India’s quest for technological leadership is hindered by industry’s reluctance to significantly invest in research and development (R&D). Despite government efforts to boost innovation, India’s R&D expenditure remains strikingly low, constituting only 0.6% of GDP in 2023. This is in sharp contrast to global tech leaders like Israel and South Korea, who invest over 4% of GDP, while the U.S. and China exceed 3.5% and 2.6%, respectively.
Industry accounts for just 36% of India’s R&D funding, compared to 75-80% in countries like the U.S. and China. The concentration in Indian corporate R&D is notable, with pharmaceuticals and automobiles alone comprising over half of the spending, while vital sectors such as electronics and healthcare receive minimal attention. The top 100 Indian corporates dominate nearly 78% of industrial R&D, highlighting the narrow engagement in research beyond a few key players.
The talent pipeline is another constraint, with India having only 260 full-time researchers per million people, far behind peers. Attempts to boost innovation through new initiatives depend heavily on altering corporate attitudes towards R&D investment. Strengthening industry-academia collaboration for patentable innovations is essential to bridge this deficit, ensuring that R&D becomes central to India’s long-term competitiveness.