Design services

As India emerges as a global design hub, multinational companies (MNCs) are increasingly outsourcing industrial and engineering design tasks in diverse industrial sectors like semi-conductors, aerospace, automotive, farming equipment, power generation and consumer electronics among others.

Recently, Tata Motors’ small car Nano has received the good design award for 2010, from the Chicago Athenaeum: Museum of Architecture and Design with the European Centre for Architecture Art Design and Urban Studies.

Wipro Lighting won the coveted ‘Design for Asia Merit Recognition Award 2010’ in Product Design category for the most influential good design in Asia. The award was won for Wipro’s designer LED streetlight, Orio.

Among the major firms focussing on research and allied sectors,

• Kone, the Finnish elevator and escalator company, has set up the Indian Technology and Engineering Centre to house its research and development (R&D) and engineering units under one roof in Chennai.
• California-based device software optimisation (DSO) provider Wind River Systems, a wholly-owned subsidiary of Intel Corporation, plans to set up a research and development (R&D) centre in India to focus on innovation to its product line. According to Damian Artt, senior vice-president (worldwide sales and services, Wind River Systems said, "The country's industrial output rose 16.7 per cent in January 2010 from a year earlier, stronger than the market expectations, and India stands tenth in global spend with $24 billion in FY09. It is a critical market for Wind River."
• Indus Institute of Technology and Engineering (IITE) has collaborated with Georgian College, Canada, to provide a unique Advanced Diploma in Mechanical Engineering Technology—Automotive Manufacturing for Indian students.

Automobile Design

Indian automobile companies have come of age and can today boast of several indigenously designed cars. Tata Motors has designed and developed its small cars, Nano and Indica, in India.

Propped by the increase in its car sales after the launch of General Motors' (GM) new model Beat, along with the robust growth in the Indian automobile sector, Kevin E Wale, President and Managing Director, General Motors China Group stated that India should be among the top ten markets for the company globally by 2011.

Tata Motors plans to build new Jaguar Land Rover engines in-house, combining the expertise of the group's engineers in India and the UK.

India has now established itself as a 'brand in engineering' with global original equipment manufacturers (OEMs) looking at India as a good outsourcing hub.

• Rolls-Royce Group plc, the global power systems company, and Tata Consultancy Services (TCS), an IT services, business solutions and outsourcing firm, have announced a global engineering services partnership. As part of the agreement, TCS will support and enable Rolls-Royce strategy to expand its engineering services footprint in India.
• Pune-based Automotive Research Association of India (ARAI) and DSM of the Netherlands have entered into an alliance to develop new lighter materials that could substitute metals in the automotive industry, and help auto components shed weight.
• RSB Transmissions (I) Ltd, engaged in manufacturing of automotive, construction and farm equipment, has acquired, through its Netherland-based arm RSB Europe BV, 70 per cent stake in the Belgium-based construction equipment aggregate manufacturer Mechanical Supplies International NV (MSI).

Austria-based Miba Group has entered into a joint venture (JV) with the Pune-based clutch components manufacturer Maxtech Sintered Product Pvt Ltd. The JV would provide Indian and international car manufacturers and suppliers with high-tech sintered components.

Aviation Design

With a blend of its state-of-art information and aerospace technologies, India has tremendous potential in the area of design in aerospace. Engineering and design services being outsourced to India include control system design, embedded development, high level aeronautical system design, simulation, testing devices, cockpit equipment support software, air traffic management systems, and composite structuring.

• Global aviation companies, such as Boeing and Airbus, are trying to increase their footprint by sourcing more components from India. As per Ian Thomas, President, Boeing India, said, "We are looking at partnerships with various Indian companies for different aircraft components." In the next 3-5 years, the infrastructure sector is looking at investments of more than US$ 500 billion.
• A PriceWaterhouseCoopers (PwC) report on aerospace and defence cites auto part makers planning to enter aircraft component production, particularly in precision engineering, machining, aircraft lighting, tyre manufacture and transmission components. The south is gearing up for a stellar role in the space.
• American aviation giant, Boeing has set up its research and technology centre at Bengaluru, which will work in the areas such as aero structures and aerodynamics to sustain the company's competitive technological edge.
• According to Anand Mahindra, Vice Chairman and Managing Director, Mahindra & Mahindra (M&M), the firm plans to invest US$ 53.95 million to build a plant to manufacture aircraft components. Meanwhile, Mahindra Aerospace plans to become the first Indian private firm to manufacture smaller civil aircraft for the Indian general aviation market.

Semiconductor design

According to the India Semiconductor Association (ISA), sustained by demand from the telecom and IT sector, the semiconductor market in India is poised to grow at a CAGR of 22.1 per cent to touch US$ 8.04 billion in 2011.

Furthermore, as per ISA-Frost & Sullivan, India Semiconductor Market 2009-2011 reported, the Indian semiconductor market grew 15.6 per cent in 2009. "The opportunity in the semiconductor industry is expected to witness a CAGR of 34.8 per cent in the Total Available Market (TAM), the revenue of which is anticipated to climb to US$ 4.84 billion in 2011 from US$ 2.66 billion in 2009," as per the study.

India's microchip market is set for a robust compounded annual growth rate (CAGR) of 22.1 per cent, according to a report released by the India Semiconductor Association (ISA). The study said that wireless handsets, notebooks, set-top boxes, smart cards and newer technologies like 3G and WiMax are powering demand that feeds this growth.

As per Biswadip Mitra, Chairman, ISA, "The total available market for the Indian electronics industry is anticipated to rise significantly to US$ 37.1 billion in 2011 from US$ 25.4 billion in 2009."

Engineering services

The engineering sector is the largest segment of the overall Indian industrial sector. The engineering industry accounts for 12 per cent of India's GDP.

EEPC India, apex body of engineering exporters, has started off a series of 22 Buyer-Seller Meets (BSMs) across seven locations, including New Delhi, Kolkata, Chennai, Mumbai, Bangalore, Ludhiana and Ahmedabad in March 2010. In the first BSM series, nearly 100 Indian companies in the engineering sector had direct business talks with their counterparts from USA, Canada, Europe and CIS countries. Besides, 30 buyers from USA, Canada, Turkey, France, Slovenia, Spain, Bulgaria, Spain, Armenia and Ukraine etc attended the meet.

India enjoys a cost-advantage in casting and forging, as manufacturing costs in India are 25-30 per cent lower than western countries.

Mentor Graphics Corporation has partnered with Wipro Technologies to continue to enable time-to-market and first-time right solutions to their global product engineering customers.

QuEST Global, a global engineering services provider, has extended its master agreement with Rolls-Royce till 2015. QuEST Global will support the engineering resources of Rolls-Royce across its business divisions through an engineering centre located in Bangalore, India.

Eurocopter has inaugurated its Indian subsidiary which has been given the goal of expanding its commercial presence in the country, reinforcing its support and service network and developing the company's relations with the domestic industry. Eurocopter, which already has a facility in Bangalore for the management of industrial activity, plans to have an engineering centre in the city by next year apart from a commercial office in Mumbai.

US-based Identity management software provider, SailPoint has set up an engineering and support centre in Pune at an investment of US$ 9,92,172. The centre will team with SailPoint's US-based engineering team to deliver next-generation identity management.

Engineering Services Outsourcing (ESO)

The Engineering Services Outsourcing (ESO) sector is another sector with great potential. ESO includes product design, research and development and other technical services across sectors like automotive, aerospace, hi-tech/telecom, utilities and construction/industrial machinery.

According to a study by NASSCOM and Booz Allen Hamilton (a strategy and technology consulting firm), the global engineering services market in 2020 is estimated to touch US$ 1,100 billion, of which the outsourced component is estimated to reach around US$ 200 billion. As per the report, India may capture around 25 per cent of the global ESO pie, worth around US$ 40 billion by 2020. At present the ESO market is around US$ 15 billion, with India enjoying 12 per cent share. The engineering services landscape in India has evolved significantly over the last four years, reflecting maturity, diversification and enhanced verticalisation to partner with global corporations, as per the study.

Chennai is fast emerging a hub in engineering design, R&D and product development for a number of global players. Companies across sectors- automobile, telecom, infrastructure, wind energy have set up their centres in the city encouraged by the good eco-system, talent pool and growing number of original equipment manufacturers (OEMs).

Government Initiatives

Indian service providers have invested considerably in increasing their global footprint to provide services to geographically distributed customers. They have established sales teams in North America and Europe and delivery centres in China and Japan for closer interaction with customers in the former and to co-ordinate efforts with existing manufacturing facilities in the latter. Within India, companies have begun to move to tier-2 cities to take advantage of lower costs of operations and to access a large graduating pool of engineers.

The miscellaneous mechanical and engineering industries sector-wise foreign direct investments (FDI) inflows from April 2000 to January 2010 was calculated at US$ 891.49 million, as per the Department of Industrial Policy and Promotion (DIPP).

The Government has announced a series of policy initiatives and programmes - a special incentive package for investments in manufacturing, setting up a National Electronics Mission and an Electronics Development Fund - in the field of information and communication technology (ICT).

Science and Technology

India is one of the top-ranking countries in the field of basic research. India's current rise in science is as impressive as its economic surge in recent years and the country clearly has the potential to become the home for world class research, as per a study by Thomson Reuters titled 'Global Research Report: India'.

In a recent trend small technology firms are moving into the support space by offering free 24x7 technology support for their products bought by small and medium businesses (SMB) and home offices. These new start-up firms are gearing up to fill in the US$ 1 billion technology support market.

Space Technology

India is one of the few countries with expertise to conceptualise, design and manufacture satellites and the capability to launch them into space. In fact, it has the largest constellation of remote sensing satellites in the world.

The Department of Space has been allocated a total of US$ 1.47 billion (including a non-Plan US$ 205.93 million in the Budget 2011-12 – of which, US$ 458.34 million would be dedicated towards launching vehicles and related technologies.

As per a study by CII-Antrix-Deloitte, India is likely to increase its space spending by an average of 14.8 per cent annually in the next four years to touch US$ 2.13 billion by 2014. At present, the country is ranked sixth in terms of space budget and technological capabilities. As compared to the previous year, the government has increased its space budget by around 22 per cent to US$ 1.23 billion for 2010, which is around 0.14 per cent of the GDP.

ANTRIX Corporation Ltd, ISRO has been conferred with the most prestigious Globe Sustainability Research Award 2010 by the Globe Forum, Stockholm, Sweden.

Indian Space Research Organisation (ISRO) successfully conducted the flight testing of its new generation high-performance sounding rocket on March 3, 2010 from the Satish Dhawan Space Centre (SDSC), SHAR.

In collaboration with the French National Space Agency, India plans to launch a satellite for monitoring sea water levels in 2011. The satellite, Saral, will carry an altimeter (ALTIKA) for studying the sea surface heights and an ARGOS payload, which is a satellite-based data collection platform.

Honeywell International expects sales in India to grow at about 15 per cent annually over the next five years, as a surging economy drives demand for industrial automation as well as aerospace and security systems.

Closer co-operation between Indian Space Research Organisation (ISRO) and UK's space programme for a broader and deeper partnership between the two countries has been called for by David Willetts, British Minister for Universities and Science.

ISRO is planning to send astronauts to space before the year 2015-16, said deputy project director of ISRO's Chandrayaan Mission Jaswinder Singh Khoral.

Space Vision India 2025

ISRO's vision and mission statement comprises of

• Satellite-based communication and navigation systems for rural connectivity, security needs and mobile services
• Enhanced imaging capability for natural resource management, weather and climate change studies
• Space science missions for better understanding of solar system and universe
• Planetary exploration
• Development of Heavy lift launcher
• Reusable Launch Vehicles - Technology demonstrator missions leading to Two Stage To Orbit (TSTO)
• Human Space Flight

Nuclear science

With the opening up of India's nuclear energy sector; nuclear science and its study has become the new thrust area

• India and Canada have signed a landmark civil nuclear deal in June 2010. The agreement made Canada the eighth country with which India has a civil nuclear agreement.
• The Heavy Water Board (HWB) has bagged one of its biggest export orders of 11 metric tonnes (MT) of heavy water from South Korean state-owned power firm KHNP in 2009-10
• India has already marked its entry into the nuclear export market, with a new reactor model christened `AHWR300-LEU'. The prototype uses low enriched uranium along with thorium as fuel and is being marketed for countries with small grids

Nano Mission

Buoyed by the success of the launch of student satellite StudSat, created by Karnataka and Andhra Pradesh engineering students and launched by ISRO, colleges are approaching ISRO to help them create miniature satellites.

IIT Bombay is working on a 10-kg satellite, ‘Pratham', fitted with a ‘total electronic content' measuring instrument, while IIT Kanpur is planning a five-kg satellite, ‘Jugnu', with a near-infrared imaging system. Two Chennai-based universities — SRM University and Sathyabama University — are also developing small satellites to measure atmospheric pollution.

The Defence Research and Development Organisation (DRDO) plans to set up a nano-foundry by investing US$ 111.07 million to US$ 133.29 million. This project will be a cluster with the partnering of IITs and other academic institutions of India.

Renewable Energy

Some facts regarding the renewable energy sector in India:

• India is the fifth largest wind energy producer in the world, with installed capacity of nearly 10,500 MW and targets to scale up capacity to 14,000 MW by the end of 2011, according to Arun Natarajan, MD & CEO of Venture Intelligence. The government has targeted a 20,000 MW capacity by 2020 under the National Solar Mission
• India's first-ever 3 MW solar photovoltaic (PV) power plant has been set up at a cost of US$ 12.9 million by Karnataka Power Corporation Limited (KPCL) in Kolar district
• Electro Power Systems SpA of Italy has launched in India lectroSelf, the world's first entirely self-recharging fuel cell system for backup power.
• The Confederation of Indian Industry (CII) and Indian Green Building Council (IGBC) have launched Leadership in Energy and Environmental Design (LEED) 2011 Green Building Rating System for India. India is among the top three countries to have a large green-building footprint.
• Pune-based energy and environment solutions’ provider Thermax has initiated a solar project at a village in Chakan near Pune, in association with the Department of Science and Technology at a cost of US$ 2.84 million to electrify the village using an indigenously developed solar-cum-biomass fuelled technology
• Global venture capital (VC) and private equity (PE) companies will invest up to US$ 1 billion by the end of 2010-11 in high-growth, incentive-driven renewable energy companies, according to industry estimates
• India plans to set up a pan-South Asia electricity ring that envisages interconnection with Bhutan entailing possible investment of US$ 850 million (3,000 MW), a 400- kilovolts (KV) transmission line at US$ 50 million for Nepal, a 1,000 MW HVDC link for Sri Lanka costing US$ 415 million and a 1,000-MW HVDC back-to-back link with Bangladesh at US$ 220 million
• The number of carbon credits issued for emission reduction projects in India is set to triple to 246 million by December 2012 from 72 million in November 2009, according to a research study by CRISIL Ltd. The study further expects renewable energy capacity of India to increase to 20,000 MW by December 2012, from the current 15,542 MW
• The US Agency for International Development's Regional Development Mission for Asia (USAID/RDMA) plans to increase its presence in India through its clean-tech energy initiative, the Environmental Cooperation-Asia Clean Development and Climate Programme (ECO-Asia). It aims to catalyse policy and finance solutions for clean energy by partnering stakeholders and mentoring and working with the policy makers.

The government of India has taken some initiatives to further promote renewable energy in the country

• According to the Union Minister of New and Renewable Energy, Dr Farooq Abdullah, the government targets to set up 1,100 MW grid-connected solar plants including 100 MW capacity plants as rooftop and smaller solar power plants for the first phase of the National Solar Mission till March 2013. The government has approved US$ 974.65 million for the mission
• In addition, the government plans to generate 20,000 MW solar power by 2022 under the three-phase National Solar Mission, with 2000 MW capacity equivalent off-grid solar applications, including 20 million solar lights, also planned to be installed during the same period

Intellectual Property

Intellectual Property reflects the idea that its subject matter is the product of the mind or the intellect. These could be in the form of Patents; Trademarks; Geographical Indications; Industrial Designs; Layout-Designs (Topographies) of Integrated Circuits; Plant Variety Protection and Copyright.

• India is a member of the World Intellectual Property Organization (WIPO), the United Nations (UN) agency that administers treaties in the field of intellectual property
• India is a member of the Patent Cooperation Treaty (PCT) which facilitates the procedure for obtaining patents in several countries, through the filing of a single application
• The Government has set up a National Institute of Intellectual Property Management (NIIPM) at Nagpur and it is expected to be fully functional by this year. The NIIPM, envisaged as a world class institution, will undertake wide-ranging activities such as training, education, research and would also function as an IP think tank

Patents

According to the Department of Industrial Policy and Promotion (DIPP) and Intellectual Property Rights (IPRs) document

• The filing of patent applications has increased from 4824 in the year 1999-2000 to 36,877 in the year 2008-2009
• The grant of patents has increased from 1,591 in 2001-02 to 18,161 in 2008-09

Further,

• A total of 3488 Pharmaceuticals product patents were granted by the Indian Patent Office during 2005-2010

Trademarks

According to the Department of Industrial Policy and Promotion (DIPP) and Intellectual Property Rights (IPRs) document

• The filing of applications has increased from 90,236 in 2001-02 to 130,172 in 2008-09
• As against 8,010 registrations in 1999-2000, 102,257 trademarks were registered in 2008-09

Other developments

Janapriya Projects, a special purpose vehicle between Janapriya Engineers Syndicate and Kotak Reality, has entered into a technology tie up with Finnish major Elematic, for setting up a pre-cast construction unit at its integrated township project coming up at Sainikpuri in Hyderabad.

The Jharkhand government is acquiring 1,000 acres of land near Ranchi for developing an IT hub with a view to make the state new 'silicon valley' of the country.

Research and Development

Technological and systematic innovation plays a leading role in motivating fast economic and productivity growth. Innovation provides the channel for the introduction of new and improved products and services to the marketplace and adoption of new or improved production processes with businesses. The National Knowledge Commission's report on innovation observes that not just large but also small and medium enterprises (SMEs) in India are now looking at R&D as their thrust area and main driver of growth and competitiveness.

As per a report by NASSCOM and Booz and Co, the domestic market in India for engineering R&D (ER&D) services is expected to witness robust growth. It is estimated that by 2020 almost 10-15 per cent of the country's total ER&D services market could be generated from its domestic market capturing an estimated returns worth US$ 40-45 billion. Furthermore, the Indian ER&D services market has shown a compound annual growth rate (CAGR) of more than 45 per cent from US$ 1.5 billion in 2004 to US$ 8.3 billion in 2009.

The National Innovation Council (NIC) will create a US$ 221.46 million national innovation fund in two to three months to provide venture capital for early-stage innovations, said Arun Maira, member of NIC and the Planning Commission.

Global R&D Hub

• Stefan Zoller, European Aeronautic Defence and Space Company NV (EADS), Chief Executive (defence & security) stated that, "We will transfer some of our development projects, which we have in Europe for Eurofighter or other military aircraft to India, where we have set up a military research and development (R&D) centre in Bangalore."
• "From our perspective, there is a definite trend where we develop products for the Indian markets. This is not necessarily for Indian companies, but for our global customers who wants to develop products for Indian market," according to GH Rao, corporate vice president, Engineering and R&D services of HCL Technologies. It is also developing base stations to be used in rural area in India for one of its global customers.
• The Indian Bureau of Mines' (IBMs) Modern Mineral Processing Laboratory and Pilot Plant, set up with the assistance of United Nations Development Programme (UNDP) in 1960, is attracting clients from various parts of the world. The Laboratory and Pilot Plant of the IBM in Nagpur is equipped with State of Art facilities to carry out R&D activities and is doing extremely well on its professional front, according to CS Gundewar, IBM Controller General
• Honeywell India has grown from being a US$ 50-million company with about 50 people, to more than US$ 500 million in revenue and 11,000 employees. The company's area of operations include aerospace, automation, transportation and specialty materials, including the recently-developed green fuel that does not require cars to change their engines.
• GXS, a business-to-business e-commerce services provider, is planning to make India a major research and development (R&D) hub for the company by strengthening its R&D team through an addition to its workforce.

Achievements

India figures among the top three innovations markets for the multinational foods companies. The main driver being the growing domestic market, driven by a buoyant middle class as the economy grows in an impressive speed.

• India is among the top five governments in the world funding research and development in neglected diseases, with particular focus on diseases like leprosy and dengue fever.
• India's total pharma industry market is expected to touch US$ 20.9 billion in 2014. R&D spending at India's top 25 drug companies soared 17 percent in 2008-2009, according to a survey conducted by Pharmabiz news service.
• Greendiamz Biotech Pvt Ltd, in partnership with Limagrain-France, has launched India's first fully-biodegradable and compostable bioplastic material. Champat Sanghvi, Chairman of the company, stated that the 5,000-tonnes-a-year facility, set up at a cost of US$ 8.5 million, has been commissioned to manufacture sheets and bags as an alternative to plastic for consumer and industrial products.
• Biocon's custom research subsidiary, Syngene International and Endo Pharmaceuticals, US, will jointly discover and develop novel biological drug molecules to fight cancer, announced Biocon Ltd. The deal is the first in India involving the discovery of a biological therapeutic entity.

Tie-ups

• IBM has signed a research collaboration agreement with IIT-Madras and IIT-Kharagpur to develop systems that will help power grids become more efficient and resilient.
• For the development of high strength steel, the Steel Authority of India Ltd (SAIL) has tied up with the Geneva-based CBMM (Companhia Brasileira de Metalurgia e Mineracao of Brazil) Technology Suisse SA.
• Renault Nissan Technology and Business Centre India Pvt Ltd have begun research work in the area of battery. The centre, established in the Mahindra World City Industrial Zone near Chennai, will work on developing technologies in lead acid and lithium batteries, said Haruyoshi Kumura, Director, Nissan Science Foundation.
• Sanofi-Aventis and Oxford University have entered into an agreement with INDOX, an academic oncology network to conduct oncology clinical and translation research in India.
• DSM of the Netherlands and Pune-based Automotive Research Association of India (ARAI) have entered into an alliance to develop new lighter materials that could substitute metals in the automotive industry and help auto components shed weight.
• Biocon Ltd stated it would buy out the 49 per cent equity stake of its Cuban partner CIMAB S.A. in their seven-year-old joint venture, Biocon Biopharmaceuticals Pvt Ltd.
• Wind River Systems, a California-based device software optimisation (DSO) provider— a wholly-owned subsidiary of Intel Corporation—is planning to set up a R&D centre in India to focus on innovation to its product line.
• UOP LLC, a Honeywell company, has announced that it has signed a memorandum of understanding (MoU) with Indian Oil Corp Ltd (IOCL) under which the two companies would collaborate on R&D for a range of biofuels technologies and projects in India.

Investments

• To further encourage R&D across all sectors of the economy, weighted deduction on expenditure incurred on in-house R&D has been enhanced from 150 per cent to 200 per cent. Weighted deduction on payments made to national laboratories, research associations, colleges, universities and other institutions, for scientific research has been enhanced from 125 per cent to 175 per cent. The income of such approved research association shall be exempt from tax, according to the budget 2010-11
• Kendle, world's fifth largest clinical research organisation(CRO), that started operations in Gujarat's first IT special economic zone (SEZ) Mindspace in June 2010 is all set to embark on its second phase of expansion soon. The CRO that started with around 50 people dealing with clinical data management, will expand to 103 by February 2011, and eventually up to 300 associates.
• Novozymes, one of the largest producers of industrial enzymes, has opened its new research and development (R&D) centre in Bangalore. The centre will undertake protein engineering work for Novozymes’ global requirements and will act as a resource base for the company’s global discovery projects.
• NDS Ltd, a leading provider of technology solutions for the digital pay television industry, has firmed up plans to invest US$ 400 million for research and development (R&D) work in India.
• MSD Pharmaceuticals Pvt Ltd plans to set up a research and development (R&D) centre with UK-based Wellcome Laboratories in India with a total investment of US$ 130 million.
• Power equipment manufacturer Bharat Heavy Electricals (BHEL) plans to increase its expenditure on research and development (R&D) by almost 50 per cent to US$ 261.66 million by 2011-12.
• Crompton Greaves Ltd (CGL), a part of the US$ 4 billion Avantha Group, is planning to set up a research lab at its existing Nashik facility and this project is estimated to cost at US$ 8.76 million.
• Stem cell bank Cordlife plans to expand its operations to about 40 locations in Tier II cities across the country with an investment of US$ 7.72 million, according to Meghnath Roy Chowdhury, Managing Director.
• Powerwave Technologies R&D India plans to recruit 100 engineers for its Indian operations in Hyderabad by the end of 2011, to add to its existing headcount of 250.
• Sri Biotech Laboratories India Ltd plans to set up an integrated discovery centre at Genome Valley with an investment of US$ 6.67 million. The new discovery centre will focus on agriculture, health and environment.
• Daikin Airconditioning India Pvt Ltd—a 100 per cent subsidiary of Daikin Industries Ltd, Japan—plans to set up a research and development (R&D) centre in India to develop products tailored to each of the emerging markets.
• R&D Services excluding basic research and setting of R&D/ academic institutions which would award degrees/diplomas/certificates would be allowed 100 per cent foreign direct investments (FDI) under the automatic route

Road Ahead

Automotive, telecommunication and semiconductors sectors have been the major income generators for the industry with the embedded software design contributing almost 40 per cent to the revenue base. The increased number of offshore development centres (ODC) that provide dedicated ER&D services is indicative of the robust growth in this segment.

Clinical research organisations (CROs) are planning to scale up their operations in the Asian region, especially in India, to tap the emerging opportunities of contract research from the US and European countries. According to Ferzaan Engineer, CEO of Quintiles India, "There is a slow geographical shift from the Western part of the world to Eastern regions in the clinical trial space due to the cost arbitrage, talent pool and huge patient population. So, many CROs are expanding their existing facilities to tap the opportunity."

Meanwhile, Prime Minister, Dr Manmohan Singh has given the approval to set up the National Innovation Council. The Council, to be headed by Mr Sam Pitroda, Adviser to the Prime Minister on Public Information Infrastructure and Innovations, will focus on preparing the road map for the decade of Innovation 2010-2020.

The government is examining a proposal to set up a venture capital fund for promoting drug discovery in the country. Earlier, the government had announced to set up an US$ 2.14 billion venture capital (VC) fund to finance drug discovery projects in India. The proposed funding of US$ 2.14 billion which includes substantial contribution from the private pharma industry under the public private partnership (PPP) model, is expected to provide favourable environment for drug innovation in the country and to make India a hub for new drug discoveries.

It is estimated that India spends around US$ 427.44 million every year on R&D activities. Out of this total expenditure, the government contributes US$ 107 million and the rest coming from the private sector.

Training & Education

According to an industry chamber study, the size of the education sector is expected to double to US$ 50 billion by 2015 with the rise in government expenditure along with an increase in middle-class income, according to the study. According to the report, the size of the education sector currently is pegged at US$ 25 billion, with higher education market estimated at US$ 15 billion. The government is planning to spend about five per cent of gross domestic product (GDP) in the next five years on education, as per the study.

The education sector in India is witnessing growth in private equity (PE) investment, according to HDFC. The company plans to foray into the sector, which according to Keki Mistry, Vice Chairman and Chief Executive Officer, HDFC, has touched US$ 190 million in 2010.

The education sector is also witnessing increase in hiring activities as per the employment indices of online job portals Naukri.com and Monster India. In the month of June 2010, the indices for Monster India and Naukri.com went up by 9 per cent and 10 per cent, respectively.

India was ranked number 4 on the list of the top 10 preferred destinations for B-school aspirants, according to the findings of a survey conducted by the Graduate Management Admission Council (GMAC).

Further, according to a worldwide survey of 'Universal Business Schools with major international influence,' conducted by French consulting firm SMBG amongst deans of 1000 business schools, the Indian Institute of Management Bangalore (IIM-B) has been ranked 24th while IIM-Ahmedabad ranked 55th.

Technical Education in India

Taking a step further, the government has approved the intended investment of US$ 519 million to initiate the second phase of the Technical Education Quality Improvement Programme (TEQIP).

Of the total project expenditure of US$ 519 million in the second phase, the World Bank will contribute US$ 298 million, the Centre's contribution according to 11th Five-Year Plan is US$ 106.8 million, while the states and private unaided institutions will invest US$ 110.7 million and US$ 3.42 million, respectively. The project will be open for competition and participation by all the engineering institutions approved by the AICTE.

The TEQIP scheme has been on since 2003, with World Bank's assistance. The scheme was envisaged as a long-term programme of about 10-12 years, to be implemented in three phases for transformation of the technical education system. The first phase of TEQIP ended on March 31, 2009, covering 127 institutions in 13 states.

The Orissa government has signed memoranda of understanding (MoUs) with eight mega industries for setting up quality Industrial Training Centres (ITCs) in the state in the first phase.

The Industries Association of Uttarakhand (IAU), an organisation of micro, small and medium enterprises (MSMEs), will soon sign a memorandum of understanding (MoU) with the University of Petroleum and Energy Studies. Under the MoU, IAU will organise workshops and conferences, and provide inputs from experts for curriculum development.

Foreign Institutes in India

Many overseas business schools have come to India seeking a big revenue boost, and a chance to understand the concerns of a developing economy. In order to regulate the operation and entry of foreign educational institutions in India, the government has introduced the Foreign Educational Institutions (Regulation of Entry and Operations) Bill, 2010, in the lower house of the Parliament on May 3, 2010. Earlier, the Bill was cleared by the Union Cabinet, which proposes to allow foreign education providers to establish campuses in the country and offer degrees as well.

• The Indian School of Business (ISB) has signed a Memorandum of Understanding (MoU) with The Fletcher School of Law & Diplomacy, Tufts University, US, to support the setting up of the Bharti Institute of Public Policy at the upcoming ISB campus in Mohali, Punjab.
• INSEAD, the business school headquartered in Fontainebleau, Paris, plans to offer a dedicated, 12 month programme in business management for mid to senior-level Indian executives, with about 10-15 years of work experience.
• University of the West of Scotland (UWS) has tied up with Punjab-based GGS Group of Colleges as its India partner, besides Hyderabad-based Jawaharlal Nehru Technological University (JNTU).
• Yale University has signed an agreement with two of India’s leading institutions, the Indian Institute of Management-Kozhikode (IIM-K) and the Indian Institute of Technology-Kanpur (IIT-K), to develop training programmes that will create academic leadership in the country.
• The University of Atlanta has announced the opening of its first study centre in Indian Subcontinent at Ahmedabad.
• Maastricht University (UM), based in The Netherlands, inaugurated the Maastricht Education and Research Centre (MERC), in Bangalore. A subsidiary of the Maastricht University, the MERC will foster academic collaboration with Indian institutions and conduct joint researches of social relevance in India.
• Ahmedabad-based Indus Institute of Technology and Engineering (IITE) has collaborated with Georgian college, a leading college in Canada, to provide a unique Advanced Diploma in Mechanical Engineering Technology — Automotive Manufacturing for Indian students
• "India will import about US$ 320 billion in electronics goods by 2015, from the present US$ 32 billion, which means there is huge demand and production gap…" according to Srikanth Jadchela, Chief Executive Officer, Synopsys Electronics Education and Research (Seer) Akademi.
• Infrastructure major GMR Group and Schulich School of Business of York University in Toronto, Canada, have entered into an understanding to develop a Schulich campus in Hyderabad.
• The Shipping Ministry has allocated US$ 65.9 million to the Indian Maritime University to create infrastructure facilities including academic complex, administrative building, library, hostels and residential accommodation over the next five years.

Global Footprints

Indian institutes are now collaborating and establishing offshore campuses in order to increase their global footprints.

• The Institute of Clinical Research India (ICRI), has entered into a strategic-cum-academic alliance with the Medical University of South Carolina (MUSC) to offer two new courses - Masters in Health Administration and Master of Science in Clinical Research will be offered through ICRI's six campuses in Delhi, Mumbai, Hyderabad, Ahmedabad, Dehradun and Bangalore, apart from its overseas campuses in Singapore and the UK.

E-Learning

Mr Kapil Sibal, Union Minister for Human Resource Development has announced government's plans to launch a scheme, which would bring in information, communication and technology (ICT) into elementary education. The scheme which is likely to be on the lines of the ICT scheme for higher education, would focus on the development of e-contents which would be used by students at primary and upper-primary classes for learning purposes.

The Minister has recently unveiled a US$ 35 low-cost computer in an attempt to revolutionise classroom education across the country. The device allows students to write and store text, browse the Internet and view videos, among other regular features.

Educomp Solutions has announced an agreement with China Distance Education Holdings Ltd (CDEL), a provider of online education in China, granting the latter exclusive rights to licence and distribute Educomp's products in China (excluding Hong Kong, Macau and Taiwan).

Training

The training industry in India is a sunrise industry with a lot of potential.

• IndiaCan Education Private Limited, a 50:50 joint venture with Educomp Solutions Limited and US-based Pearson Education, plans to open 250 centres across India by the end of this financial year. It aims at training over 500,000 persons annually and to make them 'ready-to-deploy' in the industry by 2012.
• "Currently with 50 centres, we plan a pan-India network of more than 600 vocational training centres in the next 12-18 months. Each centre can realistically enroll about 1,000 students," as per Srinath Venkatesh, Vice-President (sales, marketing and operations), IndiaCan
• Recently, Sharekhan and California-based Online Trading Academy have entered into a joint venture to provide trading and investing education in India.
• Core Projects and Technologies Ltd has signed an MoU with Gujarat Knowledge Society (GKS) to impart job-oriented skill upgradation courses to students from various disciplines in colleges across Ahmedabad and Surat districts.
• Tata Consultancy Services Ltd (TCS) is opening its first learning and development centre for its campus trainees. The new centre is equipped to train 6,000 professionals in a year.
• HCL Technologies Ltd has announced a tie-up with the business process outsourcing (BPO) training institute, Orion Edutech. As per the agreement, Orion will customise its Diploma in BPO Management (DIBM) to suit HCL's industry specific talent requirement.

Investments & Other Developments

The education sector is one of the thrust areas for investments as emphasis is being laid on revamping the systems through increasing investments.

According to the Kaizen Education Report released by Kaizen Mgmt Advisors, the pre-school segment is worth an estimated US$ 500 million currently and is expected to grow to US$ 1 billion in the next two years. Further, the segment is growing at a compounded annual rate (CAGR) of 30 per cent.

International university endowment funds have stepped up their presence in the Indian stock markets to cash in on the high returns. The number of such funds investing in India has increased from six in 2008 to around 20 in 2010, as per Securities and Exchange Board of India (SEBI) data.

• Sequoia Capital, the Indian arm of the US-based venture capital firm, has announced its second round of funding for US$ 5.54 million to K12 Techno Services Pvt Ltd, which runs 70 Gowtham Model School units in Andhra Pradesh.
• Edutor Technologies plans to raise US$ 3 million to expand its rural customer base for the launch of new content through its handheld learning device. The company has decided to tie up with Government schools to tap the rural market.
• Hewlett-Packard (HP) has announced its contribution of US$ 1 million—to the newly set up Education Innovation Challenge Fund for India—to support innovative initiatives in science, math and technology education among students and teachers in India.
• PE firm Mayfield India announced that it has invested US$ 8.73 million into Bharti's Centum Learning. According to Sanjeev Duggal, Chief Executive Officer and Executive Director, Centum Learning, they would need to invest close to US$ 21.83 million in the next two to three years in various activities as he observed that there are a lot of opportunities in M&A's in the vocational training space.
• Education has emerged one of the most lucrative sectors in India, making private equity investors line up in big numbers to the US$ 80-billion plus industry. Numbers crunched by education-focused private equity (PE) fund Kaizen Management Advisors presented that venture capitalists (VC) and PE players have pumped in excess of US$ 140 million so far this year, 50 per cent more than what they invested in 2009.
• Educomp Solutions Ltd, an integrated education company, has bought strategic stake in engineering test prep player Vidya Mandir Classes Pvt Ltd (VMC) for around US$ 7.34 million.
• Everonn Business Education Limited (EBEL), a Chennai-based education services firm, plans to open 500 Indigrow Institute of Professional Studies (IIPS) centres by 2015. The company would invest US$ 216,679 in each centre.
• Narsee Monjee Institute of Management Studies (NMIMS), a premium management education provider with centres in Mumbai, Shirpur and Bangalore, has begun operations from a new facility in Hyderabad and plans to set up an integrated campus with an outlay of US$ 22.59 million at Jedcherla.
• The second campus of the Indian School of Business (ISB) is coming up in Mohali. Mr Parkash Singh Badal, Chief Minister of Punjab, laid the foundation stone for the campus, which would start the first academic session in the city for the post graduate programme in management in April 2012.
• The Government plans to set up four new Indian Institute of Mass Communication (IIMCs) from the next academic year in Kerala, Jammu & Kashmir, Vidarbha in Maharashtra and Aizwal in Mizoram, as per Ms Ambika Soni, Union Minister for Information and Broadcasting.
• Regional planning body, North Eastern Council (NEC), will establish a para-medical institution for paramedical education in Nagaland.
• ISB, Hyderabad, has entered into an agreement with three top Asian B-schools to devise a strategy to attract more students from the US, Canada and Europe. Along with the Hong Kong University of Science & Technology (HKUST), China Europe International Business School (CEIBS), and Nanyang Technological University (NTU), ISB officials will jointly market the potential of studying management in Asia to Western students.
• The ninth Indian Institute of Management (IIM) at Ranchi was inaugurated on July 6, 2010 with 45 students. The institute would initially offer two-year post-graduate programme in management (PGPM).
• The Mudra Institute of Communications, Ahmedabad (MICA) has developed the country's first ever communications technology based business incubator - innovatively named as the Com-cubator. The major objectives of the com-cubator would be to develop, nurture, promote and successfully commercialise ventures based on innovative ideas and business models in the area of communications by incubating start ups created by enterprising individuals.
• The Ministry of Human Resource Development and the Unique Identification Authority of India inked a memorandum of understanding (MoU). The MoU would be helpful in tracking student's mobility by creating an electronic registry of all students, right from primary and elementary level to secondary and higher education.
• The Indian Institute of Technology-Madras (IIT-M) at Taramani - Chennai's hub for educational and research institutions - has set up first of the three planned buildings at the IIT-M Research Park.
• The Institute for Development and Research in Banking Technology (IDRBT), an institute under the Reserve Bank of India, has signed a memorandum of understanding (MoU) with the Indian Institute of Technology Kanpur (IITK) for collaboration in academic and research activities.
• IBM's global university relations programme which initially aimed at acquiring talent for the company will now focus on fostering innovations as well. The company works with about 100 engineering colleges across the country.
• Switzerland based Holcim Foundation has tied up with the Indian Institute of Technology Bombay (IIT B). The tie-up will be valid for three years and help students of the IIT B share their thoughts on sustainable construction by participating in international forums.

The Road Ahead

India at present requires about 50,000 clinical research professionals and 1,500 personnel in allied services such as clinical data management, biostatistics and medical welfare.

Besides, the government has also introduced three bills in the Parliament:

• The National Accreditation Regulatory Authority for Higher Educational Institutions Bill, 2010 postulates that every higher educational institution and every programme conducted by it should require accreditation in the manner provided in the proposed legislation.
• The Educational Tribunals Bill, 2010 provides for the establishment of the State Educational Tribunals and the National Education Tribunal. The National Education Tribunal would exercise power and authority over any dispute between a higher educational institution and any appropriate statutory regulatory body and all other matters pertaining to higher education.
• In yet another foray, India has allowed private-sector healthcare companies such as Fortis Healthcare, Max Healthcare and Apollo Hospitals to start medical colleges. Furthermore, India's cabinet approved a proposal to allow foreign universities to set up local campuses, part of long-standing plan to reform the education sector.

The National Development Council has approved setting up of 14 world-class universities for innovation across the 11th and 12th plan periods on the public private partnership model. The innovation universities are part of the ministry of human resource development's (MHRD) "brain gain" policy to attract global talent and will be set up under the eleventh plan (2007-12).

Further, the Government has agreed to spend US$ 675.90 million during the 11th Plan period for setting up 13 new Central universities and converting three existing State universities into Central universities.

Mr Kapil Sibal, Union Minister of Human Resource Development, plans to create a national vocational educational framework within one year.

Semiconductors

The Indian semiconductor industry is on a growth path driven by an upsurge in domestic sales. The main sectors driving semiconductor sales in India are telecom, automotive, industrial electronics and consumer electronics. The solar energy, renewable energy and automated healthcare services sectors too are beginning to boost demand and growth for semiconductor products.

The industry clocked a growth rate of 15.6 per cent last year – in comparison, the global market has shrunk by 11 per cent since 2008 – aided by the growth in demand for wireless handsets, low-priced notebooks and smart cards.

The semiconductor industry in India is expected to get a boost due to the increase in the domestic consumption of electronics hardware. The demand for electronics hardware in India is set to grow from $45 billion in 2009 to US$ 400 billion by 2020, according to industry estimates. Further, by 2013, the market size for nanotechnology-enabled products will be around US$ 1.6 trillion. Nanodevices and subsystems would make up 10 per cent of the industry by then.

According to Department of Information Technology, over US$ 2 billion worth of chip designs are being exported from India which is developed by nearly 20,000 Indian professionals.

According to Frost & Sullivan analysts, the semiconductor market growth is expected to be driven by products and services such as set-top boxes, wireless handsets, the 3G rollout, deployment of WiMAX, notebooks and smart cards. Opportunities exist for semiconductors in LCD TV, digital camera and storage flash memory markets. The market is expected to reach to US$ 8.04 billion by 2011.

As per the latest report by Gartner, Inc. the worldwide semiconductor revenue is predicted to touch US$ 300 billion in 2010, registering a growth of 31.5 per cent, as compared to US$ 228 billion in 2009. Analysts also expect that the worldwide semiconductor revenue would reach US$ 314 in 2011, growing at a rate 4.6 per cent from 2010. Further, the semiconductor capital equipment spending globally is expected to reach US$ 36.9 billion in 2010, a 122.1 per cent increase from 2009 spending of US$ 16.6 billion, according to Gartner.

Government Initiatives

The government’s Special Incentive Package Scheme (SIPS), aimed at galvanising investments in semiconductor fabs, ecosystem units and solar PV projects, has attracted 26 proposals, worth more than US$ 51.7 billion.

The scheme closed on March 31, 2010, three years after it was flagged off by the central government. The government has given an in-principle approval to 13 proposals. Most proposals received are to do with the production of solar PV cells and modules, while only a few applications are in the areas of wafer-fab or other eco-system units.

Under SIPS, the Centre is likely to provide incentive of 20 per cent capital expenditure during the first 10 years for the units in special economic zones (SEZs) and 25 per cent of the capital expenditure in non-SEZ units. Any unit can claim incentives in the form of capital subsidy or equity participation.

In the first week of February 2010, Karnataka announced a comprehensive semiconductor policy aimed at attracting electronics and hardware companies to the state. The policy has promised sops and financial assistance by the state government to companies in the electronics systems and semiconductor space.

As per the policy, the state has made an additional provision of US$ 5.4 million towards a 26 per cent contribution to a fund for raising money from the market to assist start-up semiconductor units engaged in design and embedded software. The state has committed to set up ‘Karnataka Fund for Semiconductor Excellence’ with a corpus of US$ 2.14 million to encourage research and development (R&D) in chip design.

Moreover, to encourage semiconductor assembly, testing, marking and packing process (ATMP) units, the state government will provide incentives to such units in the state by lowering the threshold investment for ATMPs to US$ 85.7 million from the present US$ 214.3 million.

Public-Private Partnerships

Most of the top global semiconductor companies have set up their chip design centres in India. With the introduction of SIPS, it is expected that chip manufacturing may start in the near future. This would lead to the establishment of complete manufacturing environment in this sector in the country.

Of the 26 proposals received by the Department of Information Technology under SIPS, 13 have received in-principle approval. These include Titan Energy Systems, Reliance Industries, Tata BP Solar Power, PV Technologies India (a subsidiary of Moser Baer), KSK Surya PV Ventures, Signet Solar, Indo-Solar Ltd, Solar Semiconductors, TF SolarPower, Lanco Solar Pvt Ltd, EPV Solar and Bhaskar Silicon.

The India Semiconductor Association (ISA) in September 2009 signed a memorandum of understanding (MoU) with UK Trade and Investment to develop and encourage business ties and technology exchange between the semiconductor industries in both countries. The agreement means that Indian and UK firms will be working together on agreed business opportunity areas, combining complementary know-how, technology, IP and other capabilities.

Furthermore, the Centre for Railway Information Systems (CRIS) is going to use the microcontroller-based chip technology developed by NXP Semiconductors to power contact-less smart cards for automatic fare collection using Automatic Ticket Vending Machines (ATVMs) across various cities.

Other Developments

California-based Microsemi Corporation has unveiled its new 65 nanometer embedded Flash technology. The Hyderabad research and development (R&D) unit of Actel, now a part of Microsemi, had contributed significantly to the development of the new technology platform.

Solar Semiconductor Private Limited, a Hyderabad based manufacturer of solar photovoltaic (PV) modules and system integrators, has entered into a strategic partnership with Sonepar, a distributor of electronic and solar PV products in Canada and worldwide.