India's Innovation Challenge and Opportunities

Summary of India’s Research, Development, and Innovation Landscape

Funding and Government Initiatives

• The Government of India launched a ₹1,00,000 crore (approx. $12 billion) Research, Development, and Innovation (RDI) Fund in 2025.
• In the 2026 Union Budget, Finance Minister Nirmala Sitharaman proposed a ₹20,000 crore corpus for deep-tech startups. Furthermore, Atal Tinkering Labs funding saw an increase from ₹500 crore to ₹3,200 crore.
• Regulatory reforms include the removal of a three-year existence requirement for accessing the Industrial R&D Promotion Programme and the introduction of the SHANTI Act, 2025, facilitating patents for peaceful nuclear applications.

Innovation Index and Patent Activity

• India ranks 38th among 139 economies in the Global Innovation Index (GII) 2025.
• Patent filings increased from under 59,000 (2020-21) to over 1,10,000 (2024-25), with domestic filings accounting for 62%.
• Importantly, India filed 4,547 Patent Cooperation Treaty (PCT) applications in 2024, demonstrating an increase of 22% from 2023, though still significantly lower compared to China and the US.

Expenditure on R&D

• India's R&D investment is currently at 0.65% of GDP, notably less than advanced economies; it ranks lowest among BRICS nations except for South Africa.
• The underinvestment by the private sector is a key issue, with the state bearing the bulk of R&D expenditure.

Human Capital and Gender Diversity

• India ranks 95th in employment in knowledge-intensive sectors and 80th in full-time equivalent researchers (GII 2025).
• There are significant gender diversity challenges, with India positioned 101st among 119 economies for women's employment in advanced degrees.
• Initiatives like WIDUSHI and WISE-KIRAN aim to enhance women's participation in STEM fields; however, their effectiveness is yet to be demonstrated.

Challenges in Innovation and Entrepreneurship

• There are flaws in the commercialization process, with significant obstacles preventing the successful transfer of ideas from research labs to market.
• A lack of collaboration between academia, industry, and finance limits the potential for high-tech entrepreneurship.
• There's a pressing need for private sector involvement in high-risk, long-term R&D investments to foster genuine technological innovation.

International Comparisons and Trends

• India’s patent application growth of 4,547 in 2024 is still minimal in the global context, with countries like China and the US achieving far higher numbers (70,000 and 54,000, respectively).
• The absence of major global technologies originating from India is linked to historical policy limitations and private sector reluctance to engage in deep R&D.

Future Outlook

• For India to transform its innovation ecosystem, private sector commitment and a robust framework for nurturing R&D-driven enterprises are crucial.
• The future of India’s innovation landscape may hinge on developments in sectors like deep-tech and space, where the government is actively investing.

Conclusion

India's research and innovation framework shows promise, however, genuine transformative change hinges on effective execution of policies, increased private-sector participation, and improved collaboration between research entities and industry.