Increasing R&D investment in India: Need of the hour


India needs to become technically self reliant in key areas such as natural resources, agriculture and defense whereby its R&D investment has been lacking as also the only incentive available for the private sector through DSIR certification leading to income tax benefits u/s 35 (2AB) of Income Tax Act is being withdrawn from 1st April 2020 which STIAC under PM office has recommended to continue along with other steps to improve R&D investment scenario in India including public research institutions.


Although we all are aware that R&D investment is a critical area for India to create appropriate technologies for its social problems it has been an underinvested area both by the Government as also the private sector.

In today’s age of disruption and hyper innovation it is extremely relevant for organizations to be future ready which requires an open mindset towards innovation and R&D investment is a critical barometer of the same.

To address this issue, Science Technology and Innovation Advisory Council (STIAC) under Prime Minister of India has recommended that companies in key sectors set aside funds for Research & Development (R&D) to the tune of 2% for developing and implementing technologies related to priority areas.

Another important recommendation made by STIAC headed by Vijay Raghavan is against the move of the Govt. of India to withdraw providing tax benefits to companies recognized by Dept. of Scientific & Industrial Research (DSIR) under section 35 (2AB) of the Income Tax Act as part of sunset clause applicable from 1st April 2020.

This is an important consideration since this is the only incentive available to the private sector for making investment in R&D and globally countries such as USA, Singapore and Australia are progressive with benefits to the tune of 400% of the R&D investment made. In fact Europe which was under severe recession over the last few years increased the investment in innovation so that it could disrupt the market with cutting edge technologies as also solve important issues related to environment, natural resources and so on.

Another important area being touched upon is having a faster grant process for various Govt. departments and organizations such as BIRAC, GITA, TDB etc. to ensure that the innovation funding is made available in time which is very critical for researchers to achieve market success.


Although the recommendations is a step in the right direction; it is imperative that it is followed up with and implemented at the earliest to ensure that the private sector and specially start ups have both the incentive and the financial support to invest in R&D in India.

The R&D investment ecosystem is lacking in India and requires the right policies and investment by Govt. in priority areas to solve societal problems as also take advantage of the disruption which is now gripping various industry sectors and moving at a much faster rate than ever before where India has a huge advantage both due to the young talent pool and a large captive market.

*** Keywords:

R&D investment, DSIR, Section 35 (2AB), R&D investment, STIAC

About the Author:

Rajeev Surana is a seasoned professional in the area of innovation ecosystem with 10+ years experience as innovation professional having worked with startups, large companies and MNCs in the area of intellectual property, R&D investment, technology commercialization.

Rajeev is a qualified Patent Attorney with a love for running which takes him to different parts of the world.

He is also author of the layman’s guide ‘Protect Your Ideas’ published in 2012 as also contributor to various publications such as Entrepreneur magazine, Your Story etc.

Rajeev is founder at Scinnovation Consultants Pvt. Ltd. as also an exciting organic footwear company, Colour Me Mad and based out of Mumbai, India.