The global contest for technological supremacy is increasingly being fought in laboratories, computing facilities, and advanced manufacturing plants. China’s expenditure on research and development reached 3.93 trillion yuan in 2025, equivalent to approximately $584.5 billion at market exchange rates. According to its National Bureau of Statistics, expenditure increased by 8.2%, taking R&D intensity to 2.80% of GDP, above the OECD average of 2.72%.

America is approaching the same contest from a different direction. OpenAI has argued that $1 trillion invested in artificial-intelligence infrastructure could generate an additional 5% of American GDP. This is a company projection, not an independently established economic outcome, but it captures the scale of the opportunity perceived in AI infrastructure, semiconductors, energy systems, and associated industries.

India’s position is more troubling. Its gross domestic expenditure on R&D rose to approximately ₹2.45 lakh crore in 2023-24, yet represented just 0.84% of GDP. The country has expanded its research spending in absolute terms, but remains far behind major technology economies in the share of national resources committed to developing new knowledge.

The central issue is not whether India can produce talented engineers or launch sophisticated missions. It has demonstrated that it can. The question is whether it is willing to invest consistently enough in the scientific, industrial, and institutional foundations that turn talent into globally competitive technology.

A historical irony

For centuries, extending into the early modern period, the Indian subcontinent was among the world’s major economic and intellectual centres. Indian contributions to mathematics, astronomy, metallurgy, medicine, and engineering were substantial, while its textiles, metalwork and other manufactured goods circulated across international markets. Knowledge and commerce existed alongside one another, helping sustain India’s importance in the world economy.

Modern India has recovered considerable economic weight but has not recreated that relationship between scientific capability and industrial leadership across enough sectors. It has achievements in space exploration, pharmaceuticals, information technology, and digital infrastructure, yet remains dependent on foreign technologies in several advanced industrial fields.

The comparison with the past should not romanticise earlier periods or suggest that historical scientific traditions were equivalent to modern industrial research. Its relevance is more fundamental: economic power and technological capability must reinforce each other. India cannot rely on historical achievement, demographic scale, or a large engineering workforce to guarantee future leadership. It must build institutions that continually generate and commercialise new knowledge.

The research-spending divide

International comparisons of R&D require care because exchange rates, purchasing-power adjustments and statistical definitions can produce different rankings. Nevertheless, the broad picture is unmistakable. China and the United States each performed more than $1 trillion of R&D in purchasing-power-parity terms in 2024, according to the comparative figures cited in international research assessments. India’s corresponding expenditure was approximately $75.7 billion.

Research intensity makes the contrast even clearer. India’s 0.84% of GDP in 2023-24 compares with China’s 2.80% in 2025, America’s 3.44%, Japan’s 3.62% and South Korea’s 5.13% in the cited comparisons. These figures refer to different reporting years, but the scale of the gap is too large to dismiss as a statistical artefact.

India is not simply spending less than the leading economies; it is allocating a smaller proportion of its economic resources to building future technological capabilities. That matters because research is cumulative. Laboratories require continuous funding, researchers need sustained careers, experiments must be repeated, and promising discoveries often take years to become commercially viable products.

A country that invests inconsistently risks losing not only individual projects but entire generations of scientific expertise. The resulting disadvantage may become visible only years later, when domestic manufacturers discover that critical components, industrial processes or intellectual property remain controlled by overseas suppliers.

India need not blindly copy China’s system. It must, however, recognise the advantage that long-term investment gives a country seeking to compete at the technological frontier.

The Indian talent paradox

India’s most striking contradiction is that its people often flourish in research-intensive environments abroad. Satya Nadella leads Microsoft, Sundar Pichai leads Alphabet, and Indian-origin professionals occupy senior positions across global technology, finance and scientific research. Their success reflects individual ability, but also the institutions, capital markets, professional networks and research ecosystems in which their careers developed.

The economic position of the Indian diaspora in America reinforces the point. Pew Research Center estimated that Indian-headed households in the United States had a median annual income of $151,200 in 2023. The Migration Policy Institute reported a median household income of $176,200 for Indian immigrant-headed households in 2024. Although the figures cover different populations and years, both illustrate the community’s economic success.

These outcomes cannot be attributed to education or national origin alone. Immigration selection, occupational concentration, advanced qualifications and access to high-paying industries all matter. Yet the comparison raises a legitimate question: why does India produce people capable of leading some of the world’s most sophisticated technology enterprises without creating enough domestic companies operating at comparable technological depth?

The answer is partly institutional. In advanced research environments, scientists and engineers can access sophisticated equipment, experienced technical teams, venture capital, demanding customers and organisations prepared to finance long development cycles. India has examples of such environments, but they are not sufficiently widespread.

The challenge is therefore larger than preventing brain drain. India must create conditions in which ambitious researchers and entrepreneurs can build globally competitive technologies at home. That requires more than producing graduates; it requires financing research, supporting experimentation and rewarding original intellectual property.

Corporate India must invest

The government cannot carry the research burden alone. Private industry’s contribution to Indian R&D expenditure increased from 39.7% in 2020-21 to 45.2% in 2023-24, an encouraging development. But the business sector still needs to assume a much larger role if India is to approach the research intensity of leading industrial economies.

Too many companies compete primarily through distribution, imported technology, licensing, assembly or white-labelling rather than original product development. White-labelling is a legitimate commercial strategy, and contract manufacturing can build valuable industrial skills. The problem arises when these become permanent substitutes for developing proprietary designs, engineering expertise and intellectual property.

A company that imports a foreign product, changes its branding and sells it domestically may create commercial value, but it does not necessarily develop control over the technology inside it. Likewise, assembling imported components does not automatically create the capability to redesign or manufacture them competitively.

India needs more companies prepared to invest in laboratories, advanced testing, research teams and long-term product development. That requires patient capital and an acceptance that some research projects will fail before others succeed. It also requires a change in business incentives. If short-term margins, financial engineering and privileged market access are more attractive than investing in technological capability, businesses will rationally avoid research.

Profit is essential to innovation, but commercial success based on existing products is not the same as creating new technologies. If corporate India continues to prioritise immediate returns over original research, increased public expenditure alone will not transform the country’s technological position. Public-private cooperation must involve shared investment, technical accountability and a credible route from discovery to production.

Universities: research versus rhetoric

India’s research ecosystem is not uniformly weak. IITs and several other institutions undertake serious scientific work, develop technologies and transfer them to industry. IIT Bombay and IIT Madras, for instance, have established mechanisms for industry collaboration, intellectual-property licensing and technology transfer. Yet alongside these institutions are others that increasingly advertise artificial intelligence, quantum computing, robotics and semiconductors without necessarily possessing the faculty, laboratories or research programmes required to support such claims. For institutions seeking to attract students, fee revenue and research funding, technological buzzwords can become marketing devices rather than evidence of scientific capability.

This disparity matters because India’s research resources are limited. Funding and student demand should reward credible research, qualified faculty, functioning laboratories, reproducible results and technologies adopted by industry, rather than attractive brochures. Education reform must reinforce this objective by restoring pure science as a prestigious academic path, strengthening research-oriented undergraduate programmes, expanding doctoral fellowships and providing credible scientific careers. Management education remains valuable, but low-quality qualifications cannot substitute for deep technical expertise. Universities must be rewarded for rigorous discovery, while companies must offer scientists meaningful research roles and invest in translating knowledge into products.

Defence innovation needs accountability

India has created several mechanisms to support indigenous defence technology, including iDEX and its DISC and ADITI programmes, DRDO’s Technology Development Fund, and innovation initiatives run by defence public-sector undertakings. These are valuable channels for funding startups and developing technologies that may otherwise struggle to attract capital, but they cannot compensate for inadequate national research investment. Their success should be measured by prototypes that pass testing, meet operational requirements and progress towards production, not merely by grants awarded. Concerns about favouritism or corruption require specific evidence, but transparent selection criteria, independent technical assessment, conflict-of-interest safeguards, reasoned decisions and credible grievance mechanisms are essential to maintaining innovators’ confidence. Ultimately, defence grants must connect research to testing, manufacturing and procurement if they are to reduce India’s dependence on foreign technology.

What India must do

India should pursue a credible path towards R&D expenditure of 1.2–1.5% of GDP by 2030, followed by a longer-term move towards 2%. This requires predictable multi-year support for universities and public laboratories, combined with incentives that encourage private companies to undertake genuine domestic research. Government procurement can help create markets for promising technologies, while specialised institutions should bridge the gap between laboratory prototypes, certification and commercial production.

Investment should focus on areas where scientific and industrial capabilities reinforce each other, including artificial intelligence, semiconductors, advanced materials, energy storage, space systems and autonomous technologies. These fields can generate commercial opportunities while strengthening national security and supply-chain resilience.

Progress must be measured through outcomes: technologies licensed to industry, products commercialised, exports generated, critical imports replaced and researchers retained in India. Expenditure and patent totals are useful indicators, but neither guarantees a competitive technology industry. Research funding must be accompanied by institutional quality, industrial demand and accountability for results.

The price of waiting

India’s present R&D deficit cannot be understood without confronting the missed opportunities of the 1980s and 1990s. The country had established early capabilities in several strategic technologies, but too often failed to sustain the investment, infrastructure and industrial partnerships needed to turn them into lasting global advantages.

The Semiconductor Complex Limited facility at Mohali, established in 1984, suffered a devastating fire in 1989, followed by delays and constraints that weakened its development. The PARAM 8000 supercomputer, developed in 1991, demonstrated India’s ability to build advanced computing systems, but the challenge of converting such achievements into a broad, commercially competitive technology industry remained. The creation of the Department of Biotechnology in 1986 established an institutional foundation, yet building a globally competitive biotechnology ecosystem required stronger links between research, intellectual property and commercialisation. In advanced materials and rare earths, limited downstream processing and value addition constrained the benefits India could capture from its resources. C-DOT’s indigenous rural telephone exchanges, by contrast, achieved substantial deployment, demonstrating what sustained development and technology transfer could accomplish; the broader lesson is that indigenous innovation must be scaled and continually upgraded rather than abandoned when market conditions or policy priorities change.

These histories should not be reduced to a single explanation or treated as evidence that every early initiative failed. They reveal a recurring risk: scientific breakthroughs do not automatically become durable industrial advantages. Underinvestment, policy discontinuity, bureaucratic delays, inadequate infrastructure and weak commercialisation can allow early leads to narrow or disappear. The mistakes of the past are haunting India today because the cost of failing to scale technology is often paid decades after the original opportunity.

The choice is whether India wishes to remain a sophisticated market for technologies invented elsewhere or develop the capacity to create them. Raising R&D expenditure towards 1.2–1.5% of GDP by 2030, with a credible path towards 2%, would be an important beginning—but only if public funding is matched by private-sector investment, rigorous science education, effective research institutions and the ability to take innovations from laboratory to factory.

India has repeatedly demonstrated that it can achieve technological breakthroughs. Its challenge is to ensure that the next breakthrough does not remain an isolated achievement, but becomes the foundation of an industry, an export capability and a lasting strategic advantage. The decisive question is not whether India can afford to spend more on research. It is whether India can afford not to.