Emerging Trends
Literature Review
182
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Aerospace
Auto industry
Pharma and biotechnology
Machinery and equipment
Chemicals
Electronic components
Engines and turbines
Services
Metals and minerals
Software and IT
Others
Total
2003
0.02
0.08
0.04
0.11
0.03
0.33
0.02
0.009
0.03
1.43
0.09
2.19
2004
0.12
0.12
0.15
0.37
0.08
2.21
0.13
3.18
2005
0.45
0.13
0.01
0.05
0.02
2.12
0.04
2.86
2006
2007
2008
2009
Total
3.25
0.47
1.11
0.18
0.02
0.03
0.02
0.009
0.13
4.96
0.15
10.33
0.02
0.66
0.31
0.20
0.22
0.03
0.02
0.09
0.02
1.70
0.03
3.30
0.23
0.59
0.43
0.10
0.02
0.15
0.01
0.03
0.01
1.74
0.20
3.51
0.10
0.76
0.35
3.62
2.68
2.81
0.87
0.36
0.74
0.10
0.76
0.34
14.56
2.03
28.91
0.06
0.15
0.03
0.23
0.07
0.40
1.39
3.54
vol xlix no 30
NOTES
Figure 1: Real GDP Growth during 2000-12
12
GDP
Services
12
8
8
Industry
4
4
200405
GDP
2000-01
4.35
2001-02
5.81
2002-03
3.84
2003-04
8.52
2004-05
7.60
2005-06
9.49
2006-07
9.60
200809
2009- 201010
11
0
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
201112
2007-08
9.30
2008-09
6.70
2009-10
8.40
2010-11
8.39
2011-12
6.88
Our preliminary analysis on the quantum of FDI inflow shows that roughly
70% of it in R&D has come mainly in
three sectors (Table 4). These are IT,
followed by pharma/biotech, and the
automotive sector. The majority of FDI
inflow into R&D was in Bangalore,
Hyderabad, Chennai, Mumbai/Pune,
and Delhi/National Capital Region
(NCR), which accounted for 88% of
the inflow in these sectors. During
the six years from 2003 to 2009, of a
total 706 MNCs investing in R&D in
India, 560 were in these three sectors,
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
Sector
Industry
Services
7.1
7.4
9.4
9.7
12.2
9.7
4.4
8.4
7.2
3.9
7.5
8.5
9.4
10.9
10.1
10.3
10.0
10.5
9.3
9.4
706
560
495
69.47%
88%
Bangalore was the most favoured destination for FDI in R&D with investments
from 186 MNCs, and it also benefited
from the highest investments and the
Table 5: Magnitude of the Inflow of FDI in R&D in Select Sectors and Clusters
Sectors
% of MNCs
In Sector Sector in Clusters
Software/IT
Pharmaceuticals/biotech
Automotive
Percentage of the total
63.46
12.18
3.68
79.32
55.94
10.62
3.54
70.11
% of FDI in R&D
In Sector
Sector in Clusters
50.30
9.23
9.85
69.38
44.50
8.75
9.82
63.07
% of Jobs Created
In Sector
Sector in Clusters
74.17
3.31
5.29
82.77
66.52
2.89
5.28
74.69
vol xlix no 30
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NOTES
Bangalore
Mumbai
Delhi
Chennai
Hyderabad
Number of
MNCs
Investment
($ millions)
186
60
36
44
69
395
5,214.093
1,594.4
3,092.834
1,219.964
1,885.73
13,007.02
Jobs
71,956
14,976
30,144
23,068
24,452
164,596
1 billion-50
(Tier I)
49-20
(Tier II)
Less than 20
(Tier III)
Total
Number of
Firms
45
(11.39)
95
(24)
255
(64.55)
395
Investments
Jobs
Created
8,225.66
88,908
(63.24)
(54)
2,650.90
35,954
(20.38)
(21.84)
2,130.46
39,734
(16.37)
(24.14)
13,007.02 1,64,596
Tier I (45)
33
Tier II (95)
51
Tier III (255) 97
Total*
181
16
10
8
34
11
30
100
141
5
5
28
38
0
0
0
0
0
0
8
8
0
6
8
14
Centres in
Partnership
with Indian
Institutions
Acquiring
Indian
Firms
9
2
3
14
1
3
2
6
* The sum of all columns may not correspond with the total in column 1 as a firm may be represented in more than one column.
Source: CSIR-NISTADS-TIFAC study 2011.
Economic & Political Weekly
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vol xlix no 30
Microsoft Corporation
ST Microelectronics
Oracle International
Cisco Technology
Hewlett-Packard Development
Yahoo
Motorola
Intel
Sun Microsystems
274
200
173
107
104
65
51
43
43
61
142
31
106
66
15
23
100
52
185
NOTES
Bangalore
Mumbai/Pune
Delhi/NCR
Chennai
Hyderabad
Number of
MNCs
20
21
4
7
23
75
Investment
($ Millions)
375.68
1,560.373
61.03
11.762
547.881
2,556.723
Jobs
1,232
4,362
181
92
1,284
7,151
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NOTES
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vol xlix no 30
NOTES
Cluster
Number of
MNCs
Investment Range
(in $ Million)
8
8
5
3
1
25
1,475.78
344.48
381.29
226
443.5
2,871.05
Bangalore
Mumbai/Pune
Delhi
Chennai
Hyderabad
Jobs
7,195
1,041
1,170
778
2,892
3,076
6,000
4,000
2,000
0
Mumbai/Pune
Delhi/NCR
500-50
15
(60)
5
(20)
5
(20)
25
49-20
Less than 20
Bangalore
Jobs Created
2,700.15
(94.04)
161.6
(5.62)
9.3
(0.32)
2,871.05
12,369
(94.59)
642
(4.90)
65
(0.49)
13,076
Table 15: Typology of the Nature of R&D FDI Inflow Automotive Sector
Research
Firms Development Technical
Contract
Contract
Centres in
Engineering with More Centre a Part Support and
Research
Research to Partnership
and Design than One
of the
Testing
Organisations Indian Firms/ with Indian
Centres
Centre
Set-up
Centre
Institutions
Firms
Centres in
Partnership
with Indian
Institutions
Acquiring
Indian
Firms
Tier I (15)
12
Tier II (5)
19
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NOTES
Bangalore
186 (47)
20(26)
8(32)
214
Mumbai/Pune
60 (15.18)
21 (28)
8 (32)
89
Delhi/NCR
36 (9.11)
4 (5.33)
5 (6.66)
45
Chennai
44(11.13)
7(9.33)
3 (4)
54
Hyderabad
69 (17.50)
23 (30.66)
1(1.33)
93
Total
395
75
25
495
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vol xlix no 30
NOTES
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