India’s Engineering Research & Development (ER&D) sector is set to surpass Business Process Management (BPM) in revenue in FY25. ER&D revenue grew by nearly 30 percent to $55.7 billion in FY2025, overtaking BPM, which reached $54.6 billion. The change in the sector is attributable to the increasing role of digital transformation across industries and India’s deep engineering talent pool, say experts. This assumes significance at a time when chief executives of the largest contributor in the tech industry — the information technology (IT) services industry- are calling for an overhaul of the business model amid artificial intelligence (AI) disruption. A sizeable percent of the top 50 global engineering service providers is headquartered in India, according to a report by Deloitte and Nasscom, released on February 24, 2025. Despite this rapid expansion, IT services companies are yet to dominate the ER &D space, says Rajiv Gupta, BCG’s Telecommunications, Media & Technology practice head in India.