An increasing number of multinationals have come to realize that the so-called emerging markets such as Brazil, Russia, India, China and South Africa (BRICS) offer very good conditions for conducting research and development (R&D) activities to develop innovative and resource-efficient products and services for the global market at relatively low cost. To exploit this business opportunity, multinationals need to build up the necessary R&D capacity and knowledge in local units and integrate the new unit into the existing global organization to enable the new knowledge developed to be shared with other R&D units in the group. Research to date has not studied these two interconnected processes. By studying a number of Swedish multinational companies' R&D units in India and how they have built up the necessary local R&D capacity and knowledge and how this affects the companies' global R&D strategy and organization, the study will not only address the research gaps outlined above, but also contribute knowledge to practitioners on how this process can be managed and how challenges can be addressed.