Preparing India for a true innovation-led economy

UPSC Syllabus: Gs Paper 3- Science and Technology- developments and their applications and effects in everyday life.

Introduction

India faces a clear paradox in research, development, and innovation (RDI). Government ambition has grown through large funding commitments, regulatory reforms, and better global rankings. However, outcomes remain weak. R&D spending is low, global technological influence is limited, and private-sector participation is inadequate. India’s challenge is no longer policy intent but execution. Real transformation requires stronger industry investment, better research commercialisation, and deeper systemic change across the innovation ecosystem.

Government Policy Push for Innovation

1. Large financial commitments for RDI: The government announced a ₹1,00,000 crore Research, Development, and Innovation Fund and a ₹20,000 crore corpus for deep-tech startups. These measures aim to strengthen long-term technological research and innovation capacity.
2. Support for early-stage innovation ecosystems: Funding for Atal Tinkering Labs increased from ₹500 crore to ₹3,200 crore, showing a focus on building innovation capacity among young students and future entrepreneurs.
3. Regulatory reforms to promote deep-tech research: The removal of the three-year existence requirement allows deep-tech startups easier access to schemes under the Industrial R&D Promotion Programme.
4. Opening new sectors for innovation activity: The SHANTI Act, 2025 allows patents for the peaceful uses of nuclear energy and radiation, creating opportunities for private-sector research and technological development.
5. Improvement in global innovation indicators: India’s Global Innovation Index ranking improved to 38 among 139 economies in 2025, showing progress in innovation capacity.
6. Rising domestic patent activity: Patent filings increased from under 59,000 in 2020–21 to more than 1,10,000 in 2024–25, and domestic filings now account for about 62% of the total.
7. 7. Government initiatives for gender inclusion in science: Programmes such as Women’s Instinct for Developing and Ushering in Scientific Heights and Innovations (WIDUSHI) and Women in Science and Engineering – KIRAN (WISE-KIRAN) aim to increase women’s participation in scientific research and engineering fields.

Structural Weaknesses in India’s R&D Ecosystem

1. Low national R&D expenditure: India spends only 0.65% of GDP on R&D, which is far below advanced economies and even lower than most BRICS countries except South Africa.
2. Weak private-sector participation in research: In many innovation-leading economies, industry drives the majority of R&D spending. In India, the state still carries a disproportionate share, showing weak corporate investment in long-term research.
3. Large gap in global patent scale: India’s patent filings are far lower than China’s 1.8 million applications and about 600,000 applications in the United States, showing limited technological influence.
4. Limited global patent protection by Indian innovators: Patent Cooperation Treaty (PCT) applications from India reached 4,547 in 2024, a 22% increase from 2023. However, this remains far below China (70,000+), the U.S. (54,000+), and Japan (48,000+).
5. Scale matters for global technological leadership: Even Switzerland filed more than 5,300 PCT applications, highlighting the gap between India and major innovation leaders.
6. Innovation challenge linked to talent gaps: Weak research workforce, limited knowledge-sector employment, and gender imbalance together show that India’s innovation constraints involve both funding and human-capital limitations.
7. Weak human capital base in innovation ecosystem:

• According to Global Innovation Index 2025, India ranks 95 in employment in knowledge-intensive sectors and 80 in the number of full-time equivalent researchers, showing a limited research workforce.
• It also ranks 101 among 119 economies in employment of women with advanced degrees, indicating weak gender diversity in high-level scientific research.

Weak Research–Industry Linkages and Commercialisation Challenges

1. Missing industrialisation base in development trajectory: India did not experience large-scale labour-intensive industrialisation similar to East Asian economies, which affected the development of strong manufacturing-led innovation systems.
2. Technology entrepreneurship remains limited: Many Indian unicorns depend on labour-intensive platforms rather than deep technology innovation, showing weak investment in long-gestation R&D.
3. Weak research commercialisation and technology transfer: Innovation achieves impact only when ideas move from laboratories to markets. In India, this stage remains weak as technology transfer systems, venture creation mechanisms, and risk-capital alignment between universities and industry remain underdeveloped.
4. High uncertainty in deep-tech entrepreneurship: High-technology innovation requires patient capital, strong intellectual property protection, and tolerance for failure, conditions that remain limited in India.

Way Forward

1. Greater private-sector leadership in R&D investment: Industry must invest in long-term and high-risk technological research to strengthen India’s innovation capacity.
2. Strengthening the research–industry–finance ecosystem: Innovation leaders build strong bridges between academia, industry, and financial capital. India must develop similar institutional connections.
3. Encouraging deep-tech and frontier technologies: The RDI fund can support deep-tech sectors, including emerging technologies with global impact.
4. Leveraging emerging sectors for innovation growth: Commercial space startups show promising progress, demonstrating the potential of private-sector technological entrepreneurship.
5. Preparing for future global technology standards: Participation in 6G technology standards and standard essential patents (SEPs) will reflect India’s ability to generate globally competitive technologies.

Conclusion

India has created strong policy support, funding mechanisms, and regulatory reforms for innovation. However, the real challenge lies in execution. Low R&D spending, weak private-sector investment, talent gaps, and poor research commercialisation continue to limit outcomes. Sustainable transformation requires industry-led R&D, stronger research–enterprise linkages, and long-term investment in deep technology, enabling India to build a truly innovation-driven economy.

Question for practice:

Evaluate whether recent government initiatives are sufficient to transform India into a true innovation-led economy despite persistent structural weaknesses in R&D, human capital, and research–industry linkages.

Source: The Hindu