India's Path to Viksit Bharat: Why Obsessing Over R&D Alone Is a Dangerous Distraction

Introduction

India's innovation narrative is at risk of being hijacked by a single-minded, almost obsessive focus on ramping up R&D spending—chasing elusive GERD-to-GDP targets (still stubbornly stuck around 0.6–0.7% in recent years, with private contribution limping at 36–37%) as if percentages alone will catapult the country to global leadership. This fixation, while well-intentioned, dangerously diverts attention from an equally—if not more—critical imperative: massive, irreversible capacity expansion.

In a vast economy like India's, with its demographic scale, infrastructure deficits, and manufacturing ambitions, R&D without corresponding physical capacity is largely performative—ideas without factories, simulations without fabs, breakthroughs without output. 

Capacity expansion announcements by large conglomerates in 2025 tell a far more compelling story: Adani Group's record ₹1.5 lakh crore FY26 capex push across renewables, data centres, ports, and more; Reliance's 7.5 lakh crore investment in integrated renewable complexes, green hydrogen, and AI infra over the next five years; JSW Group's multi lakh crore investment across it's portfolio companies in the next five years -- are just a few examples. It is estimated that Indian industrial conglomerates have a pipeline of ~$800 billion of investments over the coming decade. These are not marginal tweaks—they are multi-fold leaps in gigawatts, millions of tonnes, and national-scale assets.

Policy circles that fetishize R&D metrics while underplaying this unglamorous reality risk squandering India's breakout window. In this blogpost I argue for a balanced framework: elevate capacity-building, redesign research through universities and advanced tech, and deploy targeted public enablers—without falling for the siren song of standalone labs or disruption-for-disruption's-sake.

1. Capacity Expansion: The Real Engine, Not the Sidekick

Single-minded R&D obsession creates a dangerous illusion: that more papers, patents, or lab budgets will automatically translate to economic muscle. In reality, for a country building everything from steel plants to solar farms to nuclear reactors, capacity expansion is the primary lever for jobs, exports, resilience, and absorbing the workforce.

Look at the ground truth in 2025 alone: conglomerates like RIL, Adani, JSW, Tata, Aditya Birla, Mahindra, Greenko, etc drove aggressive, often record-breaking expansions — and are planning even more (eg, nuclear energy generation planning by Adani, Tata, JSW etc by deploying small modular reactors). These moves deliver tangible scale in capital-heavy sectors where execution, balance-sheet strength, and institutional continuity trump flashy novelty.

Legacy conglomerates dominate here for good reason—they bear long-gestation risks that startups or pure R&D outfits cannot. Policy must stop treating capacity as secondary. Incentives like accelerated depreciation, priority lending, land facilitation, and explicit capex-R&D linkages (e.g., tax credits for expansions incorporating indigenous innovations) would refocus energies where they belong: building India first, then innovating to make it better.

2. Universities as the Cost-Effective Core of Transformed Research

The fixation on standalone R&D centres—public labs bloated with overheads or private silos duplicating efforts—is wasteful and outdated. Research can and should be productivized by embedding it in universities: professors as lead researchers, doctoral students as assistants — leveraging existing ecosystems, without hiring armies of full-time staff. This model is not just cheaper—it's smarter. 

Existing conglomerate-backed private universities must be incentivised to scale into multi-campus, multi-stream giants that not only conduct the conglomerate's R&D, but also support startups/MSMEs (through shared labs, incubation, tech transfer). Central universities can partner national missions (semiconductors, space, defence); while state universities can partner with the respective state government (renewables in Gujarat, biotech in Telangana, etc).

Regulatory streamlining and flexibility, tax breaks, land grants, and matching funds can further enable this. The payoff: research becomes integrated, talent pipelines deepen, and costs plummet—freeing resources for actual breakthroughs rather than bureaucratic duplication.

3. Supercomputing and Quantum: Upgrading the "White-Coat" Factory Floor

Research processes are ripe for transformation. Just as AI upended white-collar work, supercomputing and quantum machines will likely automate, accelerate, and democratize "white-coat" (ie, R&D) work—molecular simulations, materials discovery, optimization—in pharma, energy, climate, and beyond.

India's pragmatic quantum goals, through the National Quantum Mission, avoids supremacy traps. The mission prioritizes usable deployment. Going ahead, it should integrate quantum into university curriculums, enable tier-2 access, and link to capacity needs (e.g., faster design feeding plant expansions). This would turn research from slow, expensive lab drudgery into a productive, scalable engine.

4. Dual Infrastructure: Application Sandboxes + University Fundamentals

Sandbox centres like SCL Mohali (₹4,500 crore upgrade progressing in 2025–2026; Tata, Cyient, Applied Materials as L1 bidders; 8-inch CMOS augmentation, GaN addition) are vital for closing the "last-mile" prototyping gap—allowing startups and academia to move from design to sovereign fabrication without foreign queues.

Replicate this (say, half-dozen dedicated national facilities for robotics, biomanufacturing, green chemistry, etc) for hardware sovereignty. But fundamentals—long-horizon, blue-sky work—belong in universities, upgraded with HPC, quantum interfaces, and modern labs. This dual setup would avoid silos, maximize efficiency, and ensure research serves capacity, not the other way around.

5. Private Leadership with Public Multipliers

Private universities, I argue, must be enabled to lead Indian R&D, especially because of the political and financial constraints government universities face. The government should incentivize private industrial conglomerates (through tax credits, grants, land) to build large multi-campus universities—as open R&D ecosystems that aid not just themselves, but also startups/MSMEs. 

For government universities, the Central government's National Research Foundation and the RDI Fund can provide patient capital for R&D in those universities, especially to complement government industrial missions/programs, complementing private university R&D. 

This multi-modal approach would avoid the pitfalls of government dominance or private isolation.

Addressing the "Both/And" Objection: Sequencing Matters More Than Ratios

Critics might point to South Korea or Taiwan as proof that R&D and capacity must rise in lockstep—Samsung's semiconductor dominance resting on both fab investments and materials research, TSMC's process leadership requiring simultaneous equipment procurement and yield innovation. 

Fair enough. But context matters: South Korea's heavy R&D push (now 4.8% of GDP) came after decades of state-directed capacity building in steel, shipbuilding, and electronics—the chaebols first mastered production scale in the 1970s-80s before pivoting to innovation leadership in the 1990s-2000s. Taiwan's story is similar: TSMC was founded in 1987 as a pure-play foundry (capacity-first model), with cutting-edge process R&D emerging only after establishing fabrication dominance. The sequencing lesson is clear: you earn the right to frontier R&D by first proving you can build, operate, and scale reliably. 

India in 2026 is not South Korea in the mid-2000s—we're still in our capacity-building phase across sectors from renewables to semiconductors to green hydrogen. Obsessing over just GERD ratios now, before we've locked in manufacturing sovereignty and economies of scale, risks prioritizing the laboratory before the factory. The argument here isn't R&D versus capacity. It is: capacity as immediate priority, R&D as long-horizon plan; with both rising at their respective velocities.

Conclusion: Refocus Before It's Too Late

India cannot afford the luxury of R&D tunnel vision. Obsessing over spending ratios while capacity languishes, risks turning innovation into an elite hobby—great patents, no plants; brilliant simulations, no sovereign output. While R&D should receive its fair share in the upcoming Union Budget, the government must prioritize and enable massive capacity expansion (conglomerates' proven strength), productivize research via university redesign and advanced tech (super/quantum computing as force multipliers), and deploy strategic public infrastructure (application sandboxes, RDI/NRF funding, and partnerships).

Union Budget 2026-27 offers this pivotal opportunity. By embracing this rebalance, India can convert its demographic dividend into genuine, sovereign leadership. Anything less is a distraction we can ill afford.