India, as a signatory to the World Trade Organisation(WTO) and the agreement on Trade-Related Intellectual Property Rights (TRIPS), entered the product patent regime in 2005, which has resulted in a significant increase in innovation.

A 4.6 per cent growth in per capita gross domestic product (GDP) in 2008–09 has resulted in an increase in disposable income, leading to an enhanced demand for better and more innovative products.

India is fast emerging as a potential R&D destination for global companies, outpacing China, due to low costs as well as faster and more cost-effective time-to-market opportunities and the availability of a significant number of scientists.

According to a survey undertaken by the National Knowledge Commission in 2007, the intensity of innovation is the highest in the operations department, followed by the marketing department, in most large companies. Only pharmaceutical companies claimed that maximum innovation takes place in their R&D labs.

The Department of Science and Technology established National Innovation Foundation (NIF) in 2000, with the objective of providing institutional support in scouting, spawning, sustaining and scaling up grassroot green innovations and helping them transition into self-supporting activities.