The government has taken action to spur innovation: Indian industry must seize the moment

The move is a bold declaration that India is done playing catch-up. It’s our chance to break free from technological dependence, rewrite the rules and own the innovations that will shape our technology journey. India’s ambition to lead in cutting-edge sectors like AI, quantum computing, biotech and space research, for instance, will get a boost. Now the challenge shifts to the private sector—to pick the ball, and build the runway to a Product Nation.

The scheme reflects the government’s intent to transform India from a service-driven economy into a powerhouse of deep-tech, scientific breakthroughs and globally competitive innovation. It’s time we stopped being just a market and started becoming makers.

Alongside the Anusandhan National Research Foundation (ANRF), this initiative lays the foundation for high-risk, cutting-edge research to finally thrive. Economist Mariana Mazzucato, in her book The Entrepreneurial State, illustrates how bold government investments in countries like the UK and US have played a pivotal role in creating world-changing products.

The government’s seriousness was evident just after the Budget this year. On 5 March, Prime Minister Narendra Modi underscored the urgent need for investing in R&D to achieve a Viksit Bharat. He framed it not as a choice, but as a national imperative. Following this, the Department of Science and Technology, convened an industry consultation to discuss the contours of the RDI Fund and invited ideas on how to implement it. The message was clear: the government has laid the groundwork and the private sector must now step up.

We all know that making products begins with research—a process that demands time, talent and funding. So far, the country’s R&D push has been throttled by a paucity of funds.

For decades, India’s R&D spending has languished at 0.64% of GDP—minuscule compared to the 2–5% that countries like the US, Japan, and China invest.

In 1980, India’s R&D spend was 0.6% of GDP; by 2018, it dropped to 0.3%, and in 2021, it was just 0.8%. In contrast, South Korea spends 4.8%, Taiwan nearly 4% and China over 2.2%.

The new scheme allows private players and research institutions to take translational research to Technology Readiness Levels (TRLs) 4–9—vital for taking lab-based ideas to market. It offers not just capital, but long-term risk capital for high-risk, high-impact research.

Support will also come in the form of capacity-building and collaborative momentum through initiatives like Saamarthya—short for Strategic Autonomy Acceleration Mission for Advanced Research and Technology Hubs.

The R&D momentum will help overcome intellectual constraints. India must build an ecosystem where innovation thrives, new industries emerge and high-quality jobs are created. R&D is the key to propelling us from an idling economy to an entrepreneurial one.

A recent example of government-led deep-tech funding is QpiAI, which raised ₹32 million with support from the National Quantum Mission. The Bengaluru-based company builds quantum computers for real-world problems in agriculture, manufacturing and drug discovery. The government leading the funding round gave other VCs confidence—a role the RDI scheme is set to replicate across sectors.

Even stable businesses risk becoming obsolete without innovation. The US is leveraging AI and automation to reduce dependency on foreign labour, undercutting the labour arbitrage once enjoyed by India and China.

China is pouring billions into subsidies and research to eliminate global competition. Its industrial strategy is designed to dominate and dismantle rivals—a threat India can no longer afford to overlook.

If we do not invest in our own capabilities, we risk becoming either a tech colony of the US or a trade colony of China. Strategic autonomy depends on controlling technologies of the future.

Operation Sindoor showed that in crises, we stand alone. India’s edge came from relying on homegrown tech—drones, space assets, and NavIC—proving that true strength lies in technological sovereignty.

Self-reliance means building our own drones, operating systems, chips, cameras and core components. China has already weaponized its grip on supply chains, restricting exports of rare earth magnets and tunnel boring machines. The US, too, limits exports of advanced quantum tech. In this new protectionist era, India cannot afford dependency.

The government must take the next crucial step. Globally, demand aggregation is recognized as a powerful lever for economic growth. The Biden administration had set aside $600 billion for ‘Made in America’ goods in 2021. Indonesia’s “100% Cinta Indonesia" campaign did the same. India must follow suit.

When public policies and investments create assured demand, they build stable markets, attract private investment and drive innovation. The government must mandate that all public-sector procurement prioritizes Indian-made products—especially semiconductors—given the serious national security implications of relying on Chinese imports.

India’s RDI scheme is timely and strategic. The government has laid the foundation. Now the private sector must take the leap.

These are the author’s personal views

The author is co-founder of HCL and chairman, EPIC Foundation