'Where is our Elon Musk?': Economist Sanjeev Sanyal says Indian private sector lacks risk-taking appetite

Economist Sanjeev Sanyal has raised questions about the Indian private sector's willingness to take risks in research and development in cutting-edge fields like artificial intelligence. 

In a podcast conversation hosted by the Indian School of Business (ISB), Sanyal was asked whether fundamental AI research—like ChatGPT — could emerge from India's tier-2 or tier-3 cities. He responded, "It could happen. My own sense is that as things stand right now, Indian companies are not at the cutting edge but there are Indians at the cutting edge of it. Not just in the West — even in India. People don't realise much of this AI is being developed by Google and all these guys in their GCC in India. So Indians are at it but I would like to see Indian companies be at the cutting edge of it. They are not yet. They may get there in the future but they aren't there yet."

He added that the gap stems from a deeper structural issue. "And this comes to something else I have long argued for — that the Indian private sector unfortunately still doesn't have the risk-taking appetite required to do the R&D needed. And somehow we think that government-driven R&D will take the risk. No. Everywhere in the world, the real cutting edge — even in space technology — is now run by private sector. So where is our Elon Musk to take all those crazy risks?"

Sanyal's comments come amid increasing calls from policymakers to shift focus from gig economy models to deep-tech innovation. Earlier this year, Commerce Minister Piyush Goyal criticised Indian startups for prioritising food-delivery apps over core technology. "Do we have to make ice cream or chips? Dukaandari hi karna hai?” he asked at a startup event in Delhi, arguing that India needed a reset in innovation thinking. 

Goyal also pointed out the contrast with China's growing dominance in AI. "What are India’s startups of today? We are focused on food delivery apps, turning unemployed youths into cheap labour so the rich can get their meals without moving out of their house," he said.

Mohandas Pai, chairman of Aarin Capital, disagreed with Goyal's broad assessment but echoed the structural concern on funding. "Minister Piyush Goyal, there are very many small deep tech startups in chip design, IoT, robotics, EV charging, BMS in India, growing rapidly. But where is the capital? Indian startups got $160B from 2014–2024, China $845B, US $2.3 trillion. Long-term investors like endowments and insurance still do not invest despite your efforts,” Pai wrote.

In May this year, former NITI Aayog CEO Amitabh Kant also took aim at the lack of private investment in R&D. "When government reduced corporate taxes, (it) gave away Rs 1,45,000 crore to the Indian industry. It wanted Indian industries to do R&D, to do private capex in India. (But) that has not happened till date." 

The 2025 Economic Survey also flagged these concerns, noting that India’s gross expenditure on R&D remains only 0.64% of GDP — compared to over 2% in countries like China. It said that in advanced economies, over 70% of R&D is funded by private firms, while in India, government spending still dominates.