Over 70% ER&D firms in India to hike spending in GCCs, ESPs: Survey

Over 70 per cent of the companies that have their global capability centres (GCC) and engineering services provider arms in India are planning to increase their budget in the range of 10-25 per cent this year, according to a joint survey by Deloitte and industry body Nasscom.

According to the survey, 72 per cent of respondents with India GCCs expect to see an increase in their ER&D budget in the range of 10-25 per cent, while 52 per cent with India ESPs expect their ER&D spend on ESPs to increase in the range of 10-25 per cent.

Over 70 per cent of the companies that have their global capability centres (GCC) and engineering services provider arms in India are planning to increase their budget in the range of 10-25 per cent this year, according to a joint survey by Deloitte and industry body Nasscom.

ER&D (Engineering R&D) spend in India GCCs within ‘automotive and transportation’ and ‘industrial’ sectors is expected to grow the most, and predicted to be in the range of 10-25 per cent, the survey report said.

“Earlier reports have pegged the Indian ER&D market growth at a CAGR of 12 per cent until 2025 and this growth story has been well reinforced by the findings of the pulse survey. With more companies planning to strengthen their presence in the country, the growth prospects for India GCCs and ESPs have grown manifolds,” Deloitte India partner Keerthi Kumar said.

The survey analyses responses from 104 R&D leaders across 19 countries, including North America, Germany, Israel, Japan, and India, and 12 sectors encompassing automotive and transportation, aerospace & defence, telecom, software products, medical devices, hardware and electronics, industrial, and energy, oil and gas.

According to the survey, 72 per cent of respondents with India GCCs expect to see an increase in their ER&D budget in the range of 10-25 per cent, while 52 per cent with India ESPs expect their ER&D spend on ESPs to increase in the range of 10-25 per cent.

“Building in-house remains the most favourable strategic choice for approximately 70 per cent of the surveyed companies to accelerate their R&D initiatives, however co-creation is gradually gaining traction,” the report said.

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