India has long punched below its weight in global research and development (R&D), and the consequences are clear: we miss out on creating transformative innovations like DeepSeek, the Chinese AI model rivaling OpenAI’s ChatGPT.
According to the Economic Survey 2025, India's R&D remains heavily skewed toward basic research rather than applied research, limiting the practical applications needed to attract private investment.
This gap has kept India from emerging as a global leader in AI, semiconductors, and deep-tech industries. While other nations have built robust industry-academia ecosystems to commercialize research, India’s innovation pipeline often stops short of market-driven breakthroughs.
India offers grants, loans, tax exemptions, and patent-related incentives, alongside initiatives like Start-Up India, Digital India, and the Atal Innovation Mission. However, these incentives have yet to generate the level of private R&D investment seen in China, South Korea, or the US.
The Economic Survey 2025 highlights how global R&D incentives differ:
Beyond limited funding, India's industrial R&D is concentrated in a few sectors, mainly pharmaceuticals, IT, transportation, defence, and biotechnology. Public sector R&D remains defence-heavy, while futuristic areas like AI, clean energy, and semiconductors receive comparatively little attention.
The Economic Survey stresses the urgent need to bridge this gap:
"Historically, India's R&D focus has been on basic research rather than applied research. This often lacks the practical applications needed to attract private investment (DST, 2020). This gap needs to be bridged to streamline and drive innovations and investment across multiple sectors."
The report underscores three critical areas for improvement:
While India’s Viksit Bharat vision requires deep-tech innovation, the private sector must also step up to the R&D challenge wholeheartedly. Without this shift, India risks remaining a consumer rather than a creator of next-gen technologies.