India today presents a striking paradox in research, development, and innovation. Despite unprecedented government ambition, reflected in major funding commitments, regulatory reforms, and improving global innovation rankings, the country still continues to underperform on the fundamentals that drive innovation strength. Headlines suggest momentum, yet outcomes tell a more sobering story: low research and development (R&D) intensity, limited global technological influence, weak research-to-market translation, and persistently inadequate private-sector participation. While recent policy initiatives are necessary and welcome, India’s innovation challenge is no longer one of intent but of execution. An examination of R&D expenditure, patent scale and quality, human capital gaps, and the weak bridge between research and entrepreneurship leads to an inevitable conclusion: meaningful transformation will require far deeper systemic change, particularly from the industry.
A year that holds promise
Following the Government of India’s announcement of the ₹1,00,000 crore (approximately $12 billion) Research, Development, and Innovation (RDI) Fund last year, 2026 has begun with much promise. In her ninth consecutive Union Budget speech, Finance Minister Nirmala Sitharaman reaffirmed the government’s commitment to R&D through a ₹20,000 crore corpus for deep-tech startups, extended tax incentives, and investments in digital infrastructure. A near six-fold increase in funding for the flagship programme, Atal Tinkering Labs — from ₹500 crore to ₹3,200 crore — also highlights the focus on nurturing future innovators. The government’s intent is clear: a Viksit Bharat powered by Yuva Shakti. But whether this translates into innovation outcomes will depend on how decisively industry responds.
These measures follow closely on the removal of the three-year existence requirement that had limited the access of deep-tech startups to schemes under the Department of Scientific and Industrial Research’s Industrial R&D Promotion Programme. Late last year, the government also lifted the blanket ban on patenting inventions related to atomic energy. The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025 now allows patents for the “peaceful uses of nuclear energy and radiation”, which opens the door for greater private-sector participation. Yet, as with other reforms, the real test will be whether industry invests enough to translate this openness into deployable technologies.
All these developments coincide with a significant improvement in India’s ranking in the Global Innovation Index (GII). India now ranks 38th among 139 economies in GII 2025, and patent filings have nearly doubled from under 59,000 in 2020-21 to over 1,10,000 in 2024-25. While domestic filings now account for about 62% of the total, this shift is both recent and policy-driven, underscoring that the underlying innovation base — particularly industry-led R&D — remains shallow. Although these indicators point in the right direction, there remain systematic and structural issues that keep India from real transformation in research, development, and innovation.
The private sector’s shortcomings
R&D expenditure as a share of GDP — especially private-sector spending — is a key indicator of innovation readiness. India invests just 0.65% of its GDP in R&D, far below advanced economies and many peers (lowest among BRICS nations except for South Africa) including Singapore, Japan, and South Korea. In most innovation-leading economies, industry drives the most R&D spending. In India, however, the state still bears a disproportionate share, reflecting the private sector’s limited appetite for long-term, high-risk innovation.
Similarly, India’s patent filing numbers are impressive in isolation, but are a fraction of the over 1.8 million patent applications filed in China (1.6 million domestic filings) and significantly less than the 600,000 filed in the United States (2,70,000 domestic filings). This reflects the absence of sustained, high-risk R&D investment by India’s private sector.
One way to assess innovation impact is by international patent filings, since inventors seek protection abroad only for commercially viable ideas. The number of Patent Cooperation Treaty (PCT) applications show India’s global contribution: 4,547 in 2024, up 22% from 2023. While growth is strong, India remains far behind China (over 70,000), the U.S. (over 54,000), and Japan (over 48,000). Even Switzerland, which is a bit larger than Kerala, filed over 5,300 applications. These examples show that scale, and not just growth rate, drives global technological influence.
According to the GII 2025, India performs poorly on key human-capital indicators critical to innovation, ranking 95 in employment in knowledge-intensive sectors and 80 in the number of full-time equivalent researchers. The situation is more acute with respect to gender diversity, where India ranks 101 among 119 economies in the employment of women with advanced degrees, a weakness that matters given the strong correlation between diversity and innovation outcomes. While the government has acknowledged this gap and introduced initiatives such as Women’s Instinct for Developing and Ushering in Scientific Heights and Innovations (WIDUSHI) and Women in Science and Engineering (WISE)-KIRAN to improve women’s participation in science and engineering, their impact remains to be seen. For now, the data underscore that India’s innovation challenge is as much about talent inclusion and retention as it is about funding or policy intent.
A faultline
An attribute of India’s development trajectory that is often quoted is the missing “large-scale, labour-intensive industrialisation” when compared to its east Asian peers leading to over reliance on agriculture and services. Even India’s so-called new age unicorns are built on abundance of labour (instant delivery platforms, for example) rather than deep, defensible, genuine R&D-led technological innovation. It is, therefore, reasonable to conclude that the absence of globally significant technologies of Indian origin stems not merely from historical policy choices but also from a sustained reluctance within the private sector to invest in deep, long-gestation R&D.
Innovation reaches its full impact only when research is anchored to enterprise, i.e., when ideas move successfully from laboratory to market. In India, this last step — the absence of industry-led commercialisation mechanisms affecting innovation remains the weakest in the Research, Development, and Innovation (RDI) chain. While universities and public research institutions generate growing scientific output, mechanisms for technology transfer, venture creation, and risk-capital alignment remain underdeveloped. High-technology entrepreneurship is inherently uncertain, capital-intensive, and requires long-gestation, demanding patient funding, strong intellectual property protection, and an ecosystem that tolerates failure. Countries that lead in innovation have built bridges between academia, industry, and finance. India’s opportunity lies not just in increasing startup numbers but also in nurturing R&D-driven enterprises capable of creating globally competitive technologies.
India’s private sector must now take up the baton and rise to the challenge of driving India’s RDI story. There are visible green shoots in the commercial space sector with several successful start-ups demonstrating strong promise. Deep tech is another emerging area where the RDI fund set up by the government can be a game changer, provided industry positively embraces the opportunity and commits long-term capital. When the 6G standard is globally launched in the coming years, it will be telling how many Indian origin patents feature among the standard essential patents (SEP) list. The government has paved the way. But the question now is whether India’s private sector R&D will race ahead.
Gaurav Jain is the founder of Hastin Research and an IPR expert helping enterprises, startups, and universities transform ideas into valuable IP. Mukundan Chakrapani holds a PhD in science and a law degree, with cross-domain experience, and has recently rejoined academia. The views expressed are personal
Published – March 13, 2026 12:16 am IST
Source: https://www.thehindu.com/opinion/lead/preparing-india-for-a-true-innovation-led-economy/article70735933.ece
