India’s Corporate R&D Awakening: From Snoozing to Strategizing 

For decades, Indian industry neglected research and development, with corporate R&D spending languishing at a meager 0.6% of GDP. This long-standing complacency is now being challenged by modern pressures, particularly from the electric vehicle and AI revolutions. Legacy firms like TVS and Hero are frantically ramping up investment, while others like Wipro are acquiring innovation through strategic buys. Tata Motors exemplifies a pragmatic, capital-efficient approach, building its EV supply chain through a network of specialized joint ventures. However, a significant funding gap remains for deep-tech startups, as traditional venture capital shies away from their long development cycles and high risk.

Ultimately, moving beyond this awakening requires a fundamental mindset shift from frugal imitation to celebrating foundational research and tolerating high-risk experimentation for sustained global competitiveness.

India’s Corporate R&D Awakening: From Snoozing to Strategizing 

For decades, India’s economic narrative has been one of impressive growth powered by services, generics, and cost efficiency. But a critical component has been conspicuously absent: a deep-rooted culture of research and development (R&D). While the world innovated, a large part of Indian industry seemed to be asleep at the wheel. 

The numbers tell a damning story. For thirty years, India’s R&D expenditure has stagnated at a paltry 0.6% of its GDP, one of the lowest figures globally. The lion’s share of the blame falls on corporate India, which contributes a mere 35% to this spending—a stark contrast to developed nations where private industry is the primary driver of innovation. 

However, a shift is finally underway. Faced with existential threats from electric vehicles (EVs), artificial intelligence, and global competition, some of India’s largest companies are jolting awake. They are not just opening their wallets; they are devising new, pragmatic strategies to bridge the innovation gap they slept through for years. 

The Sudden Spark: EV Pressure Ignites Legacy Giants 

Nowhere is this change more visible than in the automotive sector. The seismic shift towards electric vehicles has caught legacy manufacturers flat-footed. For years, R&D was a routine expense. Today, it’s a survival kit. 

Recent financial disclosures reveal a stunning surge in investment. Two-wheeler giants TVS Motor Company and Hero MotoCorp poured approximately ₹1,000 crore each into R&D in FY25—marking annual increases of 210% and 93%, respectively. This isn’t mere tinkering; it’s a frantic race to develop new electric platforms, battery management systems, and software-defined vehicles before new entrants seize the market. 

This “panic innovation” highlights a hard truth: Indian companies often innovate best when their backs are against the wall. 

The Acquisition Shortcut: Buying What You Didn’t Build 

For some, building deep tech capabilities from scratch is too slow. The quicker solution? Strategic acquisition. 

IT major Wipro’s recent $375 million purchase of Samsung’s Harman Digital Transformation Solutions (DTS) is a textbook case. This move isn’t about adding more bodies for routine IT services; it’s a direct infusion of high-value engineering, research, and development (ER&D) talent and intellectual property. It’s an admission that organic growth in cutting-edge areas would take too long, so they are buying a ready-made innovation engine. 

This approach contrasts with a firm like HCLTech, which has been patiently building its ER&D division for over 26 years. That division now contributes a steady 15% of revenue, acting as a crucial hedge against the volatility in its traditional IT services business. Wipro’s acquisition suggests a desire to fast-track a similar outcome. 

The Joint Venture Model: Assembling the Puzzle Pieces 

Perhaps the most uniquely Indian approach to the R&D problem is the joint-venture-for-each-component model, masterfully executed by Tata Motors in the EV space. 

As Maruti Suzuki’s chairman R.C. Bhargava recently pointed out, the biggest hurdle for India’s EV sector is a lack of fundamental cell manufacturing expertise. Rather than attempting the monumental—and expensive—task of developing every component in-house, Tata Motors, via Tata Autocomp, has formed a series of strategic joint ventures with specialized global partners for critical parts like batteries, motors, and power electronics. 

This turns the EV supply chain into something resembling Apple’s iPhone model: sourcing the best available components and focusing internal R&D on integration, software, and the final product. It’s a pragmatic, capital-efficient strategy that bypasses the need for massive, upfront R&D investment and accelerates time-to-market—a crucial advantage in a fast-evolving industry. 

The Deep-Tech Dilemma: Where VCs Fear to Tread 

While legacy firms play catch-up, what about the agile startups meant to be at the forefront of innovation? The challenge for deep-tech startups—those working on advanced materials, AI core tech, photonics, or quantum computing—is a critical funding gap. 

Traditional venture capital, geared towards quick scaling and rapid exits in software and e-commerce, often shies away from deep-tech. The timelines are long (7-10 years), the risks are high, and the milestones are complex and scientific, not just commercial. 

As Vishesh Rajaram of Speciale Invest—a rare VC firm focused exclusively on early-stage deep-tech—explains, funding this sector requires a “non-linear” approach. It demands investors who can break down scientific risk into manageable buckets, define technical milestones, and provide patient capital that understands the journey from “zero to one.” This absence of a proven playbook is precisely why most major VCs avoid the game, leaving a yawning gap in the ecosystem. 

The Real Wake-Up Call: A Mindset Shift 

The recent uptick in spending and deal-making is promising, but it addresses the symptom, not the disease. The core issue remains a historical mindset that prioritized frugal engineering, imitation, and rapid commercialization over foundational research. 

True, sustained innovation requires more than just increased budgets or smart M&A. It demands a structural change: stronger industry-academia collaboration, government incentives for genuine research (not just development), and a corporate culture that celebrates experimentation and tolerates high-risk, high-reward projects. 

The awakening has begun. Some companies are hitting the snooze button, others are brewing a strong coffee, and a few are already sprinting. But for Indian industry to truly compete on the global stage of innovation, it needs to stop just waking up and start building a whole new bed to sleep in—one engineered, researched, and developed right here at home