The Hindu Business Line : R&D offshoring may face stiff competition from China

NEW DELHI: India, the most favoured global R&D offshoring destination, need to strengthen its research and development abilities, as the country is likely to face stiff competition from neighbouring China, says a study.

According to management consulting firm Zinnov Management Consulting, companies are realigning their global strategies in the wake of the recent US meltdown and countries such as India and China still continue to hold strong growth prospects as offshorin g destinations from across the world.

However, growth in R&D offshoring to China, with an estimated market size of $7.7 billion, is fast catching up with India, the favoured global R&D offshoring destination, the study revealed.

Offshoring to China is growing aggressively with increased Government support along with huge availability of local workforce, the domestic market opportunities and the least cost arbitrage, it said.

“Top Indian offshore business destinations today are facing tough competition from cities such as Shanghai and Beijing as favoured offshoring destinations and hence it's time for India to look into various aspects that can further strengthen the R&D land scape here,” Zinnov Management Consulting Chief Executive Officer, Mr Pari Natarajan said.

According to Zennov's 'MNC R&D subsidiary' study, the China market is estimated to be $6.4 billion, as opposed to a market of $5.8 billion in India.

The study also has revealed that as of today China is home to about 920 MNCs, who have established 1,100 R&D centers, which is greater than the number in India, the study pointed out. - PTI

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