R&D Centres in India: Brains for Hire
10/5/2003
An increasing number of foreign companies are realising the benefits of carrying out R&D work in India More than 100 foreign companies have set up development centres in India. Such centres are by no means restricted to the much-publicised software sector. They are being set up by companies in telecom, electronics, IT hardware, medical equipment, engineering design, consumer durables, automotive products, chemicals, plastics and pharmaceuticals. There are several reasons why foreign companies choose India for R&D: The base for software development can be gauged from the fact that India ranks second in the world in terms of the number of companies assessed by the Software Engineering Institute (SEI), a research centre established by the US Defence department. India has had 187 assessments, second only to the US, which has registered 1,563 assessments. Of the 76 companies worldwide that have attained capability maturity model (CMM) level 5 ranking, 42 are in India. India has already developed a strong reputation as a back office to the world. As more multinationals spot the opportunity and set up R&D centres in the country, it could soon be known as the world's laboratory as well.
Many foreign companies that were lured to India by the potential size of its domestic market have been disappointed. But some of them have made a serendipitous discovery: though they may not sell many products in the country, they can develop products there for a fraction of what it would cost elsewhere.