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India’s ER&D sector likely to generate over $100 billion in revenue by 2030: Nasscom

02 Sep 2026 Evaluate

IT industry body Nasscom, in its report titled 'Physical AI Redefining ER&D opportunity for India’, has said that India’s engineering research and development (ER&D) sector is expected to generate more than $100 billion in revenue by 2030, driven by the integration of Artificial Intelligence (AI) into core engineering workflows. The sector, which is projected to generate $63 billion in revenue in FY26, is witnessing a significant shift as engineering becomes increasingly software-defined, data-driven and intelligent.

It suggests that demand will evolve in three waves. The first wave will see the scaling of intelligent products and operations, connected equipment and predictive maintenance. This will be followed by a surge in simulation, virtual engineering and intelligent manufacturing as companies move from experimentation to production. In the long term, it expects autonomous systems to emerge as the largest opportunity as barriers related to safety, reliability, compute, and real-world deployment are progressively addressed. 

The shift is also expected to unlock new revenue streams beyond traditional services, including AI-as-a-Service (AIaaS), Robotics-as-a-Service (RaaS), leasing models and agentic deployments. Besides, it highlighted that India is well-positioned to emerge as a key engineering hub for the global market, building on its existing strengths in AI, embedded systems, automotive and industrial ER&D, simulation and data engineering.

Nasscom President Rajesh Nambiar said ‘India's ER&D growth will be shaped by how effectively we combine our engineering depth with AI to take on greater ownership of global product development’. He added ‘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.’


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