Speaking at the Kautilya Economic Conclave 2026, Finance Minister Nirmala Sitharaman underscored the critical role the private sector must play in driving India's research and development (R&D) efforts. The nation aims to move beyond manufacturing-led growth and cultivate advanced capabilities in emerging technologies, requiring a significant increase in private investment in innovation.
Sitharaman highlighted a notable disparity in India's R&D expenditure, which currently stands at 0.83% of its GDP, significantly lower than the OECD average of 2.7%. A key concern is the private sector's limited contribution, accounting for only 36% of the country's total R&D spending. The Finance Minister stressed that scaling up both overall R&D investment and private sector participation is crucial for strengthening India's innovation capacity.
₹1 Lakh Crore RDI Scheme to Boost Innovation
To facilitate this pivotal shift, the government has introduced a substantial ₹1 lakh crore Research, Development and Innovation (RDI) Scheme. This initiative is designed to bolster India's ability to develop new technologies and effectively translate research findings into tangible economic activities. The focus on private investment aligns with India's strategic preparation for a dynamic global economy, where technological prowess directly influences productivity, strategic resilience, and national competitiveness. Sitharaman affirmed that private investment is expected to spearhead the upcoming cycle of growth, particularly in research and innovation.
From 'Made in India' to 'Imagined and Made in India'
A core objective articulated by the Finance Minister is to transition from a 'Made in India' paradigm to an 'Imagined and Made in India' approach. This signifies a heightened emphasis on indigenous development of intellectual property, advanced technologies, and innovative products, moving beyond a primary focus on manufacturing. This R&D push is also framed within the broader context of building economic resilience amidst increasing global uncertainties. Sitharaman identified key areas such as strategic resource security, semiconductor technology, and other critical technologies where India urgently needs to enhance its domestic capabilities.
AI's Impact on Skills and Industry-Academia Collaboration
The address also touched upon the transformative impact of artificial intelligence (AI) and other frontier technologies on employment landscapes. These advancements are reshaping workplaces and altering the skill sets demanded by employers. Sitharaman called for stronger partnerships between industry and educational institutions, advocating for increased apprenticeships and workplace learning opportunities. She emphasized that training programs should integrate digital and AI competencies with professional knowledge, advocating for continuous learning to be accessible throughout an individual’s career. Greater participation from companies is expected to bridge the gap between research capabilities and commercially viable technologies and products, aligning with India's 2047 development goals.