New Delhi August 28, 2008:  A study by CyberMedia group's flagship IT magazine, Dataquest says that driven by the offset requirements of India's defense purchase and the country's enhanced profile as an engineering base after the launch of Nano, engineering services outsourcing to India will accelerate

The engineering services exports (excluding software product engineering, semiconductor design, and other high tech/telecom engineering) from India grew 25.6% in 2007-08 to reach Rs. 10,110 crore, according to a study published by Dataquest, the flagship IT publication of CyberMedia group. The Indian third party service providers accounted for 56% of that revenue, while the captives had a share of 41%. The non-Indian third party service providers accounted for the rest.

Aerospace and automotive industries led the engineering design and services outsourcing to India. A few recent developments in these industries have significantly impacted the engineering services outsourcing, says the Dataquest study. Some of these include: high oil prices leading to design of newer fuel-efficient cars, India's plans to buy 100 plus fighter aircrafts with significant offset requirements (which stipulates that 50% of the total contract value to any supplier will have to be spent locally), and the launch of Tata Motor's Nano, which has raised the profile of India as an automotive engineering base.

"All these developments have significantly enhanced the action in the engineering services outsourcing area. They have paved the way for the revenues to start flowing in beginning this year when we can expect the growth to accelerate sharply," said Shyamanuja Das, Editor, Dataquest, who led the research.

The study also outlines that India's own market as a major automotive market has drawn many of the automotive manufacturers and their tier one OEM suppliers to India. Most of them have also used the opportunity to tap India's engineering talent. Car manufacturers such as Ford, GM, Chrysler Honda, and Volkswagen and their suppliers such asDelphi, Eaton, and Visteon have all set up engineering design centers in India.

Top Players
The top 15 firms account for 93% of the total engineering services exported by the India-based engineering services firms.India's top IT services firm, TCS, leads the list, followed by HCL and Satyam. The list itself is a mix of three types of players — the broad-based IT services firms such as TCS, HCL, Satyam, Infosys, and Wipro; the specialized players such as Infotech Enterprise, Quest, Geometric and Neilsoft; and the design arms of Indian engineering companies such as Tata Technologies, Mahindra Engineering Services and L&T Infotech.

Top 15 Engineering Services Exporters (Excluding IT/Telecom)

* Dataquest estimates for exports revenues
Source: Dataquest Review of the Indian IT Industry Volume 2

About CyberMedia
CyberMedia is South Asia's first and largest specialty media house, with 15 publications (including Dataquest, PCQuest, Voice&Data, BioSpectrum (India & Asia), Living Digital, Global Services, DQ Channels, DQ Week, Voice&Data Connect, Dare and Halsbury's Law Monthly) in the infotech, telecom, consumer electronics and Biotech areas, and is media value chain including the Internet (www.ciol.com), events and television. The group's media services include market research (IDC India), content management, multi-media and media education.

CyberMedia has recently tied up with MIT to launch conference and publication for Emerging Technologies in India.

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