India's engineering R&D sector set to exceed $100 billion by 2030

The engineering R&D services sector in India is undergoing a fundamental transformation as organisations increasingly adopt AI-powered solutions and data-driven methodologies across their workflows. Currently valued at an estimated $63 billion in FY26, the sector is projected to more than double within the next four years, reflecting accelerating global demand for innovation-focused engineering services.

Global spending on engineering research and development is forecast to reach $2.48 trillion by 2030, expanding at a compound annual growth rate of 8.9 per cent between 2024 and 2030. This expansion creates significant opportunities for India's service providers, who are well-positioned to capture growing international demand for specialised technical expertise.

The shift towards intelligent, software-defined engineering is reshaping market dynamics and creating new areas of demand for Indian firms. According to Nasscom's report titled 'Physical AI: Redefining ER&D Opportunity for India', the evolution of demand will unfold across multiple waves, with technological disruption and emphasis on innovation driving competitive advantage in the sector.

India's engineering services industry has established itself as a critical player in global ER&D ecosystems, leveraging technical talent and cost-competitive delivery models. The projected growth to triple digits reflects broader trends in how multinational corporations are organising their research and development operations amid rapid technological change.