India’s Research & Development Landscape: Progress, Challenges, and the Road Ahead

In 2023-24, private industry accounted for 45.2% of India’s gross expenditure on Research & Development (R&D). During 2020-21, just three years ago, it was 32.2%. Over the same period, the government’s share fell from 54.5% to 48.2%, below half for the first time in the history of Indian research funding.

Who, then, finances scientific research in India? National R&D expenditure has more than tripled over the past decade, rising from Rs 79,356 crore in 2013–14 to Rs 2.45 lakh crore in 2023–24, with projections indicating an increase to Rs 3.13 lakh crore in 2025–26. R&D intensity, measured as a percentage of GDP, has increased from 0.64% in 2020–21 to 0.84%, its highest recorded level, and is projected to reach 0.90% in 2025–26. In purchasing power parity terms, India’s research expenditure has nearly doubled in three years, reaching approximately US $120 billion.

Indian scientific research publications grew from 78,135 in 2012 to 207,390 in 2022, a compound rate of 10.25% against a world average of 4.74%, placing India 3rd globally behind China and the USA. Of the 110,375 patent applications filed in India in 2024-25, 62% came from Indian residents. The resident share of patents actually granted has risen from 15% in 2013-14 to 32%. There are now 5.07 lakh full-time equivalent researchers in the country, 354 per million people, up from 262 three years ago, and 1.47 lakh of them, or 29%, are women, against 18.6% in 2020-21. This is real ascent.

But scrutinised closely, there are a few shades to these achievements that merit a discussion.

At 0.84% of GDP, India still spends less than a third of what Korea, Israel or the USA commit, and roughly a third of China’s 2.58%. Even if the projected target of 0.90% is achieved, India will continue to lag behind countries such as Brazil. Reaching the 2% of GDP threshold that is widely considered important for nations seeking to compete at the technological frontier cannot be achieved through government funding alone. It requires the private share to keep compounding at something close to the 20% annual growth rates of the last three years.

An examination of private-sector expenditure raises further questions. Multinational corporations now account for 71.3% of business R&D spending in India, up from 49.9% in 2020–21. This category includes 252 Indian multinational corporations alongside 124 foreign multinationals. Yet, the distribution of industrial R&D expenditure remains heavily concentrated in established sectors. Transportation accounts for 32.6% of industrial R&D spending, followed by drugs and pharmaceuticals at 21.4%, biotechnology at 8.6%, and information technology at 7.9%. While these industries are important, much of their research focuses on incremental improvements to existing products and processes. Emerging technological frontiers, including semiconductors, quantum technologies, advanced materials and foundational artificial intelligence, continue to attract relatively limited investment.

Extramural funding (financial support for research coming from external agencies rather than internal institutional budgets) across all central agencies came to Rs. 3,356 crore in 2023-24: 1.4% of National R&D, with 73% of it going to academic institutions.

A true test for all budgetary announcements lies in their application. The Rs 1 lakh crore Research, Development and Innovation Scheme is consequential, but it should be judged on execution rather than announcement.

Encouragingly, the Anusandhan National Research Foundation has begun developing mission-oriented, outcome-driven research programmes with industry participation. The National Quantum Mission has established four thematic hubs focusing on quantum computing, communication, sensing, and materials and devices. These hubs bring together 14 technical groups involving 43 institutions. Such initiatives can help strengthen the country’s research ecosystem, provided their infrastructure and expertise are accessible to startups and smaller enterprises that cannot independently afford sophisticated fabrication facilities or advanced characterisation equipment.

For decades, India has taken pride in its tradition of ‘jugaad’—the ability to devise ingenious, low-cost solutions with limited resources. While this spirit of improvisation remains valuable, the country’s ambitions now demand a more structured approach to innovation. India must increasingly prioritise systematic research, defensible intellectual property, and the development of technologies it can own, control and commercialise rather than depend on borrowing them from elsewhere. Policymakers, investors and industry leaders must therefore work from a common understanding of India’s research and innovation landscape. They need to establish shared priorities, coordinate investments and hold the system accountable for achieving clearly defined targets.

The wheel of change must turn considerably faster.