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Research and Development in India

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Research and Development in India

June, 2014

Brief Introduction

India has been ranked as the world’s sixth most ‘innovative’ country, according to GE’s Annual Global Innovation Barometer. Research is imperative for widening India’s production potential and universities must be the hotbeds of research activity, as per Mr Pranab Mukherjee, President of India. The President has called upon all Central Universities to be the launch pads of innovative ideas and institutionalise structures that can identify inventive concepts and develop them into viable products.

The government has shown support for the research and development (R&D) sector in the country. For instance, in September 2013, the Union Cabinet approved the proposal for establishment of the autonomous National Institute of Solar Energy (NISE)—under the administrative control of the Ministry of New and Renewable Energy (MNRE). The institute will act as the apex centre for research and technology development and other related activities in the area of solar energy technologies in India.

Market Size

India was the eight-largest country in terms of R&D investments in 2013, with investments in the sector likely to increase to US$ 44 million in 2014 from US$ 40 billion in 2012.

The country’s share of global R&D spending rose to 2.7 per cent in 2013 from 2.6 per cent in the previous year.

The number of multinational corporation (MNC) R&D centres in India has increased at a compound annual growth rate (CAGR) of 14.4 per cent to 1,031 during the first half of 2013. Bengaluru has 39 per cent of MNC R&D centres; Mumbai and Pune both have 19 per cent.


KPMG International has launched KPMG Insights Labs, a virtual R&D centre in Bengaluru, which is its third centre after the UK and the US. Insights Labs will serve as a global innovation hub with the objective to develop and nurture data-driven business solutions for KPMG member firms' clients.

"The Insights Labs are intended to fill a critical gap for clients. While companies are quickly pursuing strategies to capture and examine their data – the 'Big Data' chase – what we're providing is an environment for putting data-driven solutions to the test," as per Mr Mark Toon, Global Leader, Data and Analytics and CEO, KPMG Capital.

US-based university Virginia Tech, in association with infrastructure development firm Marg Group, has established a research centre for sustainable technologies near Chennai. The institute will look at sustainable technologies in water, energy, renewable materials, and nano-scale science and engineering. Over US$ 3 million has already been invested in the research centre that has been set up through a joint trust – Virginia Tech Marg Swarnabhoomi India Trust.

Mumbai-based Blue Star Infotech is planning to acquire in the US in 2014 and is presently engaged in building its banking lines for the purpose. “We are currently engaged in making financial provisions for the acquisition that we intend to make in the US this year,” as per Mr Sunil Bhatia, MD and CEO, Blue Star Infotech. The company also plans to hike its investment towards enhancing its intellectual property (IP) and development of labs.

Hindustan Aeronautics Ltd (HAL) and IIT Kharagpur are collaborating to establish a Faculty Chair at the Department of Aerospace Engineering to give thrust on R&D and academic work in emerging and new technologies in the aerospace industry. The objective of this initiative is to conduct applied research as well as tackle multi-disciplinary problems in the field of aerospace technology and related applications.

Massachusetts Institute of Technology (MIT), Harvard University, and University of California, Berkeley have joined hands with the Indian Institute of Management, Ahmedabad (IIM-A) to develop ambient pollution measuring products, field water quality testing and filtration equipment, and mobile technologies, for health purposes. These institutions will work together to address issues of the poorer sections of the society in and around Ahmedabad and Gandhinagar, Gujarat.

Bengaluru’s Institute of Finance and International Management (IFIM) has entered into an agreement with the UK’s Plymouth University in a bid to encourage collaboration between faculty members and students in academic and research activities. The arrangement includes exchange of information and materials of mutual interest, as well as student exchanges.

Government Initiatives

Steel Authority of India Ltd (SAIL) has earmarked plans to market additional volumes of steel that will be produced out of its newly integrated steel plants. "The fact that the products will be made using cutting-edge technology and under strict quality control is an obvious advantage," as per Mr C S Verma, Chairman, SAIL. SAIL's specialised Research & Development Centre for Iron & Steel (RDCIS) is key to this strategy of developing new products. RDCIS has 207 research executives, 15 major laboratories and six pilot or simulation facilities.

The Government of India is investing heavily in science and technology during the 12th Five-Year Plan period and has drawn up an ambitious agenda, as per Mr K Kasturirangan, Space scientist and member of the Planning Commission. The government has proposed to increase the number of full-time researchers/scientists from 154,000 in 2011 to 250,000 by the end of the Plan.

New Zealand has announced new initiatives to further deepen its education collaboration with India. A joint call for research proposals for New Zealand and Indian academics has been made to enhance research collaboration across a range of areas.

Road Ahead

The Indian government has plans to involve the private sector in R&D, specifically for sectors such as vaccines, drugs and pharmaceuticals, and solar energy, among others. The Centre has contributed US$ 1.1 billion public–private partnership fund to support R&D in the country. The government also provides 200 per cent deduction for capital and revenue expenditure of manufacturing companies with in-house R&D. Income tax exemption of 125–175 per cent is also provided on donations made to colleges, universities and other scientific associations.

Exchange Rate used: INR 1 = US$ 0.01685 as on June 4, 2014

References: Media Reports, Press Information Bureau (PIB), Innovation Council of India, Union Budget 2014-15, Department of Industrial Policy and Promotion (DIPP)