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RIO Country Report India 2015

RIO R&I International Country Reports analyse and assess the research and innovation system, main challenges, framework conditions, regional R&I systems, and international co-operation, including with the European Commission's Joint Research Centre (DG JRC).



1. Overview of the R&I system

India is the fourth largest economy and is one of the fastest growing economies in the world. After witnessing economic growth rate at an average of 8.3% per year for 2004/05 to 2011/12,India’s growth rate decelerated during 2012 and 2015 to around 6.4% per year. India is spending around 0.9% of GDP for R&D and this figure has stagnated over the last decade. Government sources account for two-thirds of GERD and one-third by business enterprises. India’s national innovation system is quite intimately integrated with high-level political system. Under the overall administrative and executive control of the Prime Minister’s Office (PMO), the structure of the S&T system operates in a coordinated and consultative mode.India’s leading S&T sectors are space research, nuclear energy, defence R&D, pharma and agricultural research. In recent years, the business enterprise sector assumed considerable importance with global comparative advantage in pharmaceuticals, automotive, software, telecommunications and biotechnology. The other sector, which witnessed robust growth and expansion, is telecommunications with more than 950 million mobile subscribers and more than 200 million internet users. The new government in 2014 identified a number of National Flagship Programmes such as: Make in India; Digital India; Skill India; Smart Cities and Urban Development; Clean India; and Creating New Infrastructure. These techno-economic programmes have the main objective of creating employment and aid the pattern of inclusive growth.

2. Public and private funding of R&I and expenditure

Government S&T and R&D institutions, by and large, dominate India’s National Innovation System (NIS). The overall R&D expenditure doubled during 2007 and 2014, but it has not kept in pace with its GDP growth. Where as India’s R&D intensity stagnated relatively around 0.9% in the last decade, China’s figure surged to over 1.8% in 2015. However, the government has committed to increase the GERD to 2% of GDP. Government meets around 64.4% of GERD, 35.6% comes from business enterprises sectors.  Out of the total funding, 48% comes from central government, 7% from state governments, 5% from state public enterprises and 34% from business enterprises. International and other funding accounts for mere 2%. Two main type of funding arrangements operate, namely, block or institutional funding and project based funding. The latter is operated on competitive basis accounts for about 20% of the government funding. The Seven flagship programmes introduced by government in 2014-2015 have generated considerable demand through public procurement in R&D and innovation both for Indian and international firms and agencies. All projects under the flagship programmes are awarded on competitive basis. The new government from 2015 has brought in considerable transparency in award of projects across various sector of economy, particularly in ICT and telecommunications, mining, infrastructure and railways. India has become one of the attractive destinations for multinational firms to set-up R&D centres or labs.

3. Framework conditions for R&I

Providing employment to Indian youth has become a big challenge for the country and government. The Prime Minister inaugurated an Action Plan for Start-up India and Stand-up India, which included a series of policies and measures to encourage start-up activity, particularly for youth. India stands at 130th Rank out of 189 countries in ‘doing business’.  The government in 2015 has taken several steps towards ‘ease of doing business’ in India. India has opened up its economic corridors for FDI ranging from 40 to 100% across various sectors including defence. Two major shifts can be seen in the last two years. The government has given a renewed policy focus to solicit the participation of business enterprises sector through Public-Private Partnerships (PPP). Secondly, there is a move towards project based and mission mode funding compared to the existing focus on institutional funding.  Industrial and commerce and trade policies are directed to increase absorptive capacity and demand for innovation.


4. Smart specialisation approaches

Smart specialisation approaches can be seen with the emergence of various platforms for connecting local actors and stakeholders in the process of research and innovation activities. These approaches assume considerable significance for training, mutual learning, access to data and information and to enable people to participate in the programs. The first move of government using ICT and telecommunication platforms expanded mobile penetration to over 1 billion connections and nearly 200 million Internet users, highest after China.

A major initiative through National Knowledge Network (NKN) witnessed tremendous improvement and growth in the last two years. NKN not only connects national and regional actors and stakeholders in the knowledge, research and innovation agencies, but also links them up with international research platforms for acquisition and knowledge dissemination. The program on Digital India is to provide digital access to government services to citizens. It is also aimed at providing relevant information and data to various others stakeholders like foreign investors, interested firms to start business, to participate in other government measures like Make in India, Clean India, Skill India and Clean India. As a part of making use of smart specialisation approaches, the government continues to implement digital based unique identification cards to all people. By 2015 it has covered over 1 billion people. This platform is used for transferring benefits via ID cards and bank accounts.

Techpedia is an initiative at Society for Research and Initiatives for Sustainable Technologies and Institutions (SRISTI) in collaboration with National Innovation Foundation, DST. It aims at putting the problems of micro, small and medium enterprises, informal sector, grassroots innovators and other social sectors on the agenda of the young technology students across the country. already has 140 000 technology projects documented by 350 000 students from 500 colleges and universities in India in its data bank.

5. Internationalisation of R&I

Internationalisation of R&I activities is quite diverse in terms of research fields, regions, countries, public and private agencies. India’s cooperation with EU and individual countries in Europe, USA, Japan and China has grown rapidly over the last few years. From 2011 to 2015 nearly 400 collaborative projects were undertaken with these countries dominated by USA. India-EU S&T collaboration has grown five times from 33 projects under FP4 (1994-1998) to 175 projects under FP7 (2007-2013). In all 300 projects were undertaken in these programmes. Beside FP based projects, India and EU have entered into some notable big science and high technology projects such as in ITER, FAIR, Galileo Project (European version of USA’s Global Positioning System). Another important form of EU and India cooperation has been with EU’s JRC, Horizon2020 and INDIGO. India also established some joint laboratories for advancement of science and technology in India in collaboration with USA, France and Germany. India has taken keen interest in intergovernmental organisations and regimes such as in energy, climate change, space and nuclear technology in recent years. An important platform between Department of Science and Technology and Industry Association called Global Innovation and Technology Alliance (GITA) for joint funding has emerged as an important agency in the last few years.

Mobility of professionals and building capacities in technological frontiers through attracting Indian scientific diaspora is given considerable importance in the last few years. The concepts of brain gain and brain circulation has come into sharp focus. Internationalisation of R&I is closely associated with globalisation of innovation stretching to R&I based Transnational Corporations. India has become one of the attractive destinations for multinational firms to set-up R&D centres or labs. According to a report from the Chambers of Commerce and Industry, over 870 multinational firms have established R&D centres in the last decade and a half.


The conclusion section identifies the main strengths and weaknesses of R&I system. For instance, India’s main strengths are in pharma, auto, software, aerospace and satellite design and launching. This activity has enabled India to become competitive at the global level. On the other hand, the regional innovation policies are very weak with low level of technological support for industrial clusters and SMEs. System of governance in setting research priorities, S&T forecasting and preparing strategic research and innovation plans is highly developed but lacks adequate mechanisms of interaction and linkages.

India has a highly organised and developed science, technology and higher education system. Even though the total GERD increased by over three times in the last twelve years, it has not been able to go beyond 0.9% of GDP which is relatively low compared to OECD average. More than 55% of GERD is spent on strategic sectors and hence spending on the civilian R&D sector is low. India’s higher education sector is booming with over 700 universities, 30 000 colleges and GERD about 23%. Whist the HERD is less than 5% of GERD, university sector as a whole, remains with low research intensity. The growth of India NIS to a large extent benefitted Indian educated and urban middle classes and a range of modern industrial sectors. More than 65% of population is dependent on agriculture with relatively low level of contribution to national GDP compared to the service sector. India is yet to accomplish a 2nd Green Revolution. More than 95% of labour force is employed in informal sector and only 3% of this labour force has type of training in skills. There is a big challenge here to educate and train labour force in the coming decade. A number of flagship programmes with a clear objective to bring about structural changes both in the economy and society have come into operation. A series of policy measures, policy mix and R&I schemes (Atal Innovation Mission; SETU and Start Ups for example) have been initiated to address various challenges facing the country. Government is committed to increase GERD from 0.9% to 2% of GDP. Tax incentive schemes have been implemented to increase the contribution of private R&D investments. Economic policies have been liberalised to encourage FDI in R&D and FDI in capital inflows.

Geo coverage
Report year
Official publication date
Monday, 31 October, 2016
Country Report file
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