Opportunities for UK businesses in India: Advanced engineering and manufacturing
India has emerged as an attractive destination for design and engineering, as more multinationals establish their R&D centres in India and expand their outsourcing operations in the country to include product design. The engineering sector contributes 12% of India’s GDP and the country is forecast to capture up to US$ 45 billion in R&D services by 2020.1
India’s manufacturing sector grew by 10.8% in 2009, fuelled both by accelerating internal consumption and large investments. The Indian engineering sector has the advantages of a large working-age population, access to a large domestic market and proximity to reserves of natural resources and raw materials such as coal, iron ore and bauxite. Moreover, India has an outstanding cost advantage, with manufacturing costs 30% lower than in Western countries.
Given high growth prospects and a low cost structure, Indian engineering companies are planning to increase their scale and global footprint. As such, they are keen to invest in R&D and acquire technologies to help them move up the value chain. The Indian engineering sector offers opportunities for raw materials, machinery and equipment, design, parts, technological collaboration, R&D and manufacturing. Aside from traditional user industries, such as those in the automotive, heavy engineering, construction, power, chemicals, consumer durables and aerospace sectors, there are new opportunities in emerging sectors such as nuclear power, semiconductors, hi-tech/telecom, defence and security. India produces many engineers and has a growing number of engineering colleges.
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1 India Brand Equity Foundation. www.ibef.org