Sustaining India’s improving research output will require more spending & building a research ecosystem that can meet the needs of future generations. Public expenditure alone cannot provide that depth.
More than two decades ago, A.P.J. Abdul Kalam, addressing the Indian Science Congress in 2004, clearly defined what meaningful technological progress should ultimately achieve. Technology development, he said, is complete only when technology is transferred, absorbed and “productionised” to meet people’s needs. His concern was about the “last mile”; the journey from a laboratory breakthrough to a technology that is used. Twenty-two years later, this might be one of the most important issues confronting India’s development ambitions.
India aims to become a developed economy by 2047, which will require it to transition from a factor-driven economy to an innovation-driven, technologically advanced economy spanning semiconductors, AI, biotechnology, medical technology, agriculture, and energy security. Although these sectors have distinct policy frameworks, their success depends on a common denominator of a robust research, development, and innovation ecosystem that fosters knowledge generation and technology deployment. To achieve this, India must maintain momentum in expanding the R&D budget and ensure expenditure is directed towards capabilities that build deployable technologies.
India has begun investing more decisively in R&D, as in 2023-24, Gross Expenditure on Research and Development (GERD) reached Rs 2.45 lakh crore, its highest level ever, or equivalent to 0.84% of GDP, up from 0.64% in 2020-21. This share is expected to edge up to 0.90 % in 2025-26, according to the latest Research and Development statistics report. Yet as a share of GDP, India’s R&D intensity in 2023-24 was broadly similar to its level around 2008-09, an important turn but not yet a transformative one.
The improved expenditure numbers sit alongside a more dynamic story of output and innovation capacity have surged. In 2022, India produced over 2.07 lakh research articles, ranking behind China and the US in DST’s comparison. Publications grew at an annual rate of 10.25% over the decade, more than twice the global rate of 4.74%, while India’s share of papers among the world’s top 1% most cited rose from 0.62% in 2006 to 1.11% in 2022. Patents have also increased in the same direction. According to WIPO, patent applications filed worldwide by Indiabased applicants increased by 19.2% in 2024. The Global Innovation Index moved India from 81st in 2015 to 38th in 2025, marking it as an “innovation overperformer” by producing more innovative output than expected.
These gains point towards an improving research ecosystem that is producing more, but a deeper look at the composition of this R&D spending reveals a concentrated & siloed R&D investment structure. A key structural weakness is the concentration of public R&D across a relatively small set of ministries and institutions. Outside the major scientific agencies, key ministries within expenditure are heavily concentrated in a few ministries such as the Petroleum and Natural Gas (Rs 2,609.49 crore), Health and Family Welfare (Rs 1,540.42 crore), Heavy Industry (Rs 1,250.64 crore), and Power (Rs 1,031.45 crore), which record the highest expenditures on R&D in 2023-24. At the other end, ministries like MSME, Labour and Employment, Home Affairs and Chemicals and Petrochemicals have R&D expenditure allocated of less than Rs 10 crore.
This heterogeneity is also visible at sub-national levels. Tamil Nadu (Rs 1,214.50 crore), Karnataka (Rs 1,130 crore), Punjab (Rs 994.78 crore) and Gujarat (Rs 814.79 crore) have some of the highest R&D expenditures in absolute terms. However, relative to GDP, the situation is different: Himachal Pradesh leads at 0.27%, with only four other states exceeding 0.1%. This limited R&D intensity explains the broader per-person gap: India spends only $84.3 per capita, compared with China at $648.9 and the US at $2,826.
Sustaining India’s improving research output will therefore require more spending and building a research ecosystem that can meet the needs of future generations. Public expenditure alone cannot provide that depth and is well known. In the US and China, private enterprise accounts for more than 70 per cent of R&D expenditure. Over the last 2 decades, India has slowly moved in that direction, with private sector participation reaching 51.85 per cent in 2023-24; of which 77 per cent also remained concentrated in Transportation, pharmaceuticals, biotechnology, and information technology. Moreover, a GoI and IICA study similarly found that the top 20 firms accounted for roughly 71% of R&D expenditure among 912 major listed companies.
Although investment is naturally directed where sector capability and capacity are strongest, it can become a structural weakness when other strategically important sectors and regions lack the resources to build an R&D ecosystem. The priority cannot be more funding or increased allocation; it must be matched by capacities that build knowledge and convert it into technologies that can be tested, scaled, and deployed across the economy.
NITI Aayog’s 2026 assessment clearly illustrates these constraints. At the state level, the study highlights systemic and institutional capacity gaps, human resource and academic ecosystem constraints, lack of grassroots support, and weak centre-state collaboration. On the industry and research level, the study identifies limited infrastructure in the crucial Technology Readiness Level 3-6 range, including gaps in prototyping, pilot-scale validation, testing, certification and technology transfer. This is precisely the space captured by Kalam’s idea of the “last mile”. More publications, patents, and research funding can expand the knowledge stock, but, by themselves, do not ensure that a technology will survive validation and scale to become a commercially viable solution.
Together, these weaknesses create a constrained “missing middle” in India’s innovation system, limiting the capacity to translate a growing research and scientific base into scalable technologies and domestic production capabilities. India’s next R&D phase must focus on widening this middle. The Rs 1-lakh-crore Research, Development and Innovation Scheme and the Anusandhan National Research Foundation can provide part of that architecture, but they alone will not be enough to realise the potential of the country’s innovative capabilities.
Private-sector participation in funding R&D, accompanied by stronger testing and pilot facilities, technology transfer institutions and deeper industry research partnerships, remains essential. Otherwise, India risks becoming highly adept at deploying sophisticated technologies while much of the knowledge underpinning them continues to accumulate elsewhere. The next technological transition must move beyond catching up with frontiers developed elsewhere and build the research depth, institutional capacity and industrial absorption needed to shape the frontiers demanded by its own economic, health, environmental and strategic priorities.
*Amit Kapoor is Chair& Nabha Joshi is Senior Researcher atthe Institute for Competitiveness.X: @kautiliya.
