Stories
India Can Become Global Tech Powerhouse But R&D And Red Tape Remain Hurdles
- •India spends about 0.65 percent of its GDP on research and development compared with 2.6 percent in China and 3.5 percent in the US, with experts urging an increase to at least 1 or 2 percent.
- •The country's startup ecosystem is producing a new generation of experienced founders who understand how to build products and scale businesses.
- •Regulatory hurdles such as lengthy processes to shut down businesses and obtain factory approvals continue to make it difficult to do business in India.
- •India's technology IPO market has expanded rapidly with venture-funded companies going public rising from just two in 2020 to nearly 40 today.
- •Experts highlight India's AI opportunity with a tenfold increase in computing capacity, massive infrastructure investments, and over 1,500 AI startups.
Key Questions Answered
India currently allocates approximately 0.65% of its GDP toward research and development. This falls significantly behind leading global economies, as China spends around 2.6% and the United States invests about 3.5% of its GDP into R&D.
Changes in Securities and Exchange Board of India rules allowing companies to list publicly even before achieving profitability have helped build one of the world's most vibrant IPO markets. The number of venture-funded companies valued over $1 billion going public has surged from only two in 2020 to nearly 40.
India marks a decisive turning point for AI in 2026 with a tenfold increase in computing capacity, over $300 billion in announced infrastructure commitments, and more than 1,500 AI startups. Rather than building the world's largest models, domestic companies focus on applications solving specific business problems efficiently at a lower cost.
