How much does India invest in research?

India Jun 28, 2021

While the Indian Government has been able to make commendable efforts towards the Sustainable Development Goal (SDG) , India remains to have grey areas in terms of industry, innovation and investment in research.

The UNESCO Science Report which is made every five years to monitor trends, developments, national and regional policies etc was recently made for India. Data on research funding was strikingly low, according to the report India has one of the lowest GDP ratios amongst the BRICS countries. The gross domestic expenditure on research (GERD) has been 0.7% of the GDP since years. This kind of stagnation is concerning.

“India's research intensity has been declining since 2014. The Science and Technology Policy of 2003 fixed the threshold of devoting 2% of GDP to research and development (R&D) by 2007. This target date was set back to 2018 in the new Science, Technology and Innovation Policy (2013) then again to 2022 by the Economic Advisory Council of the Prime Minister." it noted. And in 2020, the task force making the new Science and Technology policy recommended pushing the date to a more realistic 2030.

A high expenditure on R&D correlates to high technology exports. India stands at 9.1% and to move up the manufacturing chain, there is a need to increase this expenditure especially in import dependent sectors. According to the government’s Invest India report, "each $1 million invested in R&D in India per annum by multinational corporations is very likely to generate a demand for around eight to ten researchers."

R&D in the Government sector has been steadily declining since 2015 whereas the share of private enterprises in it has shot up to 42%. Now, in theory this might be a positive trend but R&D is mainly focused in sectors like pharmaceuticals, automotive, and information technology. Even in these sectors the firms are low in number.

16% of private-sector investment in R&D in 2019 was seen to be done by foreign multinationals. The UNESCO report also noted that the majority of the software patents were taken away by MNCs operating from India while pharma patents were obtained by domestic firms.

One of the suggestions which stood out in this report was the improvisation of links between start-up ecosystems and manufacturers to aid technological development in sectors where India has global presence. India has the 3rd largest startup ecosystem in the world and is expected to witness consistent annual growth of 12-15%. In 2019, 2-3 startups were born every day. Therefore this link could be highly beneficial to the country.

Economies worldwide have graduated in the production chain from low and middle technology exports and have shifted focus on R&D-related high technology exports which began to bring in greater foreign exchange income.

Private-public partnerships in lines with national innovation and industrial strategies such as China’s Industry-Research Strategic Alliances,  Germany´s Innovation Alliances, Israel´s Magnet Consortium are all worth looking into as well.

On the brighter side, the increase in scientific publications by Indian researchers has risen from 80,458 in 2011 to 1.61 lakh in 2019. Indian researchers are publishing between 1.5 and 1.8 times the global average.

But the need for an increase in expenditure in R&D still remains constant.

This article has been written by Sr. Content Editor Riya Rajayyan for The Paradigm.

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