Currently pegged at $3.5 billion, outsourcing in engineering services has the potential to grow to $10-$20 billion in three to five years.

India provides outsourced services in the areas of automotive design, aerospace design, construction, industrial machinery and products, pharmaceuticals, semi-conductor work and much more.

However, Infotech Enterprises chairman and MD BVR Mohan Reddy says that the country should focus more on its strengths like construction and industrial machinery. "Even though these are smaller markets, our success here is ensured and this will help us to grow the overall marketplace," he said at the Nasscom summit here on Thursday.

Unlike information technology (IT), engineering services requires specific domain knowledge (for eg, aeronautical engineering) and experienced people rather than fresh graduate engineers. Unlike IT and ITeS where data security is the primary concern, this industry is dominated by concerns on intellectual property.

Also speaking at the forum, Neilsoft founder and MD Ketan Bakshi said that engineering services now has an identity of its own and Nasscom could now look at taking the industry overseas like it has done with Indian IT and ITeS.

"The challenge within India is to create partnerships to go beyond CAD/CAM and set up laboratories to do specific work. Instead of becoming programmers, the engineering talent in India should look at remaining within their disciplines," he said.

DaimlerChrysler India MD and CEO Wilfried Aulbur added, "The development of a strong local presence by local companies is also helping to increase the expertise within the country." DaimlerChrysler Research Center (DMRC) in Bangalore undertakes research in the areas of encryption, image signal processing, telematics, fuel-cell modeling, CAD, CAM, CAE and PDM for the company's global requirements. The company recently awarded a CAE contract to Tata Consultancy Services (TCS).

Also speaking at the forum, TCS vice president (industrial and engineering services) Ravi Gopinath said, "There is a need for fostering education and research programmes that can link back into the provisioning of engineering services."