The government frequently proclaims that it has placed research and development at the heart of the journey towards Viksit Bharat@2047. In a press statement issued in November, it highlighted that R&D expenditure had “more than doubled” from `60,196 crore in 2010-11 to Rs 1.27 lakh crore in 2020-21. While the stated emphasis on research and innovation as pillars of manufacturing ambition is welcome, neither the numbers cited nor the ground reality offer much cause for celebration.
A doubling of absolute R&D spending over more than a decade in a fast-growing economy that seeks to rely on technology-led production does not signal progress—it points to stagnation. In real terms, it likely represents a decline. This neglect becomes even more striking when viewed alongside the fact that the government sector still accounts for nearly two-thirds of total R&D expenditure. Corporate India’s persistent reluctance to commit meaningful capital to technology creation is both glaring and indefensible.
Global Gap
R&D is the seedbed of innovation, which in turn underpins technological advancement and higher capital productivity. When investment in research remains fragmented and half-hearted, meaningful commercial outcomes are unlikely to follow. Compared with other emerging market economies, India lags badly in developing indigenous technologies and deep knowledge bases.
China offers the starkest contrast. It spent over $500 billion—around Rs 44.5 lakh crore—on R&D in 2024 and likely a similar inflation-adjusted amount in 2025. Even if India spent an estimated Rs 1.8 lakh crore on R&D in 2025, that amounts to barely 4% of China’s outlay. As a share of GDP, China’s R&D expenditure stands at about 2.7%, compared with India’s meagre 0.6-0.7%. Other emerging economies such as Israel (5.4%) and South Africa (4.9%) spend an even higher proportion.
China and the US are now almost at par and lead the world in absolute sums utilised for R&D. The Global Innovation Index 2025 underscores the long-term nature of this effort. China has entered the top 10 for the first time. India’s retention of its 38th position—while leading lower-middle-income economies—is, at best, faint consolation.
From Patent Filings to Economic Output
The government often points to the tripling of patent filings between 2020-21 and 2024-25 as evidence of a surge in domestic innovation. This interpretation is misleading. Under the global patenting framework of the Patent Cooperation Treaty, filings in any country largely mirror global trends rather than reflect indigenous breakthroughs. India does rank third globally in the award of science and engineering PhDs, but the conversion of research output into economic production, scalable technologies or commercially viable ventures remains weak.
The Rs 1-lakh-crore Anusandhan National Research Foundation announced in the last Budget was widely welcomed. Yet, the two-tier funding mechanism has reportedly seen limited interest even from large corporate houses. With few exceptions, established private players continue to prioritise short-term profitability and market dominance over risk-bearing innovation, despite access to a deep and underutilised talent pool.
Unless this mindset changes—voluntarily or through stronger policy nudges—it is unrealistic to expect India to emerge as a high-tech manufacturing hub. The country already missed the chance to become a clear global leader in labour-intensive manufacturing. Its prospects in technology-driven production could be similarly compromised if even financially strong firms persist in relying on imported designs, R&D and critical inputs. Startup funding alone, even by patient capital, cannot compensate for this structural unwillingness to invest in innovation. India’s ambitions will remain rhetorical unless research and development move from policy statements to balance sheets.