Budget 2025: Government spends half of all R&D expense in India

As Finance Minister Nirmala Sitharaman prepares to deliver her eighth straight budget speech, there are calls for more allocation for research and development (R&D). However, as the latest economic survey pointed out, the share of the country’s private sector in the amount spent on R&D is abysmally low compared to a whole host major nations, from Australia to China, and Mexico to Russia. Source: Economic Survey 2025

“In countries like China, Japan, South Korea, and the USA, this share exceeds 70%. In the US, the private sector leads, with companies like Google and Amazon accounting for about 70% of R&D spending,” the survey said while pushing for more contribution to R&D from the private sector.

There’s a similar lack of thrust on R&D from the state governments too. The gross expenditure on research & development has more than doubled to ₹1.27 lakh crore (nearly $15 billion) in the decade ending March 2021. However, this is just 0.64% of the gross domestic product (GDP) compared to a global average of 2.6%.What’s worse? At least ten states, including wealthier and more industrialised ones like Tamil Nadu and Karnataka, spend much less than the national average, according to a recent study by the Reserve Bank of India (RBI).

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