The Economic Survey 2025–26 reports India’s Gross Expenditure on Research and Development (GERD) at about 0.64% of GDP, with the public sector providing over 60% of funding while private corporate share is roughly 36%.
GERD and Funding Profile
- GERD level: ~0.64% of GDP (2025–26); comparator economies (US, China, South Korea) allocate ~2.5–4.8% of GDP to R&D.
- Funding split: Public sector >60% of GERD; private corporate contribution ~36%.
- Central institutional shares: DRDO ~30.7%, Department of Space ~18.4%, ICAR ~12.4% of central R&D outlays.
Structural Causes
- Market insulation: Large domestic market reduces external competitive pressure, encouraging incremental innovation over frontier R&D.
- Historical deindustrialisation: Colonial-era disruption and post‑independence transition to services limited heavy industrial R&D capacity.
- Financialisation: Corporate emphasis on short-term returns, buybacks and dividends diverts capital from long-gestation deep‑tech projects.
- Policy and risk environment: Regulatory and adjudicatory uncertainties raise discount rates for decade‑long research investments.
Translation Bottleneck
- TRL concentration: Strong base at TRL 1–3 (basic research); limited private funding for TRL 4–9 (prototyping to commercial deployment).
- Valley of Death: Prototyping/piloting gap prevents conversion of academic outputs into marketable products.
- Research output vs commercialisation: India ranks third in S&E publications but lags in private‑led product scaling.
IASPOINT Booster Facts
- RDI Fund: ₹1 lakh crore Research, Development and Innovation Fund operationalised November 2025 for long‑term credit lines.
- ANRF Act 2023: Anusandhan National Research Foundation aims to mobilise ₹50,000 crore over five years with ~70% from non‑government sources.
- GII 2025: India ranked 38th in the Global Innovation Index (WIPO).
- ROPE recommendation: NITI Aayog proposes “Removing Obstacles and Promoting Enablers” to reform procurement and instrument acquisition.
- National slogan update: Phrase extended to include “Jai Anusandhan” to signal focus on research.