India’s expenditure on R&D just 0.6 percent of GDP: Economic Survey
Private sector synergy and ‘translation’ at scale a hurdle, not talent shortage
By Samreen Wani
Last Updated: Jan 29, 2026, 20:53 IST2 min
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India’s gross expenditure on research and development (R&D) remains stuck at approximately 0.64 percent of GDP, says the Economic Survey 2025-26. This figure is significantly lower than the 2.5 to 5 percent range of innovation-led economies like the US, China and Israel.
The Survey clarifies that India’s R&D gap stems not from a lack of talent, but from minimal private sector participation and a failure to translate research into scalable commercial products. While the country excels at early-stage research—technology readiness levels (TRL) 1-3—but an industrial economy requires TRL 7-9 products ready for market deployment. The intermediate stage—prototyping, piloting and characterisation, which constitutes the “valley of death”, is where Indian innovation consistently stagnates.
In today’s global economy, innovation has transcended its role as a productivity driver to become the primary currency of national security and geopolitical leverage. And recognising this critical gap, Prime Minister Narendra Modi operationalised the Rs1 lakh crore Research, Development and Innovation (RDI) Scheme in November 2025, reflecting the government’s commitment to incentivise private sector innovation.
The Economic Survey proposes complementing this with Translational Research Centres (TRCs)—for piloting and prototyping that would reduce the cost and risk of testing, validating and scaling new technologies for startups, MSMEs, industry and academic institutions.
The Survey emphasises that innovation reforms must be holistic and systemic, addressing not just research funding but also translation, adoption and scale.
This focus on R&D is important as India has emerged as the world’s third-largest producer of scholarly publications, vaulting from seventh position in 2010, while simultaneously climbing to 38th in the Global Innovation Index from 66th in 2019. Bengaluru, Delhi and Mumbai feature among the world’s top 50 most innovation-intensive clusters, while the country has become a significant intellectual property player—ranking fourth in trademarks, sixth in patents and seventh in industrial designs globally in 2024, says the Survey.
From FY20 to FY25, patent applications nearly doubled, trademark registrations grew 1.5 times and design registrations increased 2.5-fold. The surge in design registrations alongside patent activity suggests a shift toward differentiated products, process innovation and branding.
Innovation activity now spans biotech, artificial intelligence, digital services and sustainability solutions, supported by growing risk capital, credit access, and incubator-led support to startups—signalling a system graduating from niche research into a broader industrial base.
Read Forbes India's complete Budget 2026-27 coverage here
First Published: Jan 29, 2026, 20:53
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