India’s Engineering Services Enter a New Era of Global Growth

India’s engineering services industry is emerging as a major pillar of the country’s expanding services economy, with exports recording a remarkable rise over the past decade. Engineering services exports increased from $1.77 billion in 2014-15 to $13.77 billion in 2024-25, representing almost an eightfold increase and a compound annual growth rate of around 22.8%, according to data cited in a recent NITI Aayog report.

The scale of this expansion highlights a significant change in the way India participates in the global economy. Indian engineering capabilities are increasingly being used for sophisticated activities such as engineering design, product development, research and development, digital engineering, testing and technical consultancy. The country is gradually moving beyond its traditional reputation as a cost-effective outsourcing destination and establishing itself as a centre for high-value engineering and innovation.

One of the strongest indicators of this transformation is the limited growth in engineering services imports compared with exports. While exports expanded dramatically during the decade, imports rose only marginally, from around $1.59 billion in 2014-15 to $1.73 billion in 2024-25. The widening difference demonstrates India’s growing ability to develop and deliver engineering capabilities for international markets from within the country.

The expansion is being supported by India’s large pool of technically qualified professionals. Engineering continues to account for a substantial share of technical education in the country, providing companies with access to a broad base of engineers and technology specialists. Increasing expertise in artificial intelligence, cloud technologies, embedded systems, automation, electronics and advanced manufacturing is further improving the competitiveness of Indian engineering services.

The rapid development of Global Capability Centres (GCCs) is another important driver. Multinational companies are increasingly establishing engineering and R&D operations in India, using these centres not merely for support functions but for product development, innovation and complex technical work. Their activities now extend across sectors such as automotive, aerospace, electronics, semiconductors, telecommunications, energy and medical technology.

India’s engineering story is also reflected in merchandise trade. Engineering goods exports reached a record $122.43 billion in FY2025-26, accounting for about 27.7% of India’s total merchandise exports, according to EEPC India. This demonstrates the increasing importance of engineering not only as a professional service but also as a major contributor to India’s manufacturing and export economy.

The growth has continued despite an increasingly challenging global trade environment. Recent trade data has shown strong momentum in engineering exports, with demand from important markets including the United States and China contributing to the expansion. This diversification of markets is particularly important as Indian companies seek to reduce dependence on individual economies and build more resilient international supply chains.

The next phase of growth, however, will depend on India’s ability to move further towards specialised and knowledge-intensive engineering. Greater investment in research and development, advanced technical education, intellectual property, professional training and emerging technologies will be essential. Companies that can combine engineering expertise with artificial intelligence, robotics, semiconductor technologies, electric mobility and digital manufacturing are likely to have a particularly strong competitive advantage.

Professional regulation is also becoming an important part of the discussion. NITI Aayog has highlighted the need for a stronger statutory framework for engineers, particularly those involved in construction and infrastructure. Clearer professional standards, ethical guidelines and accountability mechanisms could strengthen the quality and credibility of Indian engineering services, particularly in projects where engineering decisions have direct implications for public safety.

The growing GCC ecosystem could provide another major opportunity. As multinational corporations increasingly transfer higher-value engineering and innovation functions to India, the country has the potential to become an integral part of global product-development and research networks rather than simply a provider of outsourced technical services.

India’s nearly eightfold growth in engineering services exports therefore represents a broader structural shift in the economy. The country is building the capabilities to compete internationally on knowledge, engineering expertise and innovation. With continued investment in talent, technology, research and professional standards, India is well positioned to strengthen its role as a global engineering and technology hub in the coming decade.