Research and development centres in India contributed $18.3 billion, which is around one-third of the global R&D and services market.

According to a study done by management advisory firm Zinnov, Indian engineering R&D services revenue will touch $38 billion by 2020.

The study also pointed out to changing trends in the ER&D landscape that is undergoing rapid shifts with regard to the kind of services that can be outsourced. “With Social, Mobile, Analytics, Cloud (SMAC) and Internet of Things (IoT), there is a fundamental shift in the way a company is looking at its outsourcing service provider,” said Sundararaman Viswanathan, Manager-Consulting, Zinnov. He added that gone are those days when you just wanted to get some grunt R&D work outsourced to companies in India at cheaper rates. Industry watchers believe that while cost continues to be a factor, companies are more interested in outsourcing work that has a direct bearing on the business that they are in.

The study also ranked Wipro, TCS and HCL as top ER&D providers. Wipro has a rich Engineering Services heritage and innovation in its DNA, industry leading lab infrastructure and eco-system connects and is a clear leader in Hi-Tech vertical, according to the report.

Similarly, top IT services exporter TCS has a highly diversified and mature R&D practice, which is demonstrated through its positioning in leadership zone across all verticals in which it operates. HCL with its positioning in the leadership zone across most of the verticals and its capability addition in medical devices and construction and heavy engineering continues to be a formidable ER&D player.

However, others such as Infosys and Tech Mahindra are closing the gap by diversifying into newer verticals by leveraging their embedded and software capabilities and exploring newer customer segments like first time outsourcers and growth stage start-ups, according to Viswanathan.

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