logo
With the pvt sector indifferent to R&D, India risks missing the deep-tech bus, or getting locked out

With the pvt sector indifferent to R&D, India risks missing the deep-tech bus, or getting locked out

Economic Times01-05-2025

(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com .)
In the 2000s, China recognised that technological dependence was a strategic liability because it relied on US chips, Western operating systems and telecom infra. This triggered a strategy rooted in constructive paranoia, and the launch of mission-driven policies:This aimed to make China an 'innovation-oriented nation'.It targeted dominance in 10 hi-tech sectors.This programme was launched to reverse brain drain, and attract global researchers. It has received massive state support through guidance funds, industrial subsidies and tech-focused SOEs.China also doubled down on patenting, domestic standards and end-to-end industrial ecosystems, from semiconductors to green energy. R&D investment surged past 2.5% of GDP, with a rapidly rising share from the private sector. Today, China leads the world in AI patents, EV production, solar capacity and quantum publications.Meanwhile, India faces similar vulnerabilities China faced 25 years ago: imported chips, weak indigenous IP, low- tech exports and a fragmented research base. And the response has been uneven.GoI has launched Anusandhan National Research Foundation (ANRF), a ₹1 lakh cr R&D fund, expanded PLI schemes, and invested in semiconductors, space tech, clean energy and quantum. For the first time, the government is adopting a full-spectrum approach to funding research and innovation across all technology readiness levels (TRLs).While ANRF will focus on early-stage discovery (TRLs 1-3) and improve ease of doing science with DST, a soon-to-be-finalised ₹1 lakh cr R&D fund should drive private investment in mid-to-late-stage innovation (TRLs 4-9) through long-term, near-zero-interest loans. This fund shifts focus from grants to outcome-linked support for developing commercially viable tech. While the need for greater funding in basic research is acknowledged, GoI is laying the essential groundwork to build a self-sustaining R&D ecosystem.Yet, the private sector remains risk-averse, contributing barely a third of national R&D. India's R&D-to-GDP ratio remains stuck below 0.7%, with little traction in patenting or deep-tech commercialisation. The innovation pipeline is still thin.Ex-Intel CEO Andrew Grove made the line, 'Let's be paranoid' - with its philosophy of the importance of proactive preparedness for unexpected changes and strategic inflection points - famous. And, yet, even Intel wasn't paranoid enough. It missed the AI inflection point, and today Nvidia has overtaken it in valuation, strategic relevance and tech leadership.A similar inversion is unfolding between China and the US, driven by who innovates faster and scales deeper. Unfortunately, while GoI is paranoid, India's private sector isn't.In 2024, Foundation for Advancing Science & Technology (FAST) published a comparative study, 'State of Industry R&D in India', of 59 Indian and 60 global firms across six key sectors: pharma, software, defence, chemicals, automobiles, and energy. The study, conducted between FY16 and FY23, reveals a persistent input-output gap. Global firms, on average, reported 2.9x R&D intensity (spend as % of revenue), 3.7x share of PhD-qualified employees, and 2.9x R&D spending as share of profits than Indian firms.On output indicators, the disparity is starker. Global firms generated 13.1x patents and 1.3x scientific publications per billion dollars of revenue compared to their Indian counterparts.The European Commission recently released the EU Industrial R&D Investment Scoreboard 2024. It presents data on the top global 2,000 companies investing in R&D. They invested ₹1,257.7 bn in R&D in 2023. Indian firms accounted for ₹5.5 bn, or about 0.4%, of global industrial R&D investment, with only 15 companies featuring among the world's top 2,000 R&D spenders.This places India behind not only advanced economies like the US (₹531.8 bn, 681 firms) and China (₹215.8 bn, 524 firms), but also innovation-intensive small economies such as South Korea (₹42.5 bn, 40 firms), Taiwan (₹24.7 bn, 55 firms), and Ireland (₹10.4 bn, 24 firms).Sustained long-term economic growth is driven by investments in knowledge and innovation. India's failure to internalise this principle within its industrial ecosystem suggests presence of constraints: low absorptive capacity, weak industry-academia linkages, and limited interest from the private sector in high-risk R&D.Persistent underrepresentation of Indian firms in global innovation rankings reflects a missing industrial policy focus on Schumpeterian creative destruction, without which India risks being confined to low-value segments of GVCs.In Liu Cixin's 2008 science fiction novel, The Three-Body Problem, the world gets paralysed by the sudden collapse of scientific progress. Stagnation is the real nightmare. It's not fiction any more. For India, the risk isn't that we fail. It's that we're too comfortable even to try. Innovation can't be outsourced.If there's a gap between what scientists are doing and what businesses need, then companies must invest in R&D, collaborate with academia, and shape research. If the private sector stays disengaged, we'll keep watching others lead. We just aren't paranoid enough.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Jaishankar warns Europe on terrorism, says India will advance US ties based on national interest
Jaishankar warns Europe on terrorism, says India will advance US ties based on national interest

Economic Times

time39 minutes ago

  • Economic Times

Jaishankar warns Europe on terrorism, says India will advance US ties based on national interest

Blunt on West's past, China ties and data security Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Amid reports of growing divergence between India and the Trump camp on key security concerns like Pakistan-sponsored terrorism , external affairs minister S Jaishankar on Wednesday emphasised that India's engagement with the US is driven by national interest, not personalities. Speaking during his visit to Europe, Jaishankar also issued a stern warning to European countries against downplaying terrorism, asserting that the threat will 'come back to haunt' them.'I take the world as I find it. Our aim is to advance every relationship that serves our interests — and the US relationship is of immense importance to us. It's not about personality X or president Y,' said Jaishankar in an interview to Euractiv when asked whether India trusts Donald comments come amid subtle tensions with the Trump administration-in-waiting over its reported reluctance to take a strong position on Pakistan's role in cross-border terrorism, particularly after the Pahalgam terror attack that killed several Indian soldiers and triggered a military evoked the memory of Osama bin Laden's presence in Pakistan to underscore the gravity of the threat. 'Why did he, of all people, feel safe living for years in a Pakistani military town, right next to their equivalent of West Point?' he asked. 'I want the world to understand — this isn't merely an India-Pakistan issue. It's about terrorism. And that very same terrorism will eventually come back to haunt you.'Taking on European countries that have questioned India's ties with Russia, Jaishankar said those nations must reflect on their own historical actions. 'India has the longest-standing grievance — our borders were violated just months after independence, when Pakistan sent in invaders to Kashmir. And the countries that were most supportive of that? Western countries,' he said.'If those same countries — who were evasive or reticent then — now say 'let's have a great conversation about international principles', I think I'm justified in asking them to reflect on their own past,' the minister India's balancing act between economic growth and geopolitical caution, Jaishankar pointed to global trends of 'de-risking' from China. Recalling his conversations with European companies in India, he said many firms were actively choosing to diversify away from China.'Many companies are becoming increasingly careful about where they locate their data — they'd rather place it somewhere secure and trustworthy than simply go for efficiency. Would you really want that in the hands of actors you don't feel comfortable with?' he said.

UN nuclear watchdog board censures Iran, Tehran reacts with announcement of new enrichment site
UN nuclear watchdog board censures Iran, Tehran reacts with announcement of new enrichment site

Indian Express

timean hour ago

  • Indian Express

UN nuclear watchdog board censures Iran, Tehran reacts with announcement of new enrichment site

The UN nuclear watchdog's board of governors on Thursday formally found that Iran isn't complying with its nuclear obligations for the first time in 20 years, a move that could lead to further tensions and set in motion an effort to restore United Nations sanctions on Tehran later this year. Iran reacted immediately, saying it will establish a new enrichment facility 'in a secure location' and that 'other measures are also being planned.' 'The Islamic Republic of Iran has no choice but to respond to this political resolution,' the Iranian Foreign Ministry and the Atomic Energy Organization of Iran said in a joint statement. US President Donald Trump previously warned that Israel or America could carry out airstrikes targeting Iranian nuclear facilities if negotiations failed — and some American personnel and their families have begun leaving the region over the tensions, which come ahead of a new round of Iran-US talks Sunday in Oman. In Israel, the US Embassy ordered American government employees and their families to remain in the Tel Aviv area over security concerns. Nineteen countries on the International Atomic Energy Agency's board, which represents the agency's member nations, voted for the resolution, according to diplomats who spoke on condition of anonymity to describe the outcome of the closed-doors vote. Russia, China and Burkina Faso opposed it, 11 abstained and two did not vote. In the draft resolution seen by The Associated Press, the board of governors renews a call on Iran to provide answers 'without delay' in a long-running investigation into uranium traces found at several locations that Tehran has failed to declare as nuclear sites. Western officials suspect that the uranium traces could provide further evidence that Iran had a secret nuclear weapons program until resolution was put forward by France, the United Kingdom, Germany and the United States. Speaking to Iranian state television after the vote, the spokesman for the Atomic Energy Organization of Iran said that his agency immediately informed the IAEA of 'specific and effective' actions Tehran would take. 'One is the launch of a third secure site' for enrichment, spokesman Behrouz Kamalvandi said. He did not elaborate on the location, but the organization's chief Mohammad Eslami later described the site as 'already built, prepared, and located in a secure and invulnerable place.' Iran has two underground sites at Fordo and Natanz and has been building tunnels in the mountains near Natanz since suspected Israeli sabotage attacks targeted that facility. The other step would be replacing old centrifuges for advanced ones at Fordo. 'The implication of this is that our production of enriched materials will significantly increase,' Kamalvandi said. According to the draft resolution, 'Iran's many failures to uphold its obligations since 2019 to provide the Agency with full and timely cooperation regarding undeclared nuclear material and activities at multiple undeclared locations in Iran … constitutes non-compliance with its obligations under its Safeguards Agreement.' Under those obligations, which are part of the Nuclear Non-Proliferation Treaty, Iran is legally bound to declare all nuclear material and activities and allow IAEA inspectors to verify that none of it is being diverted from peaceful uses. The draft resolution also finds that the IAEA's 'inability … to provide assurance that Iran's nuclear program is exclusively peaceful gives rise to questions that are within the competence of the United Nations Security Council, as the organ bearing the main responsibility for the maintenance of international peace and security.' The draft resolution made a direct reference to the US-Iran talks, stressing its 'support for a diplomatic solution to the problems posed by the Iranian nuclear program, including the talks between the United States and Iran, leading to an agreement that addresses all international concerns related to Iran's nuclear activities, encouraging all parties to constructively engage in diplomacy.' A senior Western diplomat last week described the resolution as a 'serious step,' but added that Western nations are 'not closing the door to diplomacy on this issue.' However, if Iran fails to cooperate, an extraordinary IAEA board meeting will likely be held in the summer, during which another resolution could get passed that will refer the issue to the Security Council, the diplomat said on condition of anonymity because he wasn't authorized to discuss the issue with the media. The three European nations have repeatedly threatened in the past to reinstate, or 'snapback,' sanctions that have been lifted under the original 2015 Iran nuclear deal if Iran does not provide 'technically credible' answers to the U.N. nuclear watchdog's questions. In a joint statement to the IAEA board of governors, the three European nations said that they would 'spare no efforts to work towards a diplomatic solution' but added that without a satisfying deal, they would 'consider triggering the snapback mechanism to address threats to international peace and security arising from Iran's nuclear program.' The authority to reestablish those sanctions by the complaint of any member of the original 2015 nuclear deal expires in October, putting the West on a clock to exert pressure on Tehran over its program before losing that power. The resolution comes on heels of the IAEA's so-called 'comprehensive report' that was circulated among member states last weekend. In the report, the U.N. nuclear watchdog said that Iran's cooperation with the agency has 'been less than satisfactory' when it comes to uranium traces discovered by agency inspectors at several locations in Iran. One of the sites became known publicly in 2018, after Israeli Prime Minister Benjamin Netanyahu revealed it at the United Nations and called it a clandestine nuclear warehouse hidden at a rug-cleaning plant. Iran denied this, but in 2019, IAEA inspectors detected the presence of uranium traces there as well as at two other sites. Iran's President Masoud Pezeshkian, who campaigned on reaching out to the West, struck a harder line after the IAEA vote. 'I don't know how to cooperate with the outside world to stop them from doing evil acts and let the people live independently in this country,' Pezeshkian said. 'We will continue down our own path; we will have enrichment.'

Most G7 members ready to lower Russian oil price cap without US
Most G7 members ready to lower Russian oil price cap without US

Hindustan Times

time2 hours ago

  • Hindustan Times

Most G7 members ready to lower Russian oil price cap without US

BRUSSELS/PARIS, - Most countries in the Group of Seven nations are prepared to go it alone and lower the G7 price cap on Russian oil even if U.S. President Donald Trump decides to opt out, four sources familiar with the matter said. G7 country leaders are due to meet on June 15-17 in Canada where they will discuss the price cap first agreed in late 2022. The cap was designed to allow Russian oil to be sold to third countries using Western insurance services provided the price was no more than $60 a barrel. The European Union and Britain have been pushing to lower the price for weeks after a fall in global oil prices made the current $60 cap nearly irrelevant. The sources, who declined to be named, said the EU and Britain are ready to lead the charge and go it alone, backed by the other European G7 countries and Canada. They said it is still unclear what the U.S. will decide, though the Europeans are pushing for a united decision at the meeting. Japan's position also remains uncertain, they said. "There is a push among European countries to reduce the oil price cap to $45 from $60. There are positive signals from Canada, Britain and possibly the Japanese. We will use the G7 to try to get the U.S. on board," one of the sources said. The White House had no immediate comment. During the G7 finance ministers meeting in the Canadian Rockies last month, U.S. Treasury Secretary Scott Bessent remained unconvinced there was a need to lower the cap, according to sources. However some U.S. Senators may endorse the idea, including Lindsay Graham, who in recent weeks told reporters he supports lowering the cap. Graham is pushing a hard-hitting new set of Russia sanctions that could impose steep tariffs on buyers of Russian oil. The EU has proposed lowering the price to $45 a barrel in its latest 18th package of sanctions. The package must have unanimity from member states in order for it to be adopted, which could take several weeks. Russia's largest export grade, Urals, trades at around a $10 a barrel discount to the Dated Brent benchmark out of Baltic ports. Brent futures have been trading below $70 a barrel since early April. Sources said Washington's buy-in was not essential to lower the cap owing to Britain's dominance in global shipping insurance, and the EU's influence on the Western rules-abiding tanker fleet. The U.S., however, does matter when it comes to dollar-denominated payments for oil and its banking system. The EU and its Western allies have been progressively cracking down on Russia's shadow fleet of tankers and related actors, which work to circumvent the cap. The pressure has started to hurt Moscow's revenues and Western allies hope this will push more of the oil trade back under the cap. Russia's state-owned oil producer Rosneft reported a 14.4% slump in profits last year.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store