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Bosch already has a captive R&D centre, Robert Bosch India Ltd at Bangalore where it has around 3,300 engineers.
The centre caters to the requirements of various Bosch companies across the globe and its activities include work in the field of embedded software like control units and engine management.
"Bosch has decided to set up a second R&D engineering centre in India and this will come up at Coimbatore," Albert Hieronimus, managing director of Bosch's Indian subsidiary Mico said.
Hieronimus said the Coimbatore centre would initially start with 100 engineers, which would be gradually scaled up in future.
"Over the next five years we hope to reach half the level of the Bangalore centre at the new facility in Coimbatore," he said.
The Bangalore centre is the biggest R&D centre for Bosch outside Germany and Hieronimus said the company was expanding activities as "India has a vast pool of talent".