicle exports from India

 

Last Updated: July, 2016

INNOVATION AND PATENTS SECTOR REPORT | January, 2016

Introduction

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.

Adobe System Inc expects India to contribute significantly to the overall growth of the company as a substantial portion of Adobe's core Research and Development (R&D) is being done in the country.

Market Size

Overall India-based R&D Globalization and R&D Services market reached US$ 20 billion@ 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 toalmost double by 2020 to US$ 38 billion.

India accounts for 40 per cent (US$ 12.3 billion) of the total US$ 31 billion of globalised engineering and R&D in 2015.#

According to thestudy, 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.

Recent Investments and developments

  • The Government of India and the Government of the United Kingdom have signed an agreement to work together in the fields of Solar Energy and Nano Material Research, which is expected to yield high quality and high impact research outputs having industrial relevance, targeted towards addressing societal needs.
  • The Indian Space Research Organisation (ISRO) has successfully launched 20 satellites and injected them into the required orbit, launching the maximum number of satellites in a single mission ever. The launch took place aboard the Polar Satellite Launch Vehicle (PSLV-C32) at the Satish Dhawan Space Centre in Sriharikota.
  • Boston Scientific Corporation plans to develop devices such as stents, catheters and pacemakers at its Gurgaon facility in India for the Asia Pacific, Middle East and African markets, which will make India its biggest R&D hub outside the US.
  • India is becoming a new innovation destination of choice, with Bengaluru been ranked fifth among the top ten destinations in the world to open innovation centres.$
  • Ford Motor Company plans to set up a new global technology and business centre in Chennai, which will host operations of Ford Global Business Services in areas of Information Technology (IT), product engineering, finance and accounting and data analytics.
  • Rusan Pharma, a firm which specialises in de-addiction and pain management products, plans to invest Rs 100 crore (US$ 154.82 million) in a R&D centre and a manufacturing unit in Kandla, located in Kutch District in Gujarat.
  • India’s largest two wheeler manufacturer, Hero Motocorp has set up an integrated R&D facility with an investment of Rs 850 crore (US$ 126 million) on the outskirts of Jaipur.
  • Daikin plans to invest Rs 600 crore (US$ 88.94 million) to set up a R&D centre and a manufacturing plant at Neemrana in Rajasthan, in line with the government's Make in India initiative.
  • Informatica, a US-based cloud and data management company, plans to make huge investment in next four years to expand its Bengaluru R&D facility.
  • QuEST Global, a pure-play engineering and research and development (R&D) services provider, has raised investment of around Rs 2,396 crore (US$ 351.54 million) from leading global investors Bain Capital, GIC and Advent International for a minority stake in the company.
  • The National Research Development Corporation (NRDC) has signed a Memorandum of Understand (MOU) with Indian Institute of Chemical Biology (IICB) which will give an impetus to the “Startup India” and “Make in India” missions of the Government of India by promoting entrepreneurships, incubation, Intellectual Property Rights (IPRs) and technology transfer.
  • Switzerland-based Ferring Holding SA, a research-driven, specialty bio-pharmaceutical company, plans to set up its R&D centre in Hyderabad at an investment of US$ 250 million.
  • ISRO is taking steps towards developing its own reusable rocket using a Winged Reusable Launch Vehicle Technology Demonstrator (RLV-TD), whose tech demo is expected to be conducted in February 2016.
  • German automotive firm Bosch Gmbh has signed a memorandum of understanding (MoU) with Indian Institute of Science (IISc), Bangalore with a view to strengthen Bosch’s research and development in areas including mobility and healthcare thereby driving innovation for India-centric requirements.
  • Chinese telecom gear maker Huawei has launched a Research and Development (R&D) campus in Bengaluru with an investment of US$ 170 million. The campus, the first by any Chinese company, has a capacity to accommodate 5,000 engineers and is the largest R&D centre of Huawei outside China. At present 2,700 people are working here, with 98 per cent being local workers.
  • Kellogg plans to set up its R&D centre in India in 2015. Besides developing products specifically for India, Kellogg aim to make its India R&D unit a lead centre for creating products for other emerging markets where Kellogg is present.
  • Chinese smartphone maker Xiaomi has signed the lease for its R&D centre in Bengaluru, which is expected to be launched later in 2015. Xiaomi has leased a 20,000 square feet building space for their R&D centre in Cessna Business Park in Bengaluru.
  • American chipmaker Broadcom is betting big on developing solutions tailored to India and other emerging nations from its Bengaluru R&D unit. The key opportunities focused on are in the areas of Internet of Things and wearables market in India. Out of Broadcom’s global headcount of about 11,000 people, the India R&D centre has about 1,500 people.
  • Dell is looking towards strengthening its engineering team in India and increasing the number of patent applications filed from India. The country has already become the largest contributor to software patents for Dell.
  • Specialty chemicals maker BASF SE is setting up an innovation campus in Navi Mumbai at a total investment of Rs 360 crore (US$ 53.37 million). The innovation campus is in addition to the R&D centers in Mumbai and Navi Mumbai.
  • Twitter Inc is planning to set up its first facility outside the US in the form of an R&D centre in Bengaluru to grow faster and accelerate user adoption in emerging markets. Twitter plans to use Bengaluru-based mobile marketing and analytics company ZipDial Mobile Solutions Pvt. Ltd’s team to build this new R&D facility.
  • French three-dimensional design software firm Dassault Systemes has decided to extend its 'Living Heart' research initiative to India, a move that will give surgeons in India’s top cardiac institutes, access to the company's 3D heart simulation platform.
  • California based Cohesity, a start-up involved in secondary storage space, has recently launched operations in India and is expected to invest US$ 10 million in the country over the next two years in research and development.

Government Initiatives

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 and Japan are exploring ways to strengthen their collaboration in various fields of science and technology, such as artificial intelligence, energy, ocean sciences, marine instrumentation, high skill development and analysis of Big Data, Research & Development and bio information, while many projects are in the planning process.

The Department of Industrial Policy and Promotion (DIPP) aims to lower the time taken to clear pending Intellectual Property Rights (IPR) applications to 18 months by March 2018 and those of trademarks to one month by March 2017, which is expected to encourage innovation and entrepreneurship in the country.

The Union Cabinet has given an "in principle" clearance for the location of a Laser Interferometer Gravitational-Wave Observatory (LIGO) facility in India which will be the third in the world and will be set up and managed by the IndIGO Consortium (Indian Initiative in Gravitational-wave Observations).

India’s steel minister Mr Narendra Singh Tomar has announced creating a fund of Rs 100 crore (US$ 14.67 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.

Road Ahead

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$ 0.0148 as on July 11, 2016

References: Media Reports, Press Information Bureau (PIB), Innovation Council of India, Union Budget 2015-16, Department of Industrial Policy and Promotion (DIPP)

Notes – @ -‘Global R&D Service Providers Landscape Study 2015’ report released Zinnov Management Consulting, # -according to a study by consulting firm Zinnov, $-Capgemini report titled ‘Digital Dynasties: The Rise of Innovation Empires Worldwide’

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

Posters

Brand India Pharma

ACCELERATED RD

India's R&D sector has been growing at an astonishing pace of 20 per cent per annum for the last several years.

+ More >

Brand India Pharma

IBEF Publications

IBEF Publication

India Now Magazine


India Now Business and Economy

English

+ More Publications >

IBEF Publication

Blog – Perspectives on India More

Powered by the Who's Who of India

author_shobhit-jain1.jpg India: Unlocking our skies
Dr. Shobhit Jain, IRS, Deputy CEO IBEF

In a major boost to regional air connectivity, the Government of India has recently announced that it plans to set up 50 new airports in the country over the next three y...

author_ravi-capoor1.jpg GST: Great Step of Transformation
Ravi Capoor, IAS, Chief Executive Officer, IBEF

The much-awaited Constitution Amendment Bill for Goods and Services Tax (GST) was passed in the Parliament recently and is expected to be implemented by April 2017 replac...

author_Narayan_51.jpg Making SMEs bankable and banking on SMEs
Mr. R. Narayan, Founder & CEO, Power2SME

India is considered a "bright spot" in the gloomy, global economic scenario today. The country with a GDP growth of 7.6% (in 2015-16) has topped the World Bank'...

author_ravi-capoor1.jpg Brand India Engineering at INNOPROM 2016
Ravi Capoor, IAS, Chief Executive Officer, IBEF

India successfully showcased its strengths in the field of engineering at the flagship Russian international trade fair, INNOPROM 2016 held at Yekaterinburg, Russia from ...

author_Ritesh_Agarwal1.jpg How is OYO catering to the changing needs of Millennials
Ritesh Agarwal, ‎Founder & CEO, OYO Rooms

As we see one of the largest generation in the history move into the earning and then spending stage in their lives, it is imperative that marketers understand the behavi...

author_ravi-capoor1.jpg India: The most open economy for FDI
Ravi Capoor, IAS, Chief Executive Officer, IBEF

The Government of India has recently announced radical liberalisation of the Foreign Direct Investment (FDI) regime by easing norms for a host of important sectors includ...

ideas More

Ideas

A Big Step Forward
Krispian Lawrence co-founded Ducere Technologies with Anirudh Sharma in 2011. Lechal is the outcome of their concerted efforts to use haptics in the wearable technology space. Both Anirudh and I were always fascinated by wearable technology, and were tinkering with various ideas in this space. But the concept was nascent...

JOIN IBEF.org

Join IBEF.org now. Enjoy FREE subscriptions downloads, updates and more.

Error

Already a member?
Login / Retrieve Password

x IBEF : India Brand Equity Foundation