Some of India’s largest companies spent over ₹17,300 crore on R&D in FY24, about 23 percent more than what they did in FY22. But this jump has meant little as spending on research and innovation remains less than a meagre 1 percent of the companies’ net sales, a trend unchanged since FY21.
While the automobile and pharma sectors continue to have higher R&D spends, analysis shows that the share of pharma in the total spending on research has shrunk in FY24 to about 12 percent from 19 percent in FY21. The share of IT-software in total R&D spending has declined from 4 percent in FY21 to under 3 percent in FY24. Moreover, companies in sectors such as IT-hardware, textiles, tyres, e-commerce/app-based aggregator, telecom and electronics did not show any R&D investment in FY24.
A slower growth rate and a higher dependence on the public sector in R&D spends has meant that India continues to lag behind most emerging and advanced economies in terms of research spending.
Even automobiles and pharma—the two sectors with the highest R&D expenditure—also spend only 1% on innovation
The share of pharma in total R&D expenditure each year shows a downward trend while automobile sector made some gains
Compared to most advanced and emerging market economies, India shows lower spends on innovation relative to the size of its economy
A smaller contribution from the private sector, 37% compared to 78% from China, is a significant reason why R&D spends lag in India
First Published: Aug 04, 2025, 12:00
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