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India is a very large country and a fast-growing emerging economy. It is the global hub of offshore knowledge-intensive IT services and IT industry. However, its growth rate has slowed somewhat in recent years and poverty continues to be a major challenge. Innovation is seen as critical to India’s socio-economic development. Through its national strategy, Decade of Innovations 2010-20, the government is committed to strengthening S&T capacities. The objective is to increase GERD to 2% of GDP with a doubling of the business contribution by 2020.

Hot Issues

Hot Issues are major national STI policy priorities, as self-reported by countries in their responses to the OECD STIO 2014 policy questionnaire.

Innovation to contribute to addressing social challenges (including inclusiveness)

The 12th Five-Year Plan (2012-17) seeks to address social challenges, especially poverty and exclusion, by catalysing a growth process that will promote more inclusive development. “Inclusive Innovation” initiatives that focus on innovation outcomes benefiting poor and excluded groups therefore receive particular attention. Innovation activities of the poor themselves are also important. Initiatives have been, or will be, launched to promote inclusive innovations, such as India’s Inclusive Innovation Fund (IIF). The IIF is expected to mobilise USD 3.2 billion (INR 50 billion) and will support enterprises that develop innovative solutions for the “bottom 500 million” in India. About USD 320 million (INR 5 billion), or some 10% of the total, was raised by July 2012. India’s National Innovation Foundation, created in 2000, supports grassroots innovators, i.e. those from poor and excluded groups, at various stages of the innovation process.

Innovation to contribute to sustainable/green growth

India faces energy security challenges, since economic growth creates more demand for energy and increases dependence on imports of coal. In response, several policies defined in the National Action Plan on Climate Change have been adopted to support renewable energy and energy conservation. The National Solar Mission aims to promote the development and use of solar energy for power generation and other uses with the ultimate objective of making solar energy competitive with fossil-based energy. The National Mission for Enhanced Energy Efficiency mandates specific decreases in energy consumption in large energy-consuming industries, with a system for companies to trade energy-savings certificates and incentives for adopting energy-efficient appliances. Finally, the national Mission for Sustainable Agriculture aims to support climate adaptation in agriculture through support for the development of climate-resilient crops. In addition, government subsidies are provided for all forms of renewable energy (whether on or off grid). Another emphasis is additive environmental technology with subsidies for cleaning up (or greening) existing manufacturing facilities.

Improving the design and implementation of STI policy

To improve the governance of STI policy making, the prime minister created the National Innovation Council (NInC) in 2010.With a mandate to formulate a roadmap for innovations for 2010-20, the NInC introduced the New Science, Technology and Innovation Policy in 2013, which focuses on inclusive growth.

Country Charts

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Selected Highlights

Universities and public research

As in many emerging economies, PRIs and universities dominate India’s STI system. Public R&D expenditures accounted for nearly 62% of GERD in 2007 (the latest year for which data are available). At 0.50% of GDP in 2007, India is at the bottom of the OECD middle range (Panel 1a). Relative to GDP India has fewer world-class universities and a weaker S&T publication record in leading international academic journals (Panel 1b, c) than emerging economies such as Brazil, the People’s Republic of China and South Africa. As PRIs are governed by the ministries in charge of sectoral research areas, there is no consolidated public research budget. India does not so far have a central research funding body. The budget for PRIs has recently declined in real terms. Evaluations are used more systematically to assess research performance in universities.

Innovative entrepreneurship

The Small Business Innovation Research Initiative (SBIRI) is a new scheme launched by the Ministry of Science and Technology to nurture and mentor innovative emerging technologies and entrepreneurs. A distinctive feature of SBIRI is that it supports high-risk pre-proof-of-concept biotechnology research as well as late-development stages in SMEs led by innovators with a science background. There is specific support for the commercialisation of technologies that meet societal needs in health care, food and nutrition, agriculture, and other sectors. Other government agencies have similar schemes.

Technology transfers and commercialisation

India has no legislation on technology transfer and commercialisation. Various programmes provide access to knowledge developed in PRIs and HEIs. The creation and preservation of knowledge systems, the dissemination of knowledge, and better knowledge services are core concerns of the National Knowledge Commission. Created in 2005, it guides policy on these topics and directs reforms concerning education, science and technology, agriculture, industry, and e-governance. SBIRI also aims to strengthen the commercialisation of public research.


The presence of R&D centres of MNEs has accelerated India’s integration in global R&D and innovation systems. While India hosts several top corporate R&D investors in automotive, industrial machinery and IT industries, it lags China, Brazil and Russia in this regard (Panel 1e). However, India is at the OECD median, and well ahead of Brazil, China and South Africa in international co-patenting (Panel 1r), although its share of internationally co-authored S&T publications is very low, not only by OECD standards, but also compared to South Africa, Brazil and the Russian Federation. In recent years Indian universities have progressively opened up internationally, much more than PRIs. Various government departments have programmes that facilitate international mobility of human resources.

Skills for innovation

India has a large, young and growing labour force. However, low school attainment rates and the poor quality of the education system hamper the development of human resources for S&T and innovation. The National Skills Development Agency (NSDA) has been charged with co-ordinating and harmonising the skill development efforts of the government and the private sector with a view to achieving the skilling targets of the 12th Five-Year Plan. Related initiatives include the Confederation of Indian Industry (CII)’s Skills Centre at Chhindwara (in Madhya Pradesh), which teaches industrial techniques, and the joint CII-HPCL (Hindustan Petroleum Cooperation Limited) Swavalamban Project, which trains youth at the local level. The Ministry of Human Resources and the Ministry of Minority Affairs also have initiatives to reduce the gender and minority gap in S&T education, such as the Scheme for Providing Quality Education in Madrasas (SPQEM) and Sarva Shiksha Abhiyan (SSA).