India stands at a pivotal moment in its economic and technological trajectory. With its vast human capital and a rapidly expanding economy, it harbours ambitions of becoming a global power. Yet, this grand vision is significantly hampered by a deep-seated and chronic insufficiency in research and development (R&D).
The scale in numbers
The scale of India’s R&D deficit is best illustrated by a few stark numbers. Despite having 17.5% of the world’s brains (since it is home to 17.5% of the world’s population), India produces only a meagre 3% of the world’s research output. This disparity highlights a fundamental failure in leveraging its massive demographic dividend to generate high-value research.
The situation is not much better on intellectual property creation. Recent reports from the World Intellectual Property Organization (WIPO) suggest a mixed picture: dramatic growth from a very low base, but overall an unimpressive performance. In 2023, India was ranked sixth globally for total patent filings, recording 64,480 applications. This represents the fastest growth (+15.7%) among the top 20 countries and is a significant figure. However, in the context of the total 3.55 million patent applications filed globally in 2023, India’s share is still low, at approximately 1.8% of the global total. Critically, when measuring resident applications per million inhabitants, a truer reflection of domestic innovation intensity, India ranks significantly lower (47th), underscoring that the overall growth is not yet translating into widespread, population-level innovation dominance.
The most damning evidence of India’s R&D gap lies in R&D expenditure. Gross Expenditure on R&D in India, covering both private and public sectors, has consistently hovered between 0.6% and 0.7% of GDP in recent years (and is slipping as GDP grows). This figure pales in comparison to major economies and innovation hubs: China spends around 2.4%, the United States is at approximately 3.5%, and Israel leads globally at over 5.4%. To grasp the magnitude of underinvestment, one only needs to compare India’s entire national R&D spend with that of a single multinational corporation. In 2023, the Chinese technology giant, Huawei, invested a colossal CNY 164.7 billion (approximately $23.4 billion) into R&D. This amount of spending from just one company — no doubt driven by intense global competition and U.S. sanctions, particularly focusing on crucial areas such as semiconductor technology — exceeds the total combined R&D expenditure of all public and private entities in India, a nation of more than 1.4 billion people. As Nvidia Chairman Jensen Huang noted, Huawei’s relentless investment has propelled them to be “nanoseconds” behind the U.S. in advanced semiconductor capabilities. This corporate-level intensity of R&D is the engine of next-generation technological power. India’s inability to muster even a fraction of this kind of concentrated, strategic investment speaks volumes about the challenge ahead for it.
So much for the numbers. They are merely symptoms of deeper, structural problems within the Indian innovation ecosystem that it must tackle on a war footing.
The government sector is the funds driver
Most disappointingly, private sector participation in R&D spending is abysmal. A global hallmark of a mature innovation economy is the dominant role of the private sector in R&D. In developed nations, industry typically accounts for two-thirds or more of such expenditure. In India, however, the government sector (central, State, higher education, and public sector industry) remains the main driver, contributing approximately 63.6% of R&D funds, with the private industrial sector contributing only around 36.4%. India’s business tycoons need to rise to the R&D challenge, but they are instead largely complacent and myopic about it. Indian industry’s low investment is driven by a focus on incremental improvements over disruptive innovation, a preference for technology licensing over domestic development, and a general risk-averse culture.
The second dismaying feature is one we had already identified in the second tenure of the United Progressive Alliance: a persistent academia-industry disconnect, the subject of a report N.R. Narayana Murthy wrote for us more than a decade ago that is sadly gathering dust. Indian academia, despite producing millions of highly skilled graduates, often operates in a silo. Research is frequently theoretical and disconnected from the immediate, market-driven needs of the industry. The mechanisms for technology transfer, commercialisation of research, and joint industry-academic projects remain underdeveloped. Nor do Indian companies look to the world of academia for help. In the U.S., companies commonly bring ideas to universities and give grants for student researchers to develop them into marketable innovations. There is no such culture in India. This gulf prevents valuable research from crossing the “valley of death” between the laboratory and the marketplace.
And there is no escaping the brain drain. While India produces a vast number of PhDs and engineers, the most ambitious and the talented often seek better infrastructure, funding, and career progression opportunities abroad. The domestic R&D environment struggles to attract and retain world-class researchers due to limited high-end research facilities and lower salary benchmarks compared to the rest of the world.
The allocation of public R&D funds is often constrained by slow bureaucratic processes. Project approval times can be excessively long, and the release of funds is frequently staggered and unpredictable, impeding the smooth execution of ambitious, long-term research programmes.
What, then, is the path forward?
The goal of building comprehensive tech and economic muscle, worthy of a “Viksit Bharat”, is not a sprint but a marathon. To achieve it, India must engineer a fundamental shift in its approach. The most immediate and critical step is to raise the R&D expenditure to GDP ratio to at least 2% within the next five to seven years. This requires a massive public spending commitment, coupled with substantial tax incentives and grants to encourage the private sector to ramp up its contribution to at least 50% of the total R&D spend. The launch of the ₹1 lakh crore Research, Development and Innovation (RDI) Fund by the government is a step in the right direction, provided it is disbursed efficiently and targeted towards frontier technologies.
An ambitious India needs to move away from scattered research efforts and focus on national missions in strategic, high-value domains: semiconductors, artificial intelligence (AI), quantum computing, advanced materials and green energy. These missions require long-term, uninterrupted funding and clear, measurable outcomes tied to national security and economic sovereignty.
Universities and research
And there is no escaping India’s obligation to reform higher education. Universities must transition from being purely teaching institutions to also becoming centres of excellence in research. This involves significantly boosting funding for PhD programmes, creating competitive research faculty positions, and building world-class research infrastructure. Furthermore, mandatory and structured mechanisms for industry-sponsored research chairs and joint incubation centres must be established to bridge the academic-industry gap.
India must also inculcate a robust intellectual property culture in the country. This means simplifying patent filing processes, strengthening enforcement, and creating attractive financial incentives for inventors (both academic and corporate) whose patents are commercialised.
India possesses the intellectual capital and the aspiration to become a global innovation leader. However, the current deficit in R&D investment — so glaringly exposed by the comparison to a single company such as Huawei — cannot sustain this ambition. The next decade must be dedicated to creating the structural, financial and cultural foundations for innovation. If these fundamental changes are not executed with political will and unwavering commitment, the goal of Viksit Bharat will recede well beyond 2047.
Shashi Tharoor is the fourth-term Member of Parliament (Congress) for Thiruvananthapuram (Lok Sabha), an award-winning author and a former Minister of State for Human Resources Development
Published – December 29, 2025 12:16 am IST
