According to CareEdge Ratings, in order to boost industrial growth and boost global competitiveness, India must raise its research and development (R&D) spending to 2% of GDP by 2035.
India’s manufacturing GDP share fell from 16% in 2015 to 13% in 2024, according to the analysis, underscoring structural difficulties in growing value-added production. At 0.6–0.7% of GDP, current R&D spending is still quite low compared to nations like the US, China, and South Korea.
Building innovation-led manufacturing ecosystems requires increased investment in STEM education, better industry-academia collaboration, and increased private sector participation, according to the agency. It also emphasized that just 4% of all patents worldwide are from India, which is indicative of poor research commercialization and low researcher density.
The survey further stated that while broader industry participation is still low, R&D investments among Indian companies are still concentrated in industries like chemicals, cars, and pharmaceuticals. Long-term manufacturing competitiveness can be improved by increasing tax incentives, facilitating access to risk capital, and promoting innovation-focused industrial policy.
Source – The Economic Times
