{"id":85369,"date":"2026-09-23T18:07:16","date_gmt":"2026-09-23T12:37:16","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=85369"},"modified":"2026-09-23T18:07:53","modified_gmt":"2026-09-23T12:37:53","slug":"india-inc-rd-challenge-economic-liberalisation-global-competitiveness","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/23-09-2026\/india-inc-rd-challenge-economic-liberalisation-global-competitiveness","title":{"rendered":"India Inc\u2019s R&amp;D Challenge: From Economic Liberalisation to Global Competitiveness"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Recent corporate R&amp;D data shows that Indian companies are increasing their spend on innovation, but the quantum of investment is still not enough to match global competitors and develop sustainable technological competitiveness.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><a href=\"https:\/\/www.nextias.com\/ca\/editorial-analysis\/29-08-2026\/indias-rd-landscape-technological-capabilities\"><strong>India\u2019s Current State of R&amp;D Growth<\/strong><\/a><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>R&amp;D has increased substantially at the corporate level, with R&amp;D spending rising from <strong>around 150 in FY99 to 471 in FY26.<\/strong><\/li>\n\n\n\n<li>Total R&amp;D spending rose from <strong>\u20b9957.8 crore in FY99 to \u20b963,529.2 crore in FY26<\/strong>, recording a <strong>16.8% CAGR<\/strong>, faster than the 12.9% CAGR in net sales.<\/li>\n\n\n\n<li>However, intensity remains modest. R&amp;D accounted for <strong>0.91% of combined net sales in FY26<\/strong>, compared with <strong>0.36% in FY99<\/strong> and the historical peak of 1.15% in FY17.\n<ul class=\"wp-block-list\">\n<li>Only about half of the 471 companies reporting R&amp;D spent at least 1% of sales on it.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Post-1991 Reforms: Shift Towards R&amp;D<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The <strong>1991 BoP crisis<\/strong> was a reflection of India\u2019s inability to match foreign-exchange profits with expenditure. It exposed weak export competitiveness.\u00a0<\/li>\n\n\n\n<li><strong>Prior to reforms,<\/strong> Indian enterprises were predominantly domestic market orientated with limited attention to exports and global competitiveness.<\/li>\n\n\n\n<li><strong>Liberalisation <\/strong>sought to improve <strong>efficiency, competitiveness and integration with the global economy<\/strong>.<\/li>\n\n\n\n<li>Initially, corporate R&amp;D during the late 1990s and early 2000s focused substantially on <strong>absorbing imported technologies<\/strong>.\u00a0<\/li>\n\n\n\n<li>Subsequently, firms increasingly shifted towards developing indigenous products and solutions.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Why Does R&amp;D Growth Remain Inadequate?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Low R&amp;D Intensity:<\/strong> Spending by companies as a whole still lags behind the levels necessary for technical leadership.<\/li>\n\n\n\n<li><strong>Sectoral Concentration:<\/strong> Automotive and pharmaceuticals are dominant, but emerging global R&amp;D frontiers such as AI, IT and advanced computing are leading internationally.<\/li>\n\n\n\n<li><strong>Short-term Commercial Focus:<\/strong> R&amp;D is linked to profitability. 3-year average operating-profit increase is<strong> 70% correlated to R&amp;D growth.<\/strong><\/li>\n\n\n\n<li><strong>Weak Innovation Scale:<\/strong> In 2024 WIPO data, TVS Motors filed 283 patents during 2022-24, against <strong>20,783 by Huawei<\/strong>.<\/li>\n\n\n\n<li><strong>IT-sector Vulnerability:<\/strong> Top Indian IT firms have R&amp;D spend of just <strong>0.58% of sales in FY26<\/strong> even as AI threatens to automate various traditional services.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Related Efforts &amp; Initiatives<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In the <strong>post-reform economy<\/strong>, corporations have set up dedicated R&amp;D facilities, and are increasingly treating <strong>R&amp;D as a strategic investment.<\/strong>\n<ul class=\"wp-block-list\">\n<li>The emphasis of policy is changing from the absorption of technology to <strong>indigenous development of products, technology leadership and innovation<\/strong> as shown in the overall drive for increasing private sector participation in research.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Anusandhan National Research Foundation (ANRF): <\/strong>It was constituted by the <strong>ANRF Act, 2023<\/strong> with aims to boost India\u2019s research ecosystem and foster collaboration between<strong> academics, government and industry.<\/strong>\n<ul class=\"wp-block-list\">\n<li>Its purpose is to stimulate cross-disciplinary research and to increase the transfer of research into innovation and economic application.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Research, Development and Innovation (RDI) Support: <\/strong>Recent governmental initiatives have increasingly been focused on <strong>catalysing private sector R&amp;D<\/strong>, especially in deep-tech and emerging technologies.\n<ul class=\"wp-block-list\">\n<li>The goal is to close the gap between public research and commercial innovation by incentivising industry to invest in higher risk, longer term R&amp;D.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Industry-led R&amp;D Infrastructure: <\/strong>Indian corporations are increasingly establishing <strong>dedicated R&amp;D centres, technology campuses and product-development facilities<\/strong>.\n<ul class=\"wp-block-list\">\n<li>It represents a shift from merely absorbing imported technology to developing indigenous products and solutions.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Start-up and Deep-Tech Ecosystem: <\/strong>India\u2019s expanding start-up ecosystem provides a route for converting research into commercially viable technologies.\n<ul class=\"wp-block-list\">\n<li>Greater interaction between <strong>start-ups, established corporations, universities and research institutions<\/strong> can help overcome the traditional gap between invention and commercialisation.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Sector-specific Innovation Push: <\/strong>Sectoral Innovation Push: Innovation is increasingly associated with strategic sectors such as:\n<ul class=\"wp-block-list\">\n<li>AI and sophisticated computing;<\/li>\n\n\n\n<li>Defence and aerospace;<\/li>\n\n\n\n<li>Electric vehicles and alternative-fuel technologies;\u00a0<\/li>\n\n\n\n<li>Pharmaceuticals and biotechnology;\u00a0<\/li>\n\n\n\n<li>Semiconductors and electronics; and\u00a0<\/li>\n\n\n\n<li>Quantum technologies.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Academia\u2013Industry Linkages: <\/strong>A stronger innovation ecosystem requires universities and research institutions to collaborate with companies on <strong>joint R&amp;D, knowledge transfer, patents and product development.<\/strong>\n<ul class=\"wp-block-list\">\n<li>It can make academic research more responsive to the needs of industry and society.\u00a0<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Way Forward<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Increase <strong>private-sector R&amp;D intensity<\/strong>, particularly beyond pharmaceuticals and automobiles.<\/li>\n\n\n\n<li>Promote <strong>industry\u2013university\u2013government collaboration<\/strong> and commercialisation of research.<\/li>\n\n\n\n<li>Encourage long-term R&amp;D through stable policy support and risk-sharing mechanisms.<\/li>\n\n\n\n<li>Strengthen <strong>patent generation and intellectual-property capabilities<\/strong>.<\/li>\n\n\n\n<li>Push Indian IT firms towards AI, advanced computing and emerging technologies.<\/li>\n\n\n\n<li>Link R&amp;D with <strong>export competitiveness<\/strong>, so that innovation translates into globally competitive products.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Conclusion<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India has moved from a <strong>protected-market model towards greater technological ambition.<\/strong>\u00a0<\/li>\n\n\n\n<li>But, the central challenge remains converting rising R&amp;D expenditure into <strong>globally competitive patents, products and technologies<\/strong>, moving decisively from <em>\u2018Made in India\u2019<\/em> towards <em>\u2018Imagined and innovated in India\u2019.<\/em><\/li>\n<\/ul>\n\n\n\n<p><a href=\"https:\/\/www.business-standard.com\/specials\/news\/india-inc-failed-to-ramp-up-r-d-spends-despite-90s-economic-reform-push-126092201559_1.html\" rel=\"nofollow noopener\" target=\"_blank\">Source: BS<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>\n<strong> <\/p>\n<p>Context<\/p>\n<p> <\/strong>\n<\/p>\n<li class=\"ms-5\">\n<p>Recent corporate R&#038;D data shows that Indian companies are increasing their spend on innovation, but the quantum of investment is still not enough to match global competitors and develop sustainable technological competitiveness.<\/p>\n<\/li>\n<p><\/p>\n<p>\n<strong> <\/p>\n<p>India\u2019s Current State of R&#038;D Growth<\/p>\n<p><\/strong>\n<\/p>\n<li class=\"ms-5\">\n<p>R&#038;D has increased substantially at the corporate level, with R&#038;D spending rising from around 150 in FY99 to 471 in FY26.<\/p>\n<\/li>\n<li class=\"ms-5\">\n<p>Total R&#038;D spending rose from \u20b9957.8 crore in FY99 to \u20b963,529.2 crore in FY26, recording a 16.8% CAGR, faster than the 12.9% CAGR in net sales.<\/p>\n<\/li>\n<p><a href=\" https:\/\/www.nextias.com\/ca\/current-affairs\/23-09-2026\/india-inc-rd-challenge-economic-liberalisation-global-competitiveness\"   class=\"btn btn-primary btn-sm float-end\">Read More<\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-85369","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/85369","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=85369"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/85369\/revisions"}],"predecessor-version":[{"id":85371,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/85369\/revisions\/85371"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=85369"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=85369"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=85369"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}