India's R&D Gap and ANRF — Building Technological Self-Reliance

Imagine your whole water supply comes from one well owned by someone else. One day they put a lock on it. You can beg, negotiate or pay more — but you cannot make water appear. That is India’s technology dependence today. Advanced semiconductor chips, EUV lithography machines, AI processors, specialty chemicals — India is that village, and the well-owners (the US, China, Japan, the Netherlands, South Korea, Taiwan) increasingly use that control as a weapon.

The March 2025 Strait of Hormuz crisis was the latest wake-up call: India imports over 85% of its crude, and a single chokepoint squeezed its energy lifeline. But the deeper lesson is this — oil can be rerouted; technology cannot. If a country denies you a critical chip, machine or compound, there is no alternative route: you make it yourself, or you go without.

This is the context for the Anusandhan National Research Foundation (ANRF) — India’s most ambitious attempt yet to move from being a consumer of technology to a creator of it. The stakes could not be higher, and the clock is ticking.

India spends only 0.64% of GDP on R&D (GERD — Gross Expenditure on R&D). How low that is:

Country	R&D (% of GDP)	Private-sector share of R&D
Israel	5.71%	~85%
South Korea	4.81%	~78%
United States	3.59%	~75%
Germany	3.13%	~67%
China	2.56%	~77%
India	0.64%	~36%
Global average	~1.7%	~60-70%

Source: OECD R&D Database 2022; DST R&D Statistics 2022-23; PIB.

What the numbers mean

R&D spending is like seeds planted for the future — more seeds today, more innovations tomorrow (medicines, materials, chips, energy). India plants far fewer, and even within that, the government does most of the work: private firms fund only ~36.4% of India’s R&D, versus 75%+ in China, Korea and the US. Government research tends to be basic science — vital but slow; it is private R&D that turns lab discoveries into products, jobs and exports. Indian IT bills ~$250 billion a year but spends a tiny fraction on original R&D — selling labour, not knowledge; the back-office, not the boardroom.

The brain-drain crisis

Between 2015 and 2024, over 13 lakh Indians renounced citizenship, many highly skilled. In 2024, 70% of students who left held STEM degrees; nearly 40% of IIT graduates leave after graduation. India recorded the world’s largest net outflow of AI talent in 2025 (a score of −16.9, more than double Canada’s −7.1). The irony: India trains world-class talent at subsidised public institutions (IITs, IISc, AIIMS) and then watches it power labs in Boston, Silicon Valley, Munich and Seoul.

Why India lags — structural roots

• Short-termism: firms chase quarterly profit; R&D is risky and slow — why build a molecule when you can licence one?
• Weak industry-academia links: in the US, MIT works with Boeing, Stanford feeds Google; in India, IITs produce engineers for American firms, not Indian labs.
• Captive-market comfort: a large domestic market rewards importing and assembling over innovating.
• Regulatory complexity: labs, foreign hires, equipment imports and patents face heavy bureaucracy.
• Low research culture: a fresh PhD earns a fraction of an MBA; research carries less prestige than medicine, engineering or the civil services.

ANRF is a statutory body under the ANRF Act, 2023, notified on 5 February 2024. It replaces and subsumes the Science and Engineering Research Board (SERB); the idea came from Chapter 17 of NEP 2020.

India already had many research bodies — CSIR, DST, DRDO, ICAR, ICMR, DBT — all excellent, but government-run and siloed, like the government running its own restaurant (deciding the menu, cooking, serving). ANRF is designed as a food park: the government builds the infrastructure and sets the rules, then invites private firms, startups, universities, philanthropists and the diaspora to come in and create.

Governance (three tiers)

• Governing Board — chaired by the Prime Minister; Vice-Presidents are the Ministers of S&T and Education.
• Executive Council — chaired by the Principal Scientific Adviser (PSA).
• CEO — the operational head (first full-time CEO appointed after Prof. Abhay Karandikar served as interim CEO).

The administrative ministry is the DST, but ANRF serves stakeholders across all departments.

The money architecture

1. RDI (Research, Development & Innovation) Fund — ₹1 lakh crore over 6 years. For private participation, run as a fund of funds: government anchor capital crowds in private firms, VCs, Global Capability Centres (GCCs) and CSR. The catalytic logic: for every ₹1 the government risks, the private sector should eventually commit ₹5–10. Companies can enter as limited partners, as eligible tech entities, via JVs with startups/GCCs, by routing CSR through the ANRF Innovation Fund, or by cost-sharing a pre-competitive project.

2. ANRF Core — ₹50,000 crore over 5 years. For basic science (physics, chemistry, biology, materials, maths) — the “boring but essential” work. No product next quarter, but breakthroughs next decade: penicillin came from basic microbiology, mRNA vaccines from decades of RNA biology, transistors from solid-state physics.

Key programmes: PMECRG (PM Early Career Research Grant), IRG (Inclusive Research Grant), PAIR (hub-and-spoke pairing of top and developing institutions), the JC Bose Grant (senior scientists, high-risk research), and the EV Mission.

Feature	Old system (CSIR/DST/SERB)	ANRF
Funding source	Mostly government	Govt + private + philanthropy + diaspora
Decision-making	Bureaucratic, slow	Streamlined, mission-mode
Industry role	Peripheral, advisory	Central — co-investor and co-creator
Scope	Discipline silos	Cross-disciplinary, all-of-government
Private engagement	Limited, project-based	Multiple entry points, fund-of-funds
Accountability	Process-driven	Outcome-driven, tied to procurement/regulation

History gives the strongest reason for optimism. When India joined the WTO (1995) and accepted product patents under TRIPS (fully effective 1 January 2005), everyone predicted catastrophe for Indian pharma, which had been built on reverse-engineering Western drugs. The opposite happened. Indian companies did not retreat — they pivoted:

• Mastered process chemistry — making the same drugs via new, efficient routes rather than copying the molecule.
• Cracked global regulation — India now has the most US-FDA-approved plants outside the US.
• Used legal safeguards — Section 3(d) of the Patents Act blocked “evergreening”; the Novartis judgment (2013) upheld it.
• Scaled massively — pharma exports grew from under $600 million (1995) to over $27 billion (2024).

Today: India supplies 20% of the world’s generic medicines by volume, provides 70% of vaccines for WHO immunisation programmes, is the 3rd-largest pharma producer by volume, and exported 66 million+ COVID vaccine doses to 95 countries under COVAX. The new challenge is broader — semiconductors, AI, deep-tech, advanced materials, quantum — but the logic is identical: if Indian pharma could do it, Indian industry can do it again.