Datanomics: R&D spends by India Inc lag global peers despite improvement

India has improved its ranking in the frontier technologies readiness index from 48th in 2022 to 36th in 2024 out of a total of 170 economies

Union Trade Minister Piyush Goyal recently chided India’s startups and expressed concern over the quality of innovation by them, comparing them to their Chinese counterparts. But beyond startups, even bigwigs of India Inc are spending measly amounts on research & development (R&D), even as the country is seeing success in scientific research, publications, and patent filings on frontier technologies like artificial intelligence (AI). 

India has improved its ranking on the frontier technologies readiness index from 48th in 2022 to 36th in 2024 out of 170 economies, with a score of 0.74 (on a scale of 0 to 1), according to a report by the United Nations Conference on Trade and Development (UNCTAD).  

Yet only 15 Indian companies were part of 2,000 global corporate R&D investors in 2023. These Indian firms contributed a meagre 0.43 per cent of the total R&D contribution by the top 2,000 private spenders on research. 

Tata Motors spent around euro€2.95 billion  on R&D, the highest among Indian companies. India’s pharmaceutical giants Sun Pharma and Dr. Reddy’s Laboratories spent euro€343 million and euro€241 million respectively in 2023. Alphabet Inc. of the US spent the most on R&D — euro€39.8 billion.  

Interestingly, India came third (behind US and China) on the R&D subparameter based on the number of published scientific papers and patents filed on frontier technologies such as AI, nanotechnology, and Internet of Things, according to the UNCTAD report.