Indian Manufacturing R & D at 2047- An Open Letter to People of India.

–Sanjay Chavre, Advisor, TAGMA India

Manufacturing forms a vital part of the economic growth and global competitiveness of nations. India’s manufacturing sector currently contributes around 17% to the GDP, a figure notably lower than other leading economies like China, South Korea, and Germany. Despite having strong growth potential, Indian manufacturing has historically focused on fulfilling domestic demand rather than building global competitiveness. In contrast, developed manufacturing nations have achieved their success through sustained industrial innovation and robust Research and Development (R & D) ecosystems. This article explores the current status of India’s manufacturing R & D landscape, the reasons behind its limited industrial R & D so far, the impact of this gap on the nation’s economy and people, and pragmatic government strategies needed to accelerate India’s journey to becoming a global manufacturing powerhouse.

Current manufacturing contribution to GDP is about 17% with CGCR of 5.2. While other top nations GDP wise have much higher contribution of manufacturing to their GDPs:-

India have been manufacturing basically for domestic markets. Till 1991 , India was not exposed to global competition domestically. Thus, it developed a weak base of global competitiveness of its manufacturing mainly due to protection.

Developed manufacturing economies built a strong export base because of their global competitiveness. This global competitiveness was built around strong industrial innovations and R & D, while Indian manufacturing till today has very limited industrial R & D.

Main reasons for lack of industrial R & D are:-

1. Domestic protection atleast till 1991;
2. Lack of appetite in corporate to use industrial R & d as a business plan / strategy;
3. Lack of industrial R & D eco-system including:-
   – Lack of thoughts of the government and the industry to focus on industrial R & D;
   – No risk appetite;
   – No risk funding options,
   – Lack of corporate success examples of industrial R & D;
   – Lack of adequate government support when compared to global practices;
   – Lack of institutional infrastructure of global class;
   – Lack of industrial R & D manpower; (even IIT trained engineer goes to sell consumer products through IIM way instead of Industrial R & D because industry does not pay to top notch engineer);
   – Lack of purchasing power of masses to buy high tech thus more expensive products.

Impact of Lack of Industrial R & D on the nation and the industry

• Lost opportunities for employment – particularly higher income employment;
• Thus lost opportunities in wealth creation and distribution; which could have led to better quality of life being enjoyed by China, Japan, Korea, EU, UK, USA, etc.;
• Lost economic opportunities as a result of lost opportunities of lower production volumes as opportunities for global markets lost due to making lower quality products for domestic market;
• Instead of being a source for haute tech products, India is a market,
• Much lower tax collection as a result;
• Indian people have much less access to the haute products;
• Strategically exploited by the World in the current geo-politics;

Thus in short lost opportunities for the industry as well as the people of India.

Focus in industrial R & D will enable the country to generate and distribute wealth better leading to much lower disparities, inequalities and negativities  in society—a happier India.

What can be done by the Governments

Re-write Industrial R & D Policy: The path to a more industrialized and self-reliant Indian economy hinges on making R&D a central pillar of the national business strategy. This requires a fundamental shift in mindset, supported by a enabling policy environment and a collaborative spirit across the innovation ecosystem. There are four tools for change / progress:- Need, Greed, Fear and a combination of them.

• Need: Make aware the decision makers in the Government, Industry, other stakeholders e.g. social media, press, people to use the strategy of industrial R & D for betterment of the country as already done by China, USA, EU, UK, Japan , South Korea etc.
• Greed: Provide financial and fiscal incentives more than the global best practices to kick start and accelerate industrial R & D not only by Indian companies but MNCs in India. The spurt may be provided to Indian manufacturing & R & D in industry, institutions, R & D Centres, higher education and even starting from primary education to promote the spirit of enquiry / quest / thirst for knowledge.
  • Award , reward and recognize the industrial R & D;
  • Set up R & D eco-system including infrastructure jointly with industry and run by them;
  • Implement proven global best practices like Patent Box, Death Valley Risk Financing; Moratoriums in financing of industrial R & D; CSR in priority sector industrial R & D; Lower / zero corporate rate for specified duration on products commercialized through Indian industrial R & D;
  • Management of the Anusandhan National Research Foundation (ANRF) by professional / experts in industrial R & D;
  • In every IIT / NIT / Govt R & D Institution, a programme for industrial R & D run by stakeholders;
  • Bi-multi lateral industrial R & D programmes;
  • Channelizing retired global industrial R & D experts to Indian industrial R & D , training and education;
  • Instituting Largest Global Industry R & D fair in India; and
  • Cover risks of industrial R & D through Government instruments.
• Fear: Develop mandatory standards of standards in increasing order supported by Government measures to achieve the same by Indian manufacturing.

Conclusion

Use of Industrial R & D is the missing piece of national and corporate strategy for excellence. India needs to inculcate the spirit of enquiry and inquisitiveness in in its toddlers as much in decision makers. India must create ecosystems, policies, tools and instruments to promote industrial R & D in priory sectors to begin with. Low hanging fruits are awarding and incentivising industrial R & D better than the global best atleast in sectors where we have comparative advantage, needs and aspirations. It is best done through an Act supported national transformative action plan now or never.

About the Author

Sanjay Chavre is Advisor to TAGMA India.

A respected technocrat and policy strategist, Mr. Chavre has been a pivotal figure in the evolution of India’s manufacturing and tooling ecosystem. With decades of experience at the intersection of government and industry, he has contributed to the development of forward-looking policies that promote indigenous technology, strengthen domestic capabilities, and uplift MSMEs within the tooling and precision engineering sectors.

Mr. Chavre has held key roles in various government departments. He has been instrumental in formulating and executing initiatives that align with India’s long-term vision for industrial growth and self-reliance. His expertise lies in enabling public-private collaboration, fostering innovation ecosystems, and building frameworks that support sustainable industrial development.

In his current role as Advisor to TAGMA India, he continues to guide efforts aimed at enhancing the global competitiveness of Indian toolmakers. His insights have been vital in positioning the Indian tooling industry as a reliable and technologically advanced partner in the global supply chain.