Research and Development outsourcing to India looking up

March 5, 2012: The Information Technology and Business Process Outsourcing Industry in India are eagerly waiting for the budgets of the clients in US and UK. The budget will decide the business for the sector in the forthcoming financial year. The slowdown in the United States and the credit crunch in Europe have affected the growth of the industry.

India has become a destination for Research and Development activities for the multinational companies. Now India is considered as a R&D and innovation hub by the companies in the West. During the time of financial crisis, it is the Research and Development activities that are cut down. But when the economy returns to normal or shows signs of improvement, R&D usually makes a comeback. This will benefit developing nations such as India as it is becoming a R&D hub.

It is strongly believed that the Research and Development activities in India will make a comeback during 2012 as the western economies improve. According to Anuj Puri, Chairman, Jones Lang LaSalle, the US economy is performing well and companies are looking forward to outsource to achieve growth.

Mean while, government sources say that Bangalore city will be turned into the R&D hub in the country. M N Vidyashankar Principal secretary for Information Technology, Bio-Technology and Science and Technology, Karnataka, says that the government has decided to introduce an umbrella organization for research and development activities. He added that the organization will be set up in Bangalore, which is considered as the Silicon Valley of India.

The proposed umbrella organization will work with about 395 research labs in Bangalore city and will coordinate the business activities among the labs. For instance, if a company approaches the umbrella organization for developing a new tablet PC, the organization will direct the project to one of the R&D service provider.

In another development, Sikorsky Aircraft has chosen India as their destination for research and development, which will serve the company’s global operations. The company plans to set up its base in Hyderabad. The company source has said that they are looking for partners in India to improve their expertise. The source said that Tata Elxsi will probably be one of their technology partners in the country. Sikorsky is in the final stages of deciding on a partnership with a technology firm from India to improve their technology mix.

The outsourcing industry in India is expected to grow at 11 to 14 per cent in the financial year 2012-2013.

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