ER&D is Booming! Could This Be the End of Traditional IT

ER&D Set to Outpace IT: L&T Tech CEO Predicts a $3 Trillion Industry Surge

L&T Tech Services CEO Amit Chadha Foresees AI, Automation, and Supply Chain Restructuring as Key Growth Drivers

The Engineering Research & Development (ER&D) sector is poised for massive growth, potentially outpacing the traditional IT industry, according to Amit Chadha, CEO of L&T Technology Services (LTTS). Speaking at the Nasscom Technology & Leadership Summit 2025, Chadha highlighted automation, artificial intelligence (AI), compute power evolution, and supply chain shifts as primary accelerators of this transformation.

ER&D: A $3 Trillion Industry in the Making

Chadha emphasized that the ER&D sector is projected to reach a market size of $3 trillion in the coming years, driven by technological advancements and industry restructuring.

“ER&D will outgrow IT as industrial automation, compute dynamics, and supply chain realignments drive transformation,” Chadha said.

His remarks come at a time when IT industry leaders acknowledge that the traditional 30-year-old IT services model is being disrupted and must adapt to new realities.

AI and Gen AI Revolutionizing Product Development

AI is no longer just a tool—it’s an integral part of product development across industries. According to Chadha, AI and Generative AI are transforming software lifecycles, product development, testing, and maintenance, making companies more efficient and innovative.

• 20% of Cognizant’s code is already generated by AI and approved by developers.
• LTTS itself generates 1.5 lakh lines of AI-generated code per month, totaling 2 million annually.

Out of 25,000 engineers at LTTS, over 8,500 (30%) have already been trained in AI and Gen AI tools, demonstrating the company’s commitment to staying ahead of the curve.

L&T Tech Services: Climbing the Global ER&D Ladder

Chadha proudly declared that LTTS is the No.1 pure-play ER&D company in India and ranks third globally. However, he believes the company is well-positioned to become the world’s top ER&D firm soon.

“The gap between the No.1 and No.3 globally is not very big. Give us some time, and we will be No.1 worldwide,” Chadha stated confidently.

LTTS continues to drive innovation by investing 1.5-2% of its revenue into advanced technologies, filing 176 AI-related patents, and leveraging AI-driven solutions across multiple industries.

Is ER&D More Resilient Than IT?

While some analysts worry about ER&D’s ability to weather economic downturns, Chadha remains optimistic. He believes ER&D is as resilient—if not more—than the IT industry.

Challenges in the Automotive Sector

One of ER&D’s major verticals, automotive, is facing challenges, particularly in Germany, where government incentives were withdrawn. However, Chadha remains unfazed.

“Automotive is going through a tough phase, but the industry will rebound within two quarters,” he asserted.

The Future of ER&D

With continuous investments in AI, automation, and supply chain advancements, ER&D is well-positioned to surpass traditional IT in scale and impact. As industry dynamics evolve, L&T Tech Services aims to lead the charge in engineering innovation on a global scale.