India’s Engineering R&D Revenue Projected to Cross $100 Billion by 2030, Says Nasscom

India’s engineering research and development (ER&D) sector is projected to surpass $100 billion in revenue by 2030, according to data released by IT industry body Nasscom on Tuesday. The sector, which is estimated to generate $63 billion in revenue in FY26, is experiencing a structural shift as engineering processes become increasingly software-defined, data-driven, and intelligent.

Global ER&D spending is projected to reach between $2.48 trillion and $2.50 trillion by 2030, growing at a compound annual growth rate (CAGR) of 8 to 9 percent between calendar year 2024 and calendar year 2030. Nasscom noted that technological disruption and an increased focus on innovation and value are generating new areas of demand for Indian service providers.

Nasscom outlined its projections in a report titled 'Physical AI – Redefining ER&D opportunity for India'. The findings suggest that market demand will evolve in three distinct phases.

In the first wave, the market will focus on scaling intelligent products and operations, connected equipment, and predictive maintenance. This initial phase will be followed by a surge in simulation, virtual engineering, and intelligent manufacturing as companies transition from experimentation to full-scale production.

Over the longer term, Nasscom expects autonomous systems to emerge as the largest opportunity. This growth will occur as barriers related to safety, reliability, compute availability, and real-world deployment are progressively addressed.

This ongoing shift is also projected to unlock new revenue streams outside traditional services. These alternative models include AI-as-a-Service (AIaaS), Robotics-as-a-Service (RaaS), leasing models, and agentic deployments.

Nasscom highlighted that India is well-positioned to serve as a critical engineering layer for the global market. The country can leverage its existing strengths in AI, embedded systems, automotive and industrial ER&D, simulation, and data engineering.

However, realizing this potential will require a deliberate focus on developing cross-disciplinary talent, establishing strategic ecosystem partnerships, and creating domain-specific models to translate real-world data into system improvements.

Nasscom President Rajesh Nambiar stated that India’s ER&D growth will be shaped by how effectively the industry combines its engineering depth with AI to take on greater ownership of global product development.

“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. The opportunity now is to move further towards systems-led engineering and co-creation of intelligent products and platforms,” Nambiar added.

"The projection of India's ER&D sector crossing $100 billion by 2030 underscores a fundamental shift in our technology ecosystem from service delivery to core product co-creation. As global engineering spending moves toward software-defined and AI-driven models, Indian startups and tech firms must focus on building cross-disciplinary talent and domain-specific models. This transition into Physical AI and autonomous systems creates substantial opportunities for agile enterprises to capture higher-value segments of the global product lifecycle." — Dr. Shishir Gupta, Founder & CEO, StartupLanes