Motorola's two research and development facilities in India helped produce a sub-$40 cellular phone for emerging markets. Microsoft in January launched its third international research center in India. Intel has 800 India-based engineers working on software and hardware designs for its communication and semiconductor product lines. Other U.S. companies are designing everything from auto parts to consumer electronics in India through outsourcing or setting up their own facilities in areas such as Bangalore, India's Silicon Valley.
All these efforts and more represent just the beginning of advanced research and development in India. If R&D in India were a three-act play, advanced development for products would be in the first act. Basic research, the software engineering and development to support other labs, is probably in the second act, according to experts. "More than 150 international companies are doing R&D in India," noted Arun Shourie, a former minister for privatization in the Indian government at a conference of Indian Institute of Technology alumni held in Washington, D.C., in May. As the number of companies from the U.S. and Europe moving R&D operations to India rises, hopes are high that the third act will be a grand finale that potentially could turn the country into an R&D powerhouse.
"All the leading pharmaceutical companies have set up research operations in India," notes Harbir Singh, a management professor at Wharton. "These companies have realized that India is not just a location where you conduct clinical trials; you can also do basic research. R&D in India isn't just about low-end work." Singh believes that the movement of global R&D into India is still in its early stages, but will expand over time. "Indian firms are starting to realize that they must become innovators," he says. "Their capital outlays are lower than those of their counterparts in the U.
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