India has emerged as a preferred location for corporate R&D and strategic marketing facilities. Until a decade ago, these functions were conducted almost exclusively near the corporate headquarters of MNEs in the developed world. One reason for the relocation of these functions to India is its changing role as a source of market information. With the saturation of the markets in the developed world, MNEs are increasingly interested in cultivating the bottom-of-the-pyramid market, which makes India an ideal location to collect market knowledge. In this paper, we focus on the emerging relationship between markets and MNEs in India. Drawing on interviews with MNEs in Bangalore, we show how the perception of India as a location of innovation has begun to change, and discuss how India has begun to serve as an ideal location for market knowledge gathering activities by MNEs. We argue that their new orientation offers a window of opportunity that has implications for other developing economies, and conclude that India’s unique combination of market assets have played an important role in enabling MNEs to upgrade their functions.
Aoyama, Yuko and Balaji Parthasarathy. “Research and Development Facilities of Multinational Enterprises in India”, Eurasian Geography and Economics, 53, 6 (2012): 713-730