Key facts
- India's R&D investment is 0.64% of GDP, lagging behind countries like the US, China, and Israel.
- The private sector accounts for only 36.4% of India's R&D expenditure, while government funding dominates.
- India saw a significant increase in patent grants, reaching nearly one lakh in FY24.
- The country's Global Innovation Index ranking has improved considerably.
- Pharmaceuticals and IT sectors receive the largest share of R&D expenditure in India.
India's research and development (R&D) investment, while showing progress in areas like patent filings and global rankings, significantly lags behind international benchmarks, particularly in private sector contribution. The Economic Survey 2023-24 indicates that India's Gross Expenditure on R&D (GERD) stands at 0.64% of its GDP, a figure considerably lower than that of global leaders such as the US (3.47%), China (2.41%), and Israel (5.71%).
Despite a substantial increase in patent grants, with nearly one lakh in FY24 compared to under 25,000 in FY20, and an improved position on the Global Innovation Index (40th in 2023 from 81st in 2015), the survey points to a low involvement of the private sector. The private sector accounts for only 36.4% of India's GERD, a stark contrast to the 77% in China and 75% in the US. This reliance on government funding, coupled with challenges like uncertain returns and high costs for startups, discourages private investment in long-term R&D.
Sectors like pharmaceuticals and IT are the primary recipients of R&D expenditure in India, while emerging technologies such as quantum computing and semiconductors require more substantial funding. Bureaucratic hurdles and less competitive tax incentives further impede innovation commercialization. Government initiatives like the National Research Foundation and Production Linked Incentive (PLI) schemes aim to foster R&D and bridge the gap between academia and industry, but increased private sector participation remains a critical need for India's innovation landscape.