Despite India’s strides in innovation, supported by its scientific manpower, robust IT and pharmaceutical sectors, and a thriving start-up ecosystem, the country continues to lag in research and development (R&D) investment. The gross expenditure on R&D (GERD) in India has increased from approximately ₹60,196 crore in FY11 to about ₹1,27,381 crore in FY21. However, this remains at just 0.64 per cent of GDP — far lower than many global counterparts.
In most developed and emerging economies, business enterprises contribute over 50 per cent to GERD, with countries like China, Japan, South Korea, and the US surpassing 70 per cent. In the US, private sector giants such as Google and Amazon lead R&D spending, contributing to around 70 per cent of the total. China has adopted a hybrid model, combining strong government funding with increasing private sector participation, pushing its R&D spending to approximately 2.1 per cent of GDP.
Limited role of private sector
The Government of India data show that the country remains reliant on government-funded R&D, with limited participation from the private sector. The industrial R&D investment is low and concentrated in a few sectors.
The Drugs and Pharma industry leads R&D expenditures significantly, accounting for nearly 50 per cent of the total. This indicates a high focus on research in the pharmaceutical sector, likely due to vaccine development, drug innovation, and healthcare advancements.
Information Technology is the second-highest contributor, with around 15 per cent of the expenditure. This reflects heavy investment in AI, cybersecurity, and software advancements. Transportation is the third-largest sector, with around 10 per cent of R&D spending, suggesting investments in EVs, autonomous vehicles, and infrastructure improvements.
Defense Industries and Chemicals (excluding fertilizers) each contribute approximately 7-10 per cent, highlighting significant investment in military technology, chemical innovations, and materials science. Biotechnology follows closely, showing steady R&D growth, possibly linked to medical research and genetic engineering.
Electrical and Electronics, Fuels, Telecommunications, and Metallurgical Industries show relatively lower R&D investments. This could suggest maturity in these industries, where innovation is incremental rather than disruptive, or slower adoption of newer technologies.
Focus on basic research
Experts attribute India’s R&D shortfall to its historical focus on basic research rather than applied research, which is essential for driving innovation and attracting private investment. To address the issue, stakeholders emphasise the need for stronger industry-academia collaboration, increased private sector investment, and a shift towards applied research. With sustained efforts, India can enhance its global competitiveness and foster an R&D ecosystem that drives technological advancements and economic growth.
Govt efforts
“India R&D spending (GERD) has doubled in last one decade during the government headed by Prime Minister Narendra Modi, from ₹60,196 cr in 2013-14 to ₹1,27,381 cr and is shaping the future economy of India which will be defined by homegrown innovations in artificial intelligence, biotechnology, and quantum computing,” Union Minister of State (independent charge) for Science and Technology, Jitendra Singh, said recently.
