India targets $225bn offshore engineering market

Indian IT companies are targeting a $225bn market in engineering services as the next big driver of growth for the offshore outsourcing industry.

Worldwide spend on engineering services is predicted to grow from $750m in 2004 to $1tr by 2020, according to a report by Indian IT trade body Nasscom and Booz Allen Hamilton called Globalisation of engineering services - the next frontier for India.

Of that total $1tr spend, around $150bn to $225bn is expected to be on offshore engineering services and India claims it is in a position to claim a quarter - about $40bn - of that market.

Last year India had a relatively small 12 per cent share of the $10bn to $15bn offshore engineering services market.

Kevin Dehoff, VP at Booz Allen Hamilton, said in the report: "The demand for engineering talent is growing, and emerging market countries such as India will play a vital role in expanding capacity. Companies will increasingly create competitive advantage by accessing and building core innovation capabilities in a world-class global network."

B Ramalinga Ragju, chairman of Nasscom and founder and chairman of Satyam, said significant investment in infrastructure, workforce and expertise by the private sector, government and academic institutions will be needed if India is to tap into the offshore engineering services market.

Speaking at an event earlier this week, Phiroz Vandrevala, executive VP at Tata Consultancy Services, said healthcare and pharmaceutical services will also be the next big areas of growth for the offshore industry in India.