According to a recent report, India's Engineering Research and Development (ER&D) sector is predicted to contribute 22% to the global ER&D sourcing market by FY30, up from 17% in the current fiscal year. Furthermore, it is anticipated that by FY30, the country’s share of worldwide corporate ER&D sourcing is projected to increase from US$ 44-45 billion in FY23E to US$ 130-170 billion.
In the Nasscom-BCG Report "Seizing the ER&D Advantage: Frontiers for 2030," it is projected that India will account for over 60% of worldwide sourcing for engineering research and development in three major industries- semiconductors, software, and automation. It is anticipated that the semiconductor ER&D sourcing share will increase the most, from 9% in FY23E to 12% in FY30, making it the third-highest contributing industry.
According to the report, the stability of the global industry and the focus on digital innovation would likely cause ER&D spending to expand at a rate of 8-9% compounded annual growth rate (CAGR) between 2023 and 2030. The spending for the same was about 7-8% CAGR during 2022-23.
The report said that the main factor of the global increase in ER&D investment is expected to be digital engineering, which will account for over 65% of spending in 2030 (compared to 45% in 2023). The survey predicts that the software industry in India will continue to have the largest proportion of sourcing, followed by the automobile industry. The survey also says that the industry might find more room to grow within the segment, especially if industries like utilities, telecommunications, energy, and aerospace and defence support it.
According to Mr. Amit Kumar, Managing Director and Partner at BCG, “India will play an increasingly important role in the global ER&D arena by helping drive next-gen ER&D agenda across sectors – key ER&D accelerators for India include Automotive (xEV, Connected Vehicles, and Infotainment); Energy, Utilities, Oil and Gas (Climate and Sustainability, and Digital Operations) and MedTech (Remote Patient Monitoring Devices and Advanced Imaging).”
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
