New Delhi [India], September 1 (ANI): India's engineering research and development (ER&D) services revenue is projected to cross USD 100 billion by 2030, driven by growing use of artificial intelligence across product development, testing and engineering processes, according to Nasscom.
India's ER&D services industry is estimated to have generated revenue of USD 63 billion in FY26. At the global level, ER&D spending is projected to reach USD 2.48-2.50 trillion by 2030, growing at an annual rate of 8-9 per cent between 2024 and 2030, Nasscom said in a release on its study on Physical AI.
Rajesh Nambiar, President, Nasscom, said India's future growth in the sector will depend on combining its existing engineering capabilities with artificial intelligence.
"India's ER&D growth will be shaped by how effectively we combine our engineering depth with AI to take on greater ownership of global product development," Nambiar said.
The industry body said AI is increasingly becoming part of core engineering processes, including software development, simulation, testing and systems engineering. This could allow Indian ER&D companies to take on a larger role in global product development rather than remaining limited to traditional engineering work.
Nasscom's study, titled Physical AI - Redefining ER&D opportunity for India, also identified Physical AI as an important new growth area for the sector. Physical AI refers to the use of artificial intelligence in areas such as robotics, autonomous systems, intelligent products and industrial environments.
According to the study, demand is likely to develop in stages. Intelligent products and operations, including embedded AI, connected equipment, predictive maintenance and intelligent inspection, are expected to grow first.
This could be followed by greater use of simulation, virtual engineering and intelligent manufacturing as companies move AI projects from testing to actual production. Over the longer term, Nasscom said autonomous systems could emerge as the largest opportunity as challenges related to safety, reliability, computing requirements and real-world deployment are addressed.
"Physical AI adds an important new dimension to this opportunity. India has the engineering talent, domain expertise and scale to play a much larger role across this lifecycle," Nambiar said.
Nasscom said Indian ER&D companies can build on the country's capabilities in AI, embedded systems, automotive and industrial engineering, simulation and data engineering.
Physical AI could also open new sources of revenue for ER&D companies beyond traditional engineering services, including AI-as-a-Service, Robotics-as-a-Service, leasing models, autonomous platforms and agentic deployments.
"The opportunity now is to move further towards systems-led engineering and co-creation of intelligent products and platforms," Nambiar said.
The study said tapping this opportunity will require companies to build skills across different engineering disciplines, develop partnerships around technology platforms and ecosystems, and create industry-specific AI models. (ANI)
India's engineering R&D services revenue to cross USD 100 billion by 2030: Nasscom
