India is fast emerging as the global research and development (R&D) hub of the world. In the past ten years, the country has moved from a peripheral position in knowledge and technology sectors to being at the core, attracting a continuous flow of people, ideas and technologies from around the world.

The reason for this is obvious--the presence of world class institutions, a robust intellectual property regime and a rich talent pool of technical manpower available at a very competitive cost. India produces a huge pool of graduates--2.5 million per year in IT, engineering and the life sciences. It has the third largest scientific and technical manpower in the world, where 162 universities award 4,000 doctorates and 35,000 postgraduate degrees.

Global Majors

The natural advantage that India has in this segment has attracted an increasing number of international players. Around 150 MNCs already have a presence in the Indian research and development industry.

• Microsoft has built its largest development centre outside US in India.
• GE's centre in Bangalore is the company's largest research outfit outside the United States.
• Dell has established its biggest research and development centre outside the US in Bangalore.
• The Daimler-Chrysler Research Centre in India is one of three centres the company has outside Germany.
• SAP Labs India is the largest R&D hub and support presence for SAP outside Germany.
• Royal Shell Group has its second largest R&D centre - Shell Technology Centre - in Bangalore.
• India has emerged as the largest R&D centre for Cambridge Silicon Radio (CSR) -- a provider of personal wireless technology -- outside the UK. CSR's customers include Apple, LG, Motorola, Nokia and a host of other consumer brands.
• The University of Oxford is to set up its first research centre outside UK in association with the Confederation of Indian Industry in India.
• Advanced Micro Devices Inc.(AMD) has established its third development centre in Bangalore. India accounts for about 25 per cent of its global R&D efforts, in terms of workforce.
• Rolls-Royce has tied up with the Indian Institute of Science (IISc), Bangalore, and the Imperial College of UK to work together on a new research project to develop alloys for use in 'greener' aircraft engines.

Some of the other leading global players in this industry include IBM, DuPont, Monsanto, Cisco, Intel, General Motors, Astra Zeneca, Siemens, Hyundai, Delphi, Analog Devices, Hewlett Packard, Heinz and Motorola among others.

Broad-based Growth

India's R&D capability spans across a wide spectrum of industries: agriculture, biotechnology, energy, nanotechnology, information technology, space, defence, automobiles, aviation, pharmaceuticals, theoretical physics, and statistics among others.

For example, in the pharmaceutical industry, many firms are hiving off their drug research business into independent units to increase their presence in this segment. In fact, according to some industry estimates, the hived-off new drug research business of India's top ten pharma companies could independently be worth US$ 120 billion in market cap by 2015.