Tuesday, April 11, 2006

The World is Flat---India Flattered

India Emerging As Engg hot Spot For Global Firms

Potential for outsourced services estimated around $10 b-12 b Among the global firms that have set up base here, UK's Rolls-Royce Group Plc has already established a wholly-owned subsidiary in the country to manage the growing volume of engineering work that it is sub-contracting to India. New Delhi , April 9 The growing shortage of core-sector engineers across the globe has international firms flocking to tap Indian civil and mechanical engineering skills. India, which had nearly four lakh engineers graduate in 2005 as against just 70,000 passing put in the US, is seeing jobs of transactional engineers coming in, especially in the core infrastructure sectors. While engineering work currently being executed by India-based vendors is estimated to be around $500 million, analysts estimate the market potential for outsourced engineering services is estimated to be around $10 billion-$12 billion. Overseas consultancy Besides the engineering outsourcing pioneers such as L&T, Thermax, Mahindra and Hero Global Design, firms such as NTPC Ltd and Power Grid Corporation India Ltd (PGCIL) are now betting big on overseas consultancy assignments. NTPC is offering training to power engineers of Aluminium Bahrain and technical personnel of Oman Refinery Company at its facilities here and has deputed shift engineers to power stations in Nigeria in lieu of sizeable consultancy charges. PGCIL is in the process of roping in retired engineers on a contractual basis to execute projects at home as it is putting several of its regular engineers on overseas consultancy assignments due to the huge demand for heavy engineering skills abroad. The India subsidiary of the US-based Quality Engineering and Software Technologies (QuEST), which employs around 700 engineers in Bangalore, is executing direct engineering work packages and sub-contracting projects from India for clients abroad, including several Fortune 500 firms. The company offers concept design to drafting and modelling, to analysis and product realisation solutions in sectors such as aerospace, automotive engineering, energy, industrial products and the petroleum domain. Among the global firms that have set up base here, UK's Rolls-Royce Group Plc has already established a wholly owned subsidiary in the country to manage the growing volume of engineering work that it is sub-contracting to India. Based in Bangalore, Rolls-Royce Operations India Pvt Ltd would tap domestic engineering analysis and design capability skills in developing aero-engineering solutions. Analysts predict that the country is also set to get a bigger piece of the auto offshoring business. According to an AT Kearney online survey of American Automotive Executives, India leads the outsourcing market when it comes to auto-outsourcing with 24 per cent of auto manufacturers giving it the thumbs-up for outsourcing, much higher than those favouring China, Mexico and the Philippines. Eicher Motors has also forayed into engineering services outsourcing with the acquisition of the US-based company Design Intent Engineering (DIE) and the company expects new business to contribute revenue to the tune of $100 million in the next four years.

1 comment:

Soma said...

A sweet "estimate" :) to read!! If you look in further deep it's 500 million thing as of now and we do not know when it's going to be 10-12b$. By the time the entire engineering services reaches the estimated amount, we should be seeing atleast 5 of our top IT giants sitting with 10b$ revenue each with atleast one million employees put together. No I don't mean to discourage these developments in other industries but just trying to tell the wide gap already there between IT and other services as for as outsourcing in concerned. It's better for India to move in every Industry as we have the talent pool to satisfy the global needs but be very aggressive in IT outsourcing.