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India’s claim to be catching up with the advanced economies, specifically on research and development in science, technology and innovation, deserves a reality check. Instead of laying out the growing role of multinational corporations in driving India’s R&D and the resultant risks arising from this, a series of headline indicators are cited by the government, to paint a rosy picture.

In December 2022, Dr Jitender Singh, Union Minister for Science and Technology said that India stood third in scientific publications, trailing only the United States and China. He said in November 2025 that India ranked sixth globally in resident patent filings. These statements reflect the Union government’s optimistic view that structural changes have enabled progress in the science, technology and innovation (STI) sector.

The same view features in the Department of Science and Technology’s National Science and Technology Survey, 2025-26. Dr Umesh V. Waghmare, secretary, Department of Science and Technology, observes in this report that India’s Gross Expenditure on Research and Development (GERD) has more than tripled over the past decade, rising from Rs 79,356 crore in 2013-14 to Rs 2,44,768 crore in 2023-24.

The report highlights that research and development (R&D) expenditure has grown faster than GDP in recent years, suggesting that STI is driving India’s economic growth. But the same report shows that multinational companies (MNC) accounted for 71.3% of business R&D in India in 2023-24, up from 49.9% in 2020-21.

It is this domination of MNC-led R&D that is being officially interpreted as India having developed a science, technology, engineering and mathematics (STEM) talent powerhouse – one that is ready to scale – and to claim that foreign MNCs now need incentives to spread into every corner of the country.

This perspective ignores the structural rigidities and policy gaps within which India’s national system of innovation (NSI) functions. The abridged reporting by the DST masks the real story behind the rise in BERD: that the direction of R&D and innovation will not be determined in India but in the headquarters of foreign players.

Apart from the growing domination of MNCs in R&D expenditure, the gap between R&D figures reported for Indian and foreign MNCs speak for themselves.



The reported rise of foreign MNCs’ R&D expenditure in the 2025-26 report (a survey conducted by DST) has occurred even when the number of R&D units of foreign MNCs covered in it fell from 139 to 124.

Inadequate disclosures

The sources and methods used by the Ministry of Science and Technology (MoST) also demand a complete disclosure. For instance, it has not shared the names of private sector entities covered in the survey. This disclosure is limited to the information available for public sector or joint sector undertakings.

MoST is treating the names of private sector entities as confidential information, which calls for a methodological correction. Its reporting practice is not consistent with, for example, the OECD’s Frascati Manual, 2015, which sets the global guidelines for measuring and reporting R&D, requires providing the public with a breakup of the magnitude and orientation of R&D of foreign affiliates, outsourced R&D and internal MNC group transfers.

The details of investors are available with MoST: Disclosures are required not only of the analysis of foreign and Indian MNCs’ R&D expenditure but also of the R&D of non-MNC private sector entities, which cater the most to home-market building.

MSME R&D output reporting

Micro, small and medium scale enterprises (MSMEs) undertake R&D and innovation by combining STI and doing, using and interacting (DUI) modes of learning. MSMEs are the primary engines for employment, informal sector survival and localised problem-solving. They are the backbone of India’s NSI. In many industrial sectors, in-house R&D efforts of MSMEs integrates the STI and the DUI modes.

In the report, there is no separate assessment of R&D outputs from foreign and Indian MNCs, non-MNC private-sector entities and Scientific and Industrial Research Organisations (SIROs), which are classified as non-profit organisations. It is important to note that the type of R&D work undertaken in India by MNCs of foreign origin is quite different from the type of R&D work undertaken by non-MNC businesses.

Sector-wise reporting of R&D outputs is required to separately assess the contributions of foreign and Indian MNCs, non-MNC private-sector entities and SIROs. MoST should disclose not only the list of foreign and Indian MNCs, non-MNCs businesses and SIROs, but also the R&D outputs by sector.

Unlike advanced capitalist nations, where private enterprises drive over 70% of R&D investments, India’s research architecture has been historically dominated by public funding. The excitement in the government is on account of the reported change in the composition of GERD.

Business Expenditure on Research and Development

While the GERD shows that India’s overall R&D spending is rising, BERD shows who, within the business sector, is driving that spending. BERD reporting has shown an especially strong upward trend in the participation of commercial enterprises whose R&D focus is not connected to the urgent development needs of the Indian people. The excitement over the rise of BERD is connected with the government (which talks about Viksit Bharat). But it is........

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