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Research and Development in India

May, 2014


India is poised to be third largest economy along with US and China, to play a leading and important role in global economy.

Research is the keystone for widening India’s production potential and universities must be the hotbeds of research activity, said Mr Pranab Mukherjee, President of India. The President called upon Central Universities to be the launch pads of innovative ideas and institutionalise structures that can identify ingenuous ideas and mentor them into viable products.

India has been ranked as the world’s sixth most ‘innovative’ country, according to multinational conglomerate GE's Annual Global Innovation Barometer.

Dr Manmohan Singh, the Prime Minister of India, urged the country's private sector and industry to invest in enhancing education and research in the country, as India looks to increase its gross enrolment ratio to 30 per cent by 2020. The government is currently in the midst of rolling out the Rashtriya Uchchatar Shiksha Abhiyan (RUSA) which will create 278 new universities and 388 new colleges in addition to converting 266 colleges to model degree colleges by the end of the 13th Five Year Plan (2017-22).

Indian R&D Sector and Global Impact

The services sector which includes research and development (R&D), testing and analysis besides other related segments attracted foreign direct investments (FDI) worth US$ 39,039 million between April 2000 to January 2014, an increase of 18 per cent to the total FDI inflows in terms of US$, according to data published by Department of Industrial Policy and Promotion (DIPP).

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

India and Sudan have good potential for enhancing cooperation in promoting renewable energy and offered to provide Indian assistance for developing renewable energy resources in Sudan, said Dr Farooq Abdullah, Union Minister of New and Renewable Energy, Government of India.

Key Developments and Investments

Big innovations are required and will continue, but the idea here is to open opportunities for effective, high-volume and low-cost solutions, highlighted Mr Gopichand Katragadda, Chairman and Managing Director, GE India Technology Centre (GE-ITC).

The non-small cell lung cancer (NSCLC) therapeutics market value in the Asia-Pacific region is expected to grow at a compound annual growth rate (CAGR) of 6.3 per cent to touch US$ 2.9 billion by 2019 from US$ 1.8 billion in 2012, according to business intelligence provider GBI Research.

The alumni network of Indian Institute of Technology (IIT) Madras is planning to raise Rs 100 crore (US$ 16.39 million) this year for various purposes, including funding innovations and start-ups of IITians.

The following are some of the key developments in the sector:

  • The University of Oxford has approached the Government of India seeking collaborations in medical technology research and training.
  • Institute of Finance and International Management (IFIM), Bengaluru, has joined hands with the UK’s Plymouth University to encourage interaction between faculty members and students in various academic and research activities.
  • The Sweden-based Sandvik is setting up a R&D centre in Pune and has concluded land acquisition in Chakan for building a new multi-nodal facility which is a part of its emerging markets strategy.

Some of the major investments:

  • Bosch has opened a new research and technology centre in India. The company plans to invest Rs 1,200 crore (US$ 196.72 billion) in the country this year.
  • Denmark-based Danfoss Industries plans to set up a greenfield manufacturing and a R&D hub near Chennai in Tamil Nadu.
  • Honda Motors’ facility, Honda Genbetsu India (HGID), would focus on research and development and is likely to come up at the company's existing manufacturing plant at Greater Noida. The unit will likely come at an initial investment of around Rs 500 crore (US$ 81.97 million). Honda Car India said it is committed to the Indian market and will expand the focus of its R&D operations towards more India-oriented products in coming years.
  • Mercedes-Benz's India research unit aims to grow its business by 58 per cent in the coming 12 months. Mercedes-Benz Research and Development India's (MBRDI) approach underlines the trend of overseas engineering companies, including auto firms, setting up captive units in India. By 2012, the country had 874 engineering R&D captive centres, of which 6 per cent were in autos, according to data tabulated by management advisory firm Zinnov. These captive centres' growth increased from US$ 8.3 billion in 2011 to US$ 9.3 billion in 2012, a growth of 11 per cent.
  • Pratt & Whitney (P&W) plans to set up an engine training centre at Hyderabad airport to train aircraft engineers and technicians on current and new engine models. The Hyderabad training facility will be Pratt & Whitney's third such centre in the world and will be operational early next year.

Government Initiatives

A ‘Research Funding Organisation’ is being set up to fund research projects selected through a competitive process. This was proposed by Mr P Chidambaram, the Finance Minister, while presenting Interim Budget 2014-15 in the Parliament.

The Ministry of Micro, Small and Medium Enterprises (MSME) will create the ‘India Inclusive Innovation Fund’ to promote grassroot innovations with social returns to support enterprises in the MSME sector with an initial contribution of Rs 100 crore (US$ 16.39 million) to the corpus of the fund.

The Union Cabinet gave its approval for continuation of the Mission on Nano Science and Technology (Nano Mission) in its Phase II in the 12th Plan at a total cost of Rs 650 crore (US$ 106.56 million). The Mission's programme will strengthen activities in nano science and technology by promoting basic research, human resource development, research infrastructure development, international collaborations, orchestration of national dialogues and nano applications and technology development.

The Cabinet Committee on Economic Affairs (CCEA) has approved the implementation of the National Mission on Agricultural Extension and Technology (NMAET) during the 12th Plan. The Mission will have a total outlay of Rs 13,073.08 crore (US$ 2.14 billion).

The CCEA has also approved the proposal of the Department of Health Research (DHR) in the Ministry of Health & Family Welfare for the central sector scheme of Human Resource Development for Health Research under the 12th Plan at an estimated cost of Rs 97 crore (US$ 15.90 million). The Scheme inter alia provides for grant of 2,585 fellowships for training in Indian and abroad and development of 1,694 research projects by the trainees during the 12th Plan.

The Ministry of Food Processing Industries has entered into agreements with some developed countries viz Germany and France for bilateral co-operation in the field of Food Processing. The memorandum of understanding (MoUs) relate to collaboration in teaching and research in the food processing sector.

IIT Madras has established a centre for technology and policy to address development problems and help technology innovators work more effectively in a given policy setting. The network formally launched an innovation fund of US$ 600,000 last year, one-fifth of which has been invested in seven- eight start-up firms as seed funding.

Road Ahead

India with its strong workforce, good engineering talent and a partner-friendly government is focusing on research based innovation and implementation of quality new ideas for growth and progress.

To drive sustained innovation, it is important to initiate the spirit of innovation and foster an innovation life cycle. The need of the hour remains in thinking out of the box and work in new ways with new partners to harness emerging and potential markets. India as a market remains important and the competitiveness of Indian companies in global markets have made them valued partners and specialised global, independent technology suppliers.

Exchange Rate used: INR 1 = US$ 0.01639 as on March 22, 2014

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