Following the footsteps of American companies such as Texas Instruments and General Electric, a lot of European MNCs are streamlining their plans to establish engineering research centers in India. The reason for these R&D centers remains the same – high-tech talent, low cost and an additional bonus of deepening of relationships between India and Europe in the technology space.
Recently corporations like Zurich Insurance, EagleBurgmann, French carmaker Peugeot, Numeca of Belgium and Dutch conglomerate Royal DSM have opened their research and development centres in Bengaluru and Pune.
According to Lokesh Payik, the director of the Indian centre of UK-based TT Electronics, “One of the primary reasons for looking at India was the increasing cost pressure and ability to cater to market requirements in a timeframe that does not compromise competitiveness.” TT Electronics is an automotive components manufacturer and its clients include BMW and Mercedes-Benz. The company started its operations in Bengaluru this February starting with a 20-member team. The company plans to expand its strength five-fold in a year.
“We were sitting on customer orders that required quick turnaround, but cost pressures and talent availability were hindering the process,” added Payik.
According to an estimate by the National Association of Software and Services Companies (Nasscom), withing past one year India has witnessed around 20 new European corporations’ engineering R&D centres set up. As of now, India have nearly 750 captive centres of foreign MNC, out of which some 350 are here for engineering R&D.
The value of India’s engineering R&D sector is estimated to be around $10 billion that translates into Rs 54,000 crore and industry forecasters expect it to rise to $45 billion by 2020.
