Quantum shift: On private industry and national research spending
The Department of Science and Technology’s latest figures on India’s research profile record a milestone. In 2023-24, private industry accounted for 51.8% of national research spending — a first in India’s history — overtaking all tiers of government combined for the first time. Moreover, industry now employs more core researchers than government institutions. Transport firms are the largest corporate investors, followed by pharmaceuticals, biotechnology and information technology (IT). The break from the past is sharp. Through the 2010s, private industry contributed a little over a third of national R&D, and the ratio moved slowly. Then, between 2020-21 and 2021-22, private spending nearly doubled — from ₹46,388 crore to ₹82,975 crore — and total R&D jumped from ₹1.27 lakh crore to ₹1.95 lakh crore in a single year. R&D spends in the transport sector, which barely registered before 2020, has roughly tripled and leads the triumvirate that includes biotechnology and IT that are counted among India’s most research-intensive industries. Officials attribute this to a post-pandemic realisation that research is essential to competitiveness, and that may be part of the story. The purported investments for ‘23-’25 also look healthy, but a change concentrated in one year looks less like a shift in corporate behaviour and more like a change in what is counted. Mandatory sustainability disclosures for large listed firms, and tighter RBI norms on reporting research, took effect at the same moment. Spending that was always occurring — in the foreign subsidiaries of Indian companies, and in the captive centres of multinationals — is only now being fully captured. Some of the surge, in other words, reflects better measurement rather than more money. Genuinely new capital is flowing too — into artificial intelligence, chip design and semiconductor fabs — though much of that is still infrastructure building and may not yet belong in the R&D column. India’s R&D stands at 0.84% of GDP, against 2.58% for China, 3.45% for the U.S. and 4.94% for South Korea; it fields 354 researchers per million people where South Korea and Israel field several thousand. The private sector’s own priorities are a further reason for caution: more was spent on advertising than on research in 2023-24. The shift will prove worthwhile if it deepens India’s pool of specialised workers and its capacity for sophisticated manufacturing, carrying the economy beyond its long reliance on supplying low-cost services. That depends less on how spending is recorded than on how many researchers the country can train. The Anusandhan National Research Foundation, with a ₹50,000-crore corpus largely to be raised from private sources, was created for precisely this purpose. Its promise now rests on delivery. Published - August 06, 2026 12:10 am IST Read Comments Copy link Email Facebook Twitter Telegram LinkedIn WhatsApp Reddit READ LATER SEE ALL Remove Related Topics science and technology / India / research / government / transport / pharmaceutical / biotechnology / computing and information technology / Coronavirus / Reserve Bank of India / Artificial Intelligence / semiconductors and active components / China / USA / South Korea
- 1The Anusandhan National Research Foundation was established under the Anusandhan National Research Foundation Act, 2023, passed by Parliament to mobilise a fifty-thousand-crore-rupee corpus, seventy percent of which is meant to come from non-government sources. Its governing board is chaired by the Prime Minister, giving research funding unprecedented political visibility at the apex of government. The editorial's point that the foundation's promise 'rests on delivery' reflects the broader challenge of translating legislative intent into functioning grant-disbursal machinery.
- 2The new capital flowing into artificial intelligence, chip design and semiconductor fabrication ties into the India Semiconductor Mission, launched in 2021 with an outlay of about seventy-six thousand crore rupees to build domestic fabrication capacity. This policy push aims to reduce India's dependence on imported chips, a vulnerability exposed during the global semiconductor shortage of 2021, and complements the Production Linked Incentive scheme for electronics manufacturing. Whether private R&D spending in this space becomes durable capability or remains infrastructure building, as the editorial cautions, will shape India's position in global technology supply chains.
- 3The editorial links the reporting surge to regulatory changes such as the Securities and Exchange Board of India's Business Responsibility and Sustainability Reporting framework, mandatory for the top one thousand listed companies since 2021-22, alongside tighter Reserve Bank of India disclosure norms on cross-border transactions. These rules compelled firms, including foreign subsidiaries and multinational captive centres operating in India, to report research spending that was previously untracked. Such disclosure-driven data shifts recall how corporate social responsibility reporting under Section 135 of the Companies Act, 2013 first revealed the true scale of CSR spending.
- 4India's research intensity remains low at 0.84 percent of GDP, compared with 2.58 percent for China, 3.45 percent for the United States and 4.94 percent for South Korea, while fielding only 354 researchers per million people against several thousand in South Korea and Israel. Private R&D spending nearly doubled from forty-six thousand three hundred eighty-eight crore rupees to eighty-two thousand nine hundred seventy-five crore rupees between 2020-21 and 2021-22, pushing total national R&D to one point nine five lakh crore rupees in a single year. Yet firms spent more on advertising than research in 2023-24, underscoring a persistent gap between financial capacity and research culture.