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Research and Development in India

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Research and Development in India

June, 2013


India is fast emerging as a major destination for high-end research & development (R&D) projects for multinationals across the globe. The country is home to a lot of top corporate R&D investors across sectors such as automotive, industrial machinery, information technology (IT), pharmaceuticals and biotech. The presence of these multinationals is leading to a rapid integration of India into the global research system.

India Inc is ranked at the topmost position worldwide in terms of growth in research and development (R&D) investments, highlighted a study by the European Commission. In terms of their absolute annual R&D investments, there are 14 Indian companies that have made it to the top 1,500 entities globally.

India currently has nearly 750 captive centres of foreign MNC, out of which some 350 are for engineering R&D. The value of India's engineering R&D sector is estimated to be around US$ 10 billion currently and is forecast to rise to US$ 45 billion by 2020, according to an estimate by the National Association of Software and Services Companies (Nasscom).

Indian R&D Sector and Global Impact

There is a growing trend of MNCs setting up their R&D centres in India with the objective of experimenting with their next generation business models, and developing cost efficient sustainable solutions. In the last one year, India has witnessed around 20 new European corporations' engineering R&D centres being established.

India and UK have announced 12 new R&D collaborations in the fields of advanced manufacturing, smart energy grids and energy storage. The new research grants involve over 30 industry partners from both the countries, contributing over 1 million pounds (US$ 1.54 million) to the projects. “These projects will build on this already strong relationship, boosting collaboration between researchers and industry in advanced manufacturing and energy infrastructure,” highlighted Mr David Willetts, Minister for Universities and Science, UK.

A memorandum of understanding (MoU) has been agreed upon - by the Natural Environment Research Council (NERC), UK and the Earth System Science Organsation (ESSO), Ministry of Earth Sciences (MoES), India - to facilitate cooperation between UK and the Indian earth system, science and environmental research communities.

Indian Space Research Organisation (ISRO) plans to launch the country's first navigation satellite - Indian Regional Navigation Satellite System-1A (IRNSS-1A) - on July 1, 2013. ISRO also plans to have a constellation of seven satellites under IRNSS by 2014-15.

The services sector which includes R&D, testing and analysis besides other related segments attracted foreign direct investments (FDI) worth US$ 37,235 million between April 2000 to March 2013, an increase of 19 per cent to the total FDI inflows in terms of US$, according to the latest data published by Department of Industrial Policy and Promotion (DIPP).

Key Developments and Investments

Israel has entered into a cooperation agreement with Karnataka to further bilateral business, technology, and economic relations. The agreement will facilitate financial support worth millions of dollars for cooperative R&D projects in the coming years.

India's Mars Mission, scheduled to be launched in November 2013, will call for collaboration between National Aeronautics and Space Administration (NASA) and ISRO.

Ahmedabad has put into place a first-of-its-kind - Heat Action Plan, making it the first city in South Asia, to create a comprehensive early warning system and preparedness plan for extreme heat events fuelled by climate change.

Some of the major investments:

  • Tata Industries and Ramot at Tel Aviv University (TAU) have entered into a strategic memorandum of understanding (MoU) to fund and generate leading-edge technologies
  • Dutch company Koppert has partnered with Namdhari Fresh to develop crop protection solutions suitable to Indian conditions. “We see there is a huge demand for natural and biological solutions in India and the market in which the majority of the population is vegetarian,” said Mr Robert Pathuis Director, Koppert
  • Huawei will set up a R&D centre at an investment worth Rs 813 cr (US$ 138.27 million) in Bengaluru by the second half of 2013
  • Yamaha Motor Co (YMC) has announced to set up its fifth global R&D centre - Yamaha Motor Research & Development India at its Greater Noida facility
  • Kyocera Documents India plans to set up a R&D facility in India with an investment of about Rs 100 crore (US$ 17 million) in the next 3 years
  • BHEL's investment in its R&D wing increased to Rs 1,248 crore (US$ 212.45 million), up 4.1 per cent over the previous year
  • On back of rapidly growing local R&D, Hero MotoCorp is setting up a technology and integrated R&D centre in Jaipur at an investment of Rs 400 crore (US$ 68 million)
  • Shilpa Medicare’s facility, a special economic zone (SEZ) at Pharma Park, Jadcherla in Andhra Pradesh is now functional. The new facility will deal with contract research and forward integration of its own formulation (i.e. manufacturing of oral and injectible onco-products)