India’s R&D Growth: Increased Investment & Innovation Reforms

India stands as the world's second largest manufacturing nation of Science Technology Engineering and Mathematics graduates after China. India holds the 39th position on the Global Innovation Index 2024 while China stands at 11th rank because India dedicates limited funding to Research and Development. To strengthen India’s R&D ecosystem, reforms such as increased funding, industry-academia partnerships, and efficient project management are needed.

Features of R&D system in India

• R&D Funding Status:

  • The R&D funding rate in India for 2022 equaled 0.65% of the national GDP but China distributed 2.43% and Brazil allocated 1.15%.

• Need to Prioritize R&D:

  • The national economic growth depends heavily on R&D because it helps India earn global competitiveness and upgrades its position from lower-middle-income classification to enhance productivity levels.

  • Modernization efforts in pharmaceuticals along with chemicals and automotive industries are necessary to face opponents from developed countries as well as emerging economies.

  • Deep-tech companies that develop quantum computing systems along with biotechnology and robotics and nanotechnology need major R&D funding.

  • The increase in labor costs requires manufacturing companies to develop automated assembly systems that incorporate AI and digital technologies for better productivity and export potential and higher added value.

• Global R&D Scenario:

  • South Korea underwent a fundamental transformation after doubling its R&D funding from 0.4% to 2.5% of GDP during two decades which enabled the nation to develop into a modern society and its corporate sector made an 800-fold increase in research spending by 2005.

  • The Chinese government increased their research and development investments from 0.6% of GDP in the late 1990s to 2.4% in the current period which corresponds to their greatest economic growth period.

Challenges in India’s R&D Ecosystem

• The expenditure for R&D research in India stands much lower than comparable levels in developed economies such as the United States and Japan at 3.46% and 3.30% respectively and Israel and South Korea at 5.56% and 4.93% respectively.

• The main source of R&D funding during 2020-2021 came from government institutions since they provided 63.6% of the total while private sector support reached only 36.4%.

• Indian research institutions and industries perform operations independently from each other which diminishes innovation possibilities and interdisciplinary collaborations.

• The successful link between Stanford University and Silicon Valley development highlights a missing pattern in Indian industry-academia connections.

Lack of Diversification:

• The research and development (R&D) priorities in India primarily concentrate on defense and scientific space applications while completely disregarding industrial production science.

• Example: Prioritization of missile technology (Agni, BrahMos) over semiconductor advancements.

• The majority of Indian companies choose to bring in foreign technology solutions although startup companies primarily work on IT and e-commerce solutions instead of pursuing deep-tech innovation.

• The research outputs from DRDO, ISRO and BARC become incapable of appearing as commercialized products because of bureaucratic procedures.

India’s Initiatives Related to R&D

• Vigyan Dhara Scheme

• Rashtriya Vigyan Puraskar (RVP)

• Science, Technology, and Innovation Policy 2020

• VAIBHAV Fellowship

• Reforms to Strengthen India’s R&D Ecosystem

Increased R&D Investment:

• India needs to increase research and development spending during the forthcoming decade by obtaining essential financial support from the private sector.

• The Anusandhan National Research Foundation (ANRF) must serve as a mechanism for stimulating private sector and philanthropic donations toward research programs.

• The government should speed up the process of distributing the Rs 1 lakh crore innovation fund released in the Union Budget 2025–26 over the next 3–5 years to enhance deep-tech research and development.

Efficient Project Management:

• The ANRF should use the US Defense Advanced Research Projects Agency (DARPA) model to establish an efficient program management system combined with transparent funding along with a CEO-led operational structure.

Encouraging Risk-Taking:

• Research at its initial stage nearly always includes open-ended exploratory work that produces long-term outcomes rather than instant findings.

• The government should track project development initiatives but maintain flexibility to accept reasonable risks.

Conclusion

India's economic future hinges on robust R&D investment, industry-academia collaboration, and policy reforms. India will achieve global science and technology leadership position by dedicating increased financial support to research alongside university innovation development and open-minded risk management. The country's position as a significant force in the world innovation market will be permanently secured through this economic expansion combined with technological independence.