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India top destination for R&D investments; beats US, China

Tue, 28th Jun 2016 (Source:Business Line)

India’s transformation into a global R&D hub is epitomised by the strides the country is making in attracting R&D investments in the electronics and IT segment, beating the likes of US and Germany.

As per the latest report from US-based HfS Research, India leads with 30 per cent of the global ER&D centre announcements.

“From April to December 2015, we found details of 190 ER&D centre announcements. India leads the pack with 57 of those ER&D centre announcements. Other prominent ER&D destinations are the US, China, Singapore, France, Israel, the UK, South Korea and Ireland,” Pareekh Jain, research director at HfS research, told BusinessLine.

Interestingly, one-third of Indian ER&D centre announcements were driven by ‘Make in India’, as per the report.

“Of the 57 ER&D centre announcements in India, 19 are driven by the ‘Make in India’ initiative. Many enterprises that plan to start or increase manufacturing in India are also opening or expanding their ER&D centres to design products specifically for the Indian market,” it said.

Some of the enterprises that invested in setting up their R&D centres in India as an extension of their manufacturing plans include auto majors such as Rolls-Royce and Michelin to electronics manufacturers such as Foxconn, Ericsson and LeEco.

China, Germany and Taiwan lead in ‘Make in India’ driven Indian ER&D centre announcements. Together these three countries account for more than two-thirds of the ER&D centre announcements. Other investing countries are Denmark, France, Japan, Spain, Sweden, and the UK.

Beyond low-cost

India is already home to ER&D centres of more than 1,000 enterprises. But most of the work that happened at these centres in the past was mostly low-cost engineering work for global markets. However, now these centres are also being used for designing products specific to Indian market.

“The ‘Make in India’ programme has accelerated this trend. India is becoming one of the biggest and fastest growing emerging markets especially in sectors such as electronic systems, electrical machinery and automobiles.

Global enterprises are investing their ER&D resources to design and manufacture products specifically for the Indian market. So, ‘Make in India’ combined with Designed in India and Sell in India is an attractive value proposition which enterprises can’t ignore,” Jain said.

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