Why the next phase of India’s engineering story can’t be about cost

Drive through Gothenburg, on Sweden’s west coast, and you would not guess you are standing in one of India’s most important engineering outposts. Yet over the last decade, around 2,000 people now work there for Indian companies like Tata Technologies, Infosys, KPIT and others, sitting shoulder to shoulder with Volvo and the European auto industry. When Prime Minister Narendra Modi met Sweden’s Prime Minister Ulf Kristersson and the European Commission President Ursula von der Leyen this year, they did it in Gothenburg, not Stockholm.

That choice says something. Indian engineering is no longer something Europeans buy from a distance. It is something Europe now builds with, in its own backyard.

I find this more telling than any market-size chart. And there are plenty of charts: India’s ER&D services from $33 billion in 2019 are on track to cross $100 billion in exports by 2030, and nearly half of our recent tech-export growth has been R&D-led. But the number I care about is harder to put on a document. It is the share of the world’s complex products including cars, medical devices, aircraft systems, and power grids that simply would not run without an Indian engineer somewhere in the loop, year after year.

That is the shift most people miss. For 30 years the story about India was mainly about cost and labour. That story is much stronger with the additional propositions of innovation and speed. The value produced by engineering itself has changed. Today a car is a computer on wheels that gets software updates for 10 years. A medical device sends data back from the field. A wind turbine is monitored and re-tuned remotely from the other side of the planet. R&D has become an irreplaceable decade-long act of stewardship that keeps a system coherent, safe, and compliant long after the launch party is over.

This is where India has quietly become indispensable, because that kind of work rewards exactly what we have: depth, continuity, and teams that stay with a platform across its whole life. Toshiaki Nomura, President and CEO of Canon India, had said recently that the country’s demands are so unique and its users so resourceful that Japanese engineers are now flying into Indian cities to see their own machines in a new light. That is the kind of value Indian ER&D adds to the world.

Let me make this concrete, because innovation is a word that has been worn smooth from overuse.

When a healthcare client wanted a smart contact lens to detect glaucoma, the hard part was powering a sensor and a radio inside something that sits on your eye. Cyient, in India, designed a custom chip that digitised the sensor data and ran on power beamed in over a radio link, a continuous, non-invasive monitoring of pressure inside the eye. That is not low-cost labour. That is frontier semiconductor work.

Similarly, when a global energy firm was losing money to wind-turbine drivetrains failing in the field, an Indian team built a digital twin; a live virtual replica fed by sensor data that found the root cause and cut downtime by about a fifth and warranty costs by nearly a third. There are several of these innovation case studies born out of Indian centres for global multinationals across auto, semiconductor, agentic AI for enterprises, and healthcare. For example, Samsung’s Galaxy AI was developed at the company’s R&D centre in India. This marked the first use of AI in smartphones. KPIT designed and architecturally engineered a software defined vehicle for an international OEM company and is currently developing AiDV. Wipro has developed an agentic AI for semiconductor design. HCLTech has developed the first myocardial protection system of its kind for coronary bypass surgery.

So here is the part I most want enterprise leaders to hear. We are good at this. But we need to be bold enough at it. India’s strength has been built largely on services for over decades. The next decade belongs to IP, platform, products. And on that front, we are still under-investing as a country, especially compared with economies that decided innovation was a national project. China did not become a hardware power by accident; its enterprises pour money into R&D at a level we have not matched.

The government has done its part. The India Semiconductor Mission, the National Quantum Mission, the AI programmes are real and welcome. The decisive investment has to come from enterprises themselves. When a global company sets up a GCC in India to build R&D capability, it is making a clear bet on India’s innovation depth, talent and long-term value creation. We need many more enterprises, Indian and global, to make that bet. Enterprises need to align on key execution imperatives.

· India based teams must be elevated from project delivery to strategic product ownership.

· IP and platform development must become more deeply institutionalised in India.

· Companies must invest in frontier technology programmes across software defined vehicles, AI native systems, quantum engineering, robotics and other emerging areas.

· And lastly, success must be tracked through outcome metrics: patents, commercial launches, platform scalability

This will also require a shift in how the industry creates and captures value. We have to move beyond models that measure effort only through time and headcount, and increasingly price work by the outcomes it delivers, with risk shared and value shared. And we have to invest ahead of demand in the skills the next wave needs: AI safety, quantum, robotics and advanced engineering.

I am an optimist about this, and I will say plainly why. The world will always need human ingenuity, and that is the one thing India has never lacked. AI raises the bar on engineering rather than removing it, and we have cleared rising bars before. What worries me is complacency. The opening is here now; it won't wait for us.

(The author is Vice Chairperson, Nasscom, and Co-founder, CEO & MD, KPIT Technologies. Views are personal.)