The newly launched $1 trillion Research, Development and Innovation (RDI) Scheme is India’s bold move to channelise scientific talent into economic strength for the Viksit Bharat 2047 vision. This investment arrives at a pivotal moment.
The urgency is undeniable. India spends just 0.6% of GDP on R&D, well below the 1.8% global average and a fraction of the 3–6% spent by leaders like South Korea and Israel. Private industry accounts for only 36% of India’s R&D spend, compared to ~70% in leading economies.
The RDI scheme is promising, but concessional capital alone will not drive high-risk research. We need systemic coordination.
FROM FIRST MOVER TO MISSED OPPORTUNITY
India has been on the front edge of several deep tech frontiers, yet each early lead ebbed away for some systemic fragmentation.
In the 1970s, ISRO developed its own launch vehicles which dominated global small sat markets. But its flagship PSLV rocket never evolved into a flexible, commercial launch platform like SpaceX. In the 1980s, India’s Semiconductor Complex Ltd. (SCL) produced 800 nm chips, even preceding Taiwan’s TSMC. Instead of scaling up commercially, it stuck to outdated 180 nm defence chips. TSMC, founded after SCL, moved to 3 nm and today owns 35% of global foundry output. Pharma has the same story.
WHAT AILS US
These early breakthroughs stagnated because academia, industry, and government worked in silos. Innovation leaders use a “triple helix” model: universities generate ideas, companies develop them, governments enable scale-up. This transforms inventions into industries.
The dysfunction starts with concentration of public research. Consequently, a disengaged private industry provides only 5-7% of academic research funding, and Indian firms contribute a mere 0.5% of global corporate R&D, signaling an innovation-averse mindset.
SIGNALS OF A SHIFT
Underneath these challenges, there are sparks of promise. India’s Patent Office received a record 90,298 applications in 2023, with 55.2% from domestic applicants, compared to just 25% in 2013. Investments in deeptech start-ups rose 78% to $1.6 billion, compared to 23% overall, drawing interest from both specialist and generalist firms.
GLOBAL MODELS, INDIAN MOVES
India can and is following established playbooks for aligning research, industry, and government.
The US bridged academia and industry with the 1980 Bayh-Dole Act. Germany’s Fraunhofer Society commercialised research and earns €836 million annually. China rewards province-level tech transfers.
Domestic successes validate this approach. IIT Madras’s Rs 1.25-crore bet on Ather Energy is set for a 40x IPO return. Boosted by this, innovation continues to emerge, like Professor Chakravarthy’s air taxis from IIT-Madras. Large industry is also investing: Ola has created a Battery Innovation Center and Tata Steel is creating next-gen alloys at its research centre. Corporates like Shell and Qualcomm now fund Indian deep-tech companies. With the private sector expected to fund 70% of the RDI scheme, this trend will accelerate.
India is also emulating the US government’s role as early-stage funder and customer. ISRO is opening its launch pads to start-ups, and HAL and L&T are manufacturing launch vehicle components. The iDEX programme is funding defence start-ups, while the Rs 76,000-crore Semiconductor Mission supported Micron’s $2.75-billion investment. The Government e-Marketplace now supports over 30,000 start-up suppliers. Sebi’s Innovators Growth Platform is easing listing rules for IP-heavy firms.
The government-academia divide is also being bridged, following global models of open, collaborative funding and shared infrastructure. Further, the Rs 50,000 crore NRF will bankroll university research, and BIRAC has already funded 500-plus biotech start-ups. On infrastructure, the Bangalore Bioinnovation Centre offers subsidised wet labs and pilot scale lines, nurturing 100+ life science start-ups. To scale up these successes, the government is now establishing Science & Technology clusters in Bengaluru and Hyderabad.
THE WAY FORWARD
India must now ensure strong innovation pipelines by raising the share of R&D funding for higher education, distributed through competitive, milestone-based grants. To move innovations from lab to market, a Bayh-Dole–style law would grant universities ownership of publicly funded IP to incentivise commercialistion, complemented by professional tech-transfer offices and regional science parks.
The government can also modernise its role by shifting procurement towards technical merit and start-up quotas to de-risk new technologies. A dedicated agency, modeled on ARPA, should be established with significant autonomy and high failure tolerance to make bold, strategic bets in fields like AI and biotech. 
Views are personal. The author is an Emerging Tech Fellow at Harvard’s Belfer Center.
