The Hindu Business Line : BPO in engineering services could be next big opportunity for India: Nasscom

(From left) Mr S. Ramadorai, Chairman, Nasscom; Mr B. Ramalinga Raju, Vice-Chairman; and Mr Kiran Karnik, President, at the Knowledge Session on "Engineering Services" in Bangalore on Monday. — G.R.N. Somashekar

Bangalore , June 20

THE National Association of Software and Service Companies (Nasscom) said on Monday that outsourced engineering services with market potential of $7-12 billion could be the next big opportunity for India.

At present, the value of work undertaken by India-based vendors in this space was around $500 million, which highlights the significant untapped potential.

The Nasscom Chairman, Mr S. Ramadorai, said the engineering services currently offered from India are around product design, process engineering, plant operation and enterprise asset management among others.

Several Indian IT firms as well as niche-engineering firms and captive units were doing high-end work in verticals such as automotive and aerospace, he said.

Till now, engineering services were divided into IT services (R&D services) and ITES-BPO (engineering BPO) services.

"However, as this market evolves, and increases in terms of maturity, we will consider it as a separate segment," Mr Ramadorai said. The target verticals for Indian firms in engineering services were automotive, aerospace, pharmaceuticals, construction, manufacturing and embedded software and chip design, he said.

The Nasscom President, Mr Kiran Karnik, said the apex industry body plans to set up an Engineering Services Forum that would focus on building a brand for India as the outsourcing destination for engineering services and also set standards for this space.

The Nasscom Vice-Chairman, Mr B. Ramalinga Raju, said competition from China was a concern for the industry. However,

India could compete with China by harnessing its strengths, he said adding, the success in India's IT services could be replicated in the engineering services space.

Countries such as Germany, the UK, France and the US dominate the outsourced engineering services industry. About 13 per cent of the outsourced engineering work is carried out in India whereas China and other Asian countries account for 19 per cent, according to Nasscom.

Replying to a query, Mr Karnik said though China has emerged as the destination for mass manufacturing, India with its high engineering base and IT expertise could emerge as the destination for high value manufacturing.

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