GS III: Awareness in the fields of IT, Space, Computers, robotics, nano-technology, bio-technology.
Context: According to the Department of Science and Technology (DST), private industry accounted for 51.8% of India’s Gross Expenditure on Research and Development (GERD) in 2023–24, surpassing government spending for the first time.
Key Highlights
- Private Sector Leads R&D: Private industry contributed 51.8% of national R&D expenditure, marking a historic shift in India’s innovation ecosystem.
- Industry Employs More Researchers: The private sector now employs more core researchers than government research institutions.
- Leading R&D Sectors: Transport, Pharmaceuticals, Biotechnology, and Information Technology (IT) emerged as the largest corporate investors in research.
- Sharp Increase in R&D Spending: Total R&D expenditure increased from ₹1.27 lakh crore (2020–21) to ₹1.95 lakh crore (2021–22), driven by a substantial rise in private investment.
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Reasons Behind the Increase
- Post-Pandemic Competitiveness: Industries increasingly recognised research and innovation as essential for long-term competitiveness.
- Improved Reporting Standards: Mandatory Business Responsibility and Sustainability Reporting (BRSR) and stricter RBI disclosure norms have improved the reporting of corporate R&D expenditure.
- Emerging Technology Investments: Increased investments in Artificial Intelligence (AI), semiconductor design, and electronics manufacturing have contributed to higher R&D spending.
Concerns
- Low R&D Intensity: India’s GERD remains only 0.84% of GDP, significantly below countries such as China (2.58%), United States (3.45%), and South Korea (4.94%).
- Shortage of Researchers: India has around 354 researchers per million population, far below leading innovation economies.
- Measurement vs Actual Investment: Part of the recent surge reflects better accounting and reporting practices, rather than entirely new research investments.
- Limited Research Prioritisation: Many firms continue to spend more on marketing and advertising than on research and innovation.
Significance
- Strengthens Innovation Ecosystem: Higher private participation reduces excessive dependence on public funding for research.
- Supports Advanced Manufacturing: Increased industrial R&D can accelerate high-value manufacturing, technological self-reliance, and global competitiveness.
- Promotes Industry–Academia Collaboration: Greater corporate investment can improve technology transfer and commercialisation of research.
- Advances Atmanirbhar Bharat: Stronger domestic innovation supports India’s transition towards a knowledge-based economy.
Government Initiatives
- Anusandhan National Research Foundation (ANRF): Established to strengthen research and promote collaboration among government, academia and industry, with a proposed ₹50,000 crore corpus.
- National Research Foundation (NRF) Vision: Encourages private-sector participation in research, innovation and technology development.
- Semicon India Programme: Promotes semiconductor manufacturing and chip design ecosystem in India.
- National Deep Tech & AI Initiatives: Support emerging technologies through innovation, startups and industry partnerships.
Way Forward
- Increase R&D Investment: Raise national R&D expenditure towards 2% of GDP through greater public and private participation.
- Expand Skilled Research Workforce: Strengthen higher education, doctoral research and industry-oriented skill development.
- Promote Industry–Academia Partnerships: Encourage collaborative research, technology incubation and commercialisation.
- Support Deep-Tech Innovation: Prioritise investments in AI, semiconductors, biotechnology, quantum technologies and advanced manufacturing.
- Improve Research Financing: Expand innovation funds, tax incentives and venture financing for research-intensive industries.
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Conclusion
Private sector-led R&D is a positive step towards an innovation-driven economy. Sustaining this momentum requires higher research investment, stronger industry–academia collaboration, skilled human capital, and effective implementation of the ANRF to boost technological self-reliance and advanced manufacturing.
6 Aug 2026
