India Engineering Research And Development (ER&D) Services Market Size
| Study Period | 2019 - 2030 |
| Base Year For Estimation | 2024 |
| Forecast Data Period | 2025 - 2030 |
| Market Size (2025) | USD 133.71 Billion |
| Market Size (2030) | USD 217.90 Billion |
| CAGR (2025 - 2030) | 10.26% |
| Market Concentration | Medium |
Major Players*Disclaimer: Major Players sorted in no particular order |
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India Engineering Research And Development (ER&D) Services Market Analysis
The India Engineering Research And Development Services Market size is estimated at USD 133.71 billion in 2025, and is expected to reach USD 217.90 billion by 2030, at a CAGR of 10.26% during the forecast period (2025-2030).
- Engineering Research and Development (ER&D) services are crucial drivers of innovation and technological advancement. In recent years, India has emerged as a significant player in the global ER&D services market. The country's advanced and skilled educational infrastructure, a large pool of skilled engineers, and favorable government policies have catalyzed this growth.
- One of the primary drivers behind the demand for ER&D services in India is its cost advantage. Hiring engineers and running R&D facilities in India is comparatively more economical than in developed nations. Despite this cost advantage, Indian engineers are renowned for their innovation and expertise, ensuring that quality is not compromised. This dual benefit allows companies to realize significant cost savings without compromising on the quality of their research and development efforts.
- The Indian government has actively implemented various plans to fasten the growth of ER&D services. Initiatives such as "Make in India" and "Digital India" have played an important role in positioning India as a leading global manufacturing and innovation center. These strategic moves foster foreign direct investment (FDI) in the ER&D sector and offer compelling incentives for companies to establish R&D centers within the nation. Moreover, by easing regulations and enhancing infrastructure, the government has significantly amplified the sector's growth.
- Telecom companies are investing in R&D to develop new technologies, improve network efficiency, and enhance user experience. This has led to a surge in demand for ER&D services, particularly in areas such as network optimization and IoT integration. For instance, in October 2023, Ericsson initiated its India 6G program by establishing an exclusive India 6G Research Team at its R&D Center in Chennai. Such developments are continuously growing and driving the overall market.
- The Indian engineering research and development services sector is expected to grow significantly in the coming years. The country's skilled workforce, cost advantage, government initiatives, technological advancements, and growing domestic market are key drivers of this demand. As India continues strengthening its position as a global hub for ER&D services, it will play a crucial role in shaping the future of innovation and technology worldwide.
India Engineering Research And Development (ER&D) Services Market Trends
Rising Demand of Engineering Research and Development Services in Automotive
- The demand for engineering research and development (ER&D) services in the Indian automotive sector is witnessing significant growth, driven by various factors, including technological advancements, regulatory changes, and evolving consumer preferences. Also, the shift towards electric vehicles (EVs), connected cars, and autonomous driving technologies has created a need for extensive R&D services.
- With the rising demand, Indian companies are increasing their investments in EV platform development, refining battery technologies, and incorporating cutting-edge telematics and connectivity features. Industry giants such as Tata Motors and Mahindra & Mahindra are at the forefront, spearheading the drive for sustainable automotive solutions, targeting both local and global markets. This surge is prompting automakers to enhance their Engineering R&D efforts, crafting models tailored to these evolving preferences.
- Over the years, the Indian automotive sector has grown. As per the report by SIAM India, after a decline in sales volume of two-wheelers across India in 2021, the market witnessed growth in 2023, and the volume stood at around 19.5 million across India at the end of fiscal year 2023. Such growing demand for two-wheelers in the country has driven the demand for new engineering research and development services in India, which is driving the overall market.
- Moreover, as the demand grows, the Indian automotive sector is witnessing substantial investments and collaborations aimed at enhancing R&D capabilities. Global automotive giants and Indian companies are entering partnerships to leverage each other's strengths. For instance, in January 2024, Valeo announced its manufacturing, aftermarket, and R&D center in Tamil Nadu. The company's Global Technical Center in Chennai, functioning as a main hub for research and innovation, unites more than 3,700 top engineering professionals from various regions of India.
- Consumer preferences are shifting towards SUVs and premium vehicles, reshaping the automotive R&D landscape. Today's buyers seek vehicles that blend comfort, advanced features, and top-notch performance. This surge in demand is prompting automakers to ramp up their engineering R&D investments, focusing on crafting models that meet these evolving preferences. The SUV segment is poised for substantial growth, fueled by the rising appeal of versatile, rugged vehicles that can seamlessly navigate both city streets and off-road terrains.
Rising Number of Engineering Research and Development Service Centers in Tier 1 Cities
- The demand for engineering research and development (ER&D) services in tier 1 cities in India is experiencing substantial growth due to several key factors, including the concentration of talent, favorable business environments, and robust infrastructure. Tier 1 cities such as Bengaluru, Hyderabad, Chennai, Mumbai, Pune, and the Delhi-NCR region host a significant proportion of India's highly skilled workforce. These cities produce a large number of engineering graduates annually, creating a vast talent pool for ER&D services.
- Tier 1 cities offer a conducive business environment with advanced infrastructure, numerous tech parks, and specialized economic zones that support ER&D activities. These cities are also home to many global capability centers (GCCs), which have evolved from back-office operations to centers of innovation and digital transformation. GCCs in tier 1 cities focus on developing new digital capabilities, automation, and AI-driven solutions, driving the demand for ER&D services.
- According to a report by World Population Review, there are eight largest cities in India by population. In 2023, Delhi was the largest city in terms of the number of inhabitants. The capital city was estimated to house nearly 33 million people, followed by Mumbai, Kolkata, and others. With the growing population in these cities, many companies look forward to opening their ER&D centers in tier 1 cities.
- For instance, in May 2024, Honda's research and development arm for motorcycles and power products in India, Honda R&D (India) Private Limited (HRID), unveiled its new Solution R&D Center in Bengaluru, Karnataka. The center's primary goal is to spearhead Honda's ambition of achieving carbon neutrality across its products and corporate operations by 2050. Honda is actively striving to transition a significant portion of its product lineup to utilize carbon-neutral power sources.
India Engineering Research And Development (ER&D) Services Industry Overview
The India Engineering Research and Development (ER&D) Services Market is semi-fragmented due to the presence of several players. Several key players in the digital transformation market are constantly making efforts to bring advancements. A few prominent companies enter collaborations and expand their footprints in India to strengthen their positions. L&T Technology Services, Tata Technologies, HCL, Infosys, and others are the major players in the market.
• February 2024: Tata Elxsi announced its expansion in Pune, marking the inauguration of a new Global Design and Engineering Center at the Sukhwani Business Hub. This center is strategically designed to provide services to the technology and digital transformation needs of prominent automotive OEMs and tier-1 suppliers.
India Engineering Research And Development (ER&D) Services Market Leaders
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HCL
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Infosys
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L&T Technology Services
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Tata Technologies
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Wipro
- *Disclaimer: Major Players sorted in no particular order
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India Engineering Research And Development (ER&D) Services Market News
- June 2024: MedTech company Olympus Corporation announced plans to establish an Engineering R&D Offshore Development Center (ODC) in Hyderabad, India. This move follows a strategic partnership with HCLTech to broaden Olympus' innovation efforts. The collaboration's primary goal is to bolster Olympus' engineering capabilities, fostering breakthroughs that advance healthcare quality through technology.
- April 2024: Infosys, an India-based company, announced its plan to acquire in-tech, a firm specializing in Engineering R&D services for the automotive sector. This move bolsters Infosys' existing Engineering R&D prowess and underscores its dedication to guiding global clients through their digital engineering transformations. With this acquisition, the company will continue to strengthen its Engineering R&D experience in digital engineering.
India Engineering Research And Development (ER&D) Services Industry Segmentation
ER&D Services encompass a range of offerings tailored to enterprises, focusing on the design and development of various products, from devices and equipment to platforms and applications. These services pave the way for the eventual sale of the product, whether through software development or traditional manufacturing. The ER&D spectrum typically includes software, embedded, and mechanical engineering services, delineating the diverse expertise involved.
The Indian engineering research and development (ER&D) services market is segmented by service provider type (global capability centers (GCCs), engineering service providers (ESPs)), by industry vertical (automotive, industrial and transportation, construction, and heavy machinery (TCHM), hi-tech-led verticals (software and internet, semiconductor, telecom, etc.), services-led verticals (BFSI), healthcare, etc.) by service line (mechanical and electrical engineering services, embedded, engineering services, software engineering services), by geography (tier 1 cities, tier 2 cities, rest of India). The market sizes and forecasts are provided in terms of value (USD) for the above segment.
| By Service Provider Type (Market Size Estimates and Forecasts for 2022-2034, Associated Trends) | Global Capability Centers (GCCs) |
| Engineering Service Providers (ESPs) | |
| By Industry Vertical (Market Size Estimates and Forecasts for 2022-2034, Associated Trends, List of Key ESPs in Each Sector, Key Services in Demand within Each Sector, Use Cases, and Innovation Impact in India) | Automotive |
| Industrial and Transportation, Construction & Heavy Machinery (TCHM) | |
| Hi Tech-led verticals (Software & Internet, Semiconductor, Telecom, etc.) | |
| Services-led verticals (BFSI, Healthcare, etc.) | |
| By Service Line (Market Size Estimates and Forecasts for 2022-2034, Associated Trends) | Mechanical and Electrical Engineering Services |
| Embedded Engineering Services | |
| Software Engineering Services | |
| By Geography (List of Key Cities within the Geographic Segment, List of Key GCCs in Each City, List of Key ESPs in Each City) | Tier 1 Cities |
| Tier 2 Cities | |
| Rest of India |
| Global Capability Centers (GCCs) |
| Engineering Service Providers (ESPs) |
| Automotive |
| Industrial and Transportation, Construction & Heavy Machinery (TCHM) |
| Hi Tech-led verticals (Software & Internet, Semiconductor, Telecom, etc.) |
| Services-led verticals (BFSI, Healthcare, etc.) |
| Mechanical and Electrical Engineering Services |
| Embedded Engineering Services |
| Software Engineering Services |
| Tier 1 Cities |
| Tier 2 Cities |
| Rest of India |
India Engineering Research And Development (ER&D) Services Market Research FAQs
How big is the India Engineering Research And Development Services Market?
The India Engineering Research And Development Services Market size is expected to reach USD 133.71 billion in 2025 and grow at a CAGR of 10.26% to reach USD 217.90 billion by 2030.
What is the current India Engineering Research And Development Services Market size?
In 2025, the India Engineering Research And Development Services Market size is expected to reach USD 133.71 billion.
Who are the key players in India Engineering Research And Development Services Market?
HCL, Infosys, L&T Technology Services, Tata Technologies and Wipro are the major companies operating in the India Engineering Research And Development Services Market.
What years does this India Engineering Research And Development Services Market cover, and what was the market size in 2024?
In 2024, the India Engineering Research And Development Services Market size was estimated at USD 119.99 billion. The report covers the India Engineering Research And Development Services Market historical market size for years: 2019, 2020, 2021, 2022, 2023 and 2024. The report also forecasts the India Engineering Research And Development Services Market size for years: 2025, 2026, 2027, 2028, 2029 and 2030.
India Engineering Research And Development (ER&D) Services Industry Report
Statistics for the 2025 India Engineering Research And Development (ER&D) Services market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. India Engineering Research And Development (ER&D) Services analysis includes a market forecast outlook for 2025 to 2030 and historical overview. Get a sample of this industry analysis as a free report PDF download.
