India's research and development spending has reached a historic milestone of 0.84% of GDP in 2023-24, marking a significant shift in the country's innovation landscape. According to the latest figures released by the Department of Science and Technology, this achievement represents a fundamental change from the traditional government-dominated research approach that characterized most of independent India's history. The private sector's growing investment pace indicates an economy expanding with confidence, as industry begins to place serious bets on its own technological ideas and capabilities, with the private sector's share rising dramatically from 32% in 2020-21 to 45% in just three years.
A critical comparison reveals the scale of India's challenge ahead. In 2007, China's GDP per capita was $2,700 — very close to India's current position — but China's R&D intensity was nearly double India's at 1.49% of GDP. Between 2007 and 2024, China's GDP grew 5.5 times, while its private-sector R&D expanded more than 10 times. This pattern demonstrates that R&D intensity is not a byproduct of reaching the technological frontier, but rather the fundamental driver that enables such progress. Since 1990, only 34 middle-income economies have reached high-income status, while 108 remain stuck, with countries like Japan, South Korea, and Taiwan investing heavily in research when their incomes were around where India's is today.
India's Viksit Bharat vision faces a pivotal moment requiring strategic R&D deployment. The country needs to reach 2% of GDP in R&D by 2035, with industry providing 70% of that investment. A meaningful intermediate milestone targets 1.3% of GDP by 2030, with corporate share rising to at least 60%. The government has established foundational mechanisms through the Anusandhan National Research Fund (ANRF) and Research, Development and Innovation Fund (RDIF) to absorb early-stage research risk and provide industry with catalytic capital. As reported by Business Standard, the government must also increase its R&D expenditure to 0.5% of GDP by 2030 and 0.6% by 2035, up from approximately 0.4% today, while higher education funding needs to increase to 15-20% of India's R&D spend, currently receiving only 12.6%.
Three critical areas require immediate attention to accelerate India's R&D capabilities. Higher education funding needs to increase to 15-20% of India's R&D spend, currently receiving only 12.6%. The report emphasizes the need for fewer, larger, longer-horizon technology capability-focused national missions rather than fragmented grants, with matched private capital and serious translational capabilities between lab-scale research and market-ready products. With Indian industry reaching genuine scale, new trade agreements opening global markets, and tariff barriers coming down, India will need to compete at the global frontier, requiring industry to innovate and back risky ideas. The government's recent establishment of the ANRF and RDIF represents a good start, not a finish line, in this transformation process.
Several Indian companies demonstrate the potential for transformative R&D investments. Glenmark made a sustained $1 billion commitment over a decade to a single proprietary antibody platform, resulting in ISB 2001 for treating advanced blood cancers, licensed to AbbVie in 2025 for up to $1.9 billion. Skyroot Aerospace built its own rocket propulsion technology from scratch, with Vikram-1 becoming the first privately developed Indian rocket to reach orbit, valuing the company at over $1.1 billion. These success stories demonstrate the playbook exists, with industry now needing to decide whether to scale such risk-taking approaches to achieve India's Viksit Bharat ambitions. The countries that made the leap from middle-income to high-income status — Japan, South Korea, Taiwan — all invested heavily in research when their incomes were around where India's is today, accelerating that investment as growth compounded.
