India’s R&D spend at 0.6% of GDP due to low contribution from private sector: Economic Survey

India's gross expenditure on R&D as a percentage of GDP stands at a modest 0.64%, substantially below the global average, according to the Economic Survey 2025-26 tabled in the Parliament.

Leading economies, such as the US (3.48%), China (2.43%), and South Korea (4.91%), invest significantly more.

“Low expenditure in R&D is partly due to low investment in R&D from business sector, which accounts for only 41% of the total expenditure,” the Economic Survey pointed out.

This is in stark contrast to countries such as China (77%), United States (75%), and South Korea (79%), where business sector contributions to R&D are significantly higher, the Survey noted.

Bridging this disparity through various measures and fostering a conducive environment for private industry is critical for accelerating technological development, it said.

The government has instituted a series of initiatives to drive innovation. A major institutional reform driving India’s R&D and aimed at addressing the challenges is the establishment of the Anusandhan National Research Foundation (ANRF) under the ANRF Act, 2023.

The ANRF is intended to provide strategic direction, competitive funding opportunities and collaboration pathways across industry, academia and government. The initiatives taken up by ANRF are being complemented by a suite of mission-driven national programmes such as the National Quantum Mission, the National Mission on Interdisciplinary Cyber-Physical Systems, the IndiaAI Mission, the India Semiconductor Mission, and the National Green Hydrogen Mission. Each initiative focuses on building foundational scientific capability in sunrise domains, translating research into scalable industrial capacity.

To finance innovation at scale, the government also announced a new Research, Development and Innovation (RDI) Fund with a total outlay of ₹1 lakh crore over six years and ₹20,000 crore allocated for FY26. The Fund is designed to catalyse private investment in high-tech R&D, support projects at advanced technological readiness levels, enable acquisition of strategically important technologies, and operationalise a Deep-Tech Fund of Funds.