India riding high on global R&D wave
500 MNCs expected to launch captive centres in India by FY25; India accounts for 45% of GCCs across the world as it’s home to more than 1,300 global organizations; Though Bengaluru has the highest number of such R&D centres, Hyderabad is fast emerging as the city of choice for many global majors
Bengaluru: India is witnessing a slew of announcements from multinational corporations (MNCs) in setting up new global capability centres (GCCs) or expanding their existing ones in the last two quarters.
Cities like Bengaluru and Hyderabad are the places of choices of these foreign companies which are setting up their research and development (R&D) centres to execute not only routine IT operations, but also conduct cutting edge research for driving innovation.
According to analysts, this is a new wave of GCCs being set up or expanded, reflecting the confidence in India as the hub for technology resources.
"As things normalize across the world with regard to the Covid pandemic, many global MNCs are making public announcements of expanding their R&D centres in India or setting up new centres. This shows that enterprises are increasingly investing on digital. Importantly, Indian R&D centres of global firms are doing high end technology innovation work for global centres," said Pareekh Jain, an engineering services expert and Founder of Pareekh Consulting.
India accounts for 45 per cent of GCCs across the world. Global consultancy firm Deloitte in a report said that the country is home to more than 1,300 global organisations, employing more than 1.3 million people and generating $33.8 billion in annual revenue in FY20.
After a slump in opening of GCCs in 2020 amid the Covid pandemic, this pace of setting up new centres or expanding existing centres have again picked up in 2022. Most of the Fortune-500 companies have set up engineering centres in India.
In financial services, AMEX, Citibank, American Express, HSBC, Fidelity; in technology companies, Google, Microsoft, Amazon, IBM, Dell, Accenture, HP; in retail, Tesco, Supervalu, Target; in consulting, McKinsey, KPMG, Deloitte, JPMorgan and many others have set up their engineering centres in the country.
In the last week, Zurich-headquartered global technology company ABB and global retailer Lowe's India have announced expansion of their engineering centres in the country.
According to the latest report by Deloitte, close to 500 MNCs are expected to launch captive centres in India by FY25.
Among cities, Bengaluru and Hyderabad have emerged as the cities of preference for opening up these technology captive centres in the country. Though Bengaluru has the highest number of such R&D centres, Hyderabad is fast emerging as the city of choice for many global companies. In a significant move, Microsoft has announced establishment of its largest data centre in Hyderabad this month.
Indian R&D centres of global firms are doing high end technology innovation work for global centres
- Pareekh Jain, an engineering services expert and Founder of Pareekh Consulting