Investments in science and technology are vital for building India’s capabilities to address developmental challenges and for securing its strategic future. They will determine the nation’s capacity to compete in emerging technologies such as artificial intelligence and quantum computing—especially amid shifting trade policies. This calls for greater investment in cutting-edge research and a stronger culture of innovation across universities, research institutions, and industry. The key question, however, is whether India is investing enough to strengthen its science and technology ecosystem.
Successive governments have repeatedly pledged to raise the gross expenditure on R&D (GERD) from the long-stagnant level of 0.7 percent to at least 2 percent of GDP. Yet, India’s GERD-to-GDP ratio has barely moved up for three decades. The country remains far below the OECD average of 2.7 percent, and behind South Korea (4.9 percent), Japan (3.4 percent), and China (2.8 percent).
About 58-60 percent of India’s GERD is concentrated in strategic sectors such as atomic energy, space, and defence, leaving only 40 percent for civilian agencies. The university sector—with over 1,100 universities and 48,000 colleges—receives just 7 percent of GERD despite producing more than half of all science and technology publications, while public companies contribute a mere 4 percent. How can India overcome this persistently low level of R&D funding?
S&T Minister Jitendra Singh attributed India’s low R&D intensity to “relatively less investment by the private sector”. While partly valid, this does not absolve the government of responsibility. Experience from OECD countries, Japan, South Korea, the UK, and China shows a clear pattern: public R&D spending has consistently exceeded 1-1.5 percent of GDP over the past two decades. India, therefore, has a strong case to raise public investment to at least 1 percent of GDP. Market failure theory underscores that large-scale public investment is essential to strengthen basic research and build critical infrastructure.
The government ultimately recognised chronic underinvestment as a structural barrier to atmanirbhar S&T policies. It has launched a series of schemes, including the Anusandhan National Research Foundation, Research and Development Innovation Scheme, and Vigyan Dhara, to the tune of about Rs 4.0 lakh crore for five years. Most of these programmes are not entirely funded through public expenditure—they leverage government support as a catalyst for attracting private investment. For instance, over 70 percent of the ANRF’s Rs 1.0 lakh crore budget depends on private industry participation.
Since 2020, the government launched nearly a dozen national missions in critical and emerging technologies such as AI, green hydrogen, semiconductors, electric mobility, quantum, geospatial, biopharma and ocean research. Their success will hinge on the depth and scale of private sector engagement, both in terms of investment and innovation capacity, raising a key question: what if private funding does not materialise?
Private funding for GERD remains a persistent challenge. Industry contributions account for only about 0.3 percent of GDP, whereas in most advanced economies, the private sector invests 1.5-3 percent. A 2024 study by the principal scientific advisor found that, among 1,000 listed firms, only 20 could be classified as genuinely R&D-intensive, underscoring the limited scale and concentration of private research investment.
None of India’s top firms approach global benchmarks: Infosys invests less than 1 percent of its turnover in R&D, compared to 11 percent among global peers; Wipro (0.65 percent), L&T (0.13 percent), Vedanta (0.02 percent), and Reliance (0.66 percent) show similar patterns. Meanwhile, 70 percent of the world’s top 500 MNCs have established global capability centres in India, employing thousands of scientists and engineers. As Naushad Forbes, a former CII president, observed, if foreign firms can leverage India’s talent pool so effectively, why have leading domestic firms not made comparable R&D investments?
Indian small and medium enterprises, which contribute significantly to employment, continue to languish with residual R&D support, accounting for only about 1 percent of total industrial R&D. The government should seriously consider increasing the Council of Scientific & Industrial Research’s budget by at least 200 percent, reflecting its expanded role in coordinating regional innovation clusters and serving as the R&D backbone for SMEs.
R&D capabilities could also be integrated into the expanded Production-Linked Incentive scheme. While the government offers a 200 percent weighted tax deduction for in-house R&D, there is no robust mechanism to verify whether firms claiming these incentives are genuinely engaged in research. It is high time the department of science and technology adopted international best practices, particularly drawing lessons from South Korea’s R&D tax incentive model, to ensure effective targeting and accountability.
The ongoing global trade turbulence is a wakeup call for India’s national innovation system. India must act decisively to transform these challenges into opportunities. To achieve meaningful progress in new science and innovation missions, the government should commit to raising public R&D expenditure, while encouraging the private sector to increase its contribution to at least 0.6 percent of GDP within the next three years, with a planned annual growth of 20 percent. Achieving these targets will not only strengthen India’s scientific and technological foundations over the coming decade but also safeguard its economic and strategic autonomy amid rising geopolitical uncertainties.
Venni V Krishna
Professorial Fellow, University of New South Wales, Australia
(Views are personal)