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3 weeks ago
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Summary
The government’s RDI scheme plugs key funding gaps across various stages of the innovation process. But building sovereign capabilities that can create future value and buffer India’s economy against global volatility will take much more. Here’s what we must do.
In recent months, India’s R&D capability has become a matter of national debate. Rightly so. The government’s announcement of its Research, Development and Innovation (RDI) Fund signals the right intent. In many ways, this should be seen not as the culmination of India’s science agenda, but as an opening to a larger redesign of how the country organizes and governs R&D.
Today, India’s challenge is not lack of ambition, but the underlying architecture. Our research ecosystem still faces issues such as data gaps, slow translation cycles, regulatory friction and limited patient capital for DeepTech. Without thoughtful structural improvement, even a new fund, however large, may struggle to fully deliver the innovation outcomes India seeks.
In this context, the ₹1 trillion RDI scheme, operationalized through the Anusandhan National Research Foundation (ANRF), marks a pivotal shift. It finally gives India a dual-engine innovation architecture that spans technology readiness levels (TRLs): ANRF grants for early-stage discovery and low-TRL science plus a patient-capital RDI Fund for translation, scaling and commercialization at higher TRLs.
This dual structure plus a long-standing gap in India’s innovation journey: the absence of institutional mechanisms that connect scientific discovery with scalable enterprise adoption.
With the ANRF derisking foundational research across mission-mode domains such as EVs, med-tech, 2-D materials and AI for science, and with the RDI Fund leveraging alternative investment funds, development finance institutions, non-bank financial companies and corporate vehicles to back RDI-intensive projects, India can build a bridge between invention and innovation.
If executed well, this architecture could ‘crowd in’ large sums of private investment in R&D.
But the architecture is only the starting point. India may find it challenging to enter the next decade with a delivery-first mindset and lead the world’s next tech transformation. Despite having one of the world’s strongest pools of tech talent, our R&D intensity is just 0.7% of GDP, compared to over 2% in China and over 3% in Israel, South Korea and the US.
For a country aspiring to lead in AI, semiconductor design, space-tech, biotech, new materials and sustainability engineering, this gap may get in the way of our competitiveness.
Today, scientific depth and innovation determine a nation’s sovereignty, not just market scale. Geopolitical trends suggest that markets will get more fragmented, production more capital intensive and trade more conditional, even as technology strengthens as a lever of power.
India may find it increasingly difficult to rely on external R&D and intellectual property at a time when AI models, compute supply chains, materials science, defence tech and bioengineering are becoming strategic national assets for negotiated advantages.
R&D strength would not only offer us sovereign capability and the ability to capture future value, but also shield us from global volatility. India’s R&D agenda must be framed accordingly. A high-intensity domestic R&D ecosystem is how we secure long-term strategic autonomy, retain value within the country and future-proof our growth against external shocks.
If we do not strengthen our deep-science capability at home, we risk becoming more dependent on foreign technologies in a world where tech strength increasingly determines geopolitical influence.
But the biggest barrier today is not lack of will. It is the pressure points embedded in our institutional R&D system architecture.
To move from aspiration to measurable outcomes, a careful redesign of the R&D operating system could play a meaningful role.
Adopt a globally benchmarkable data architecture for R&D: Policy cannot rely on assumptions; it needs clear visibility, meaningful comparability and real-time measurement.
Create a modern science-to-market pipeline: India must accelerate pathways for technology transfer, intellectual property licensing and procurement that privilege Indian innovation.
Create regulatory environments that enable risk: DeepTech requires sectoral sandboxes beyond fintech in areas such as compute, space, materials, biotech and AI safety, with clear guardrails and speed expectations.
Crowd in patient private capital: The multiplier effect of government initiatives will only come into play once private capital co-invests in long-horizon tech projects; perhaps outcome-linked incentives could be deployed to support scale.
These foundations are essential for the RDI Fund to realize its full potential. Without them, capital on its own may not significantly strengthen India’s R&D performance.
This is a pivotal moment for us. How we fare with R&D could define India’s image as an innovative country for decades to come. We cannot aspire to be the world’s AI factory without first becoming an R&D powerhouse.
The government’s RDI push is in the right direction. It signals our intent to move from cost-led participation to invention-led value capture. But its true impact will be determined by how well we redesign the broader ecosystem around it, which includes measurement, incentives, translation, regulation and private capital. As the world order shifts in line with tech ecosystems, India must seize its R&D moment without losing time.
The author is president, Nasscom.
English (US) ·