BANGALORE, Aug 3: India's premier software body said on Thursday outsourcing of engineering services by global firms presented the country with a $40-billion opportunity.

The National Association of Software and Service Companies in a report said global companies spent $750 billion on engineering services in 2004 and forecast it would grow to $1.1 trillion by 2020.

While in the financial year to March 2005 only between $10 and 15 billion of engineering services were off-shored, the market was expected to grow to between $150 and 225 billion by 2020, it said.

The report, “Globalisation of Engineering Services: the Next Frontier for India”, was prepared with management consulting firm, Booz Allen Hamilton. It said India's share of off-shored engineering services was just 12 per cent.

“India is well-positioned to increase its market share of engineering off-shoring from 12 per cent to 30 per cent by 2020,” it said.

“The findings estimate an additional $40 billion for the Indian IT industry by 2020 from off-shoring of engineering services alone,” the report said.

The engineering services market comprises of automobiles, aerospace, construction and industrial machinery, high-end technology and telecommunications.

“Companies in India have developed capabilities and skill sets, and invested in technology platforms to leverage this opportunity,” said Kiran Karnik, president of the software body.

“The growth in engineering services signifies the need for global corporations to expand their research and development pool beyond their home countries,” Karnik said.

The report said engineering services outsourcing could create between 150,000 and 200,000 new jobs. “India needs to invest now to yield the required number of engineers by 2020,” it said.

India is facing an acute shortage of skilled manpower to meet the needs of its booming outsourcing industry.

Ramalinga Raju, chairman of the software body, said India must target the maximum potential from this sector.

“A carefully thought-out strategy that combines strong marketing efforts such as the development of an 'Engineered in India' brand, with investments in infrastructure, workforce and expertise is required,” he said.—AFP