India's R&D Push: ANRF Aims to Double Private Sector Investment, But Firms Must Step Up
For three months in early 2024, the most consequential number in the Indian economy was the distance between an oil tanker and the Strait of Hormuz. When the strait effectively closed in March, India—which imports the vast majority of its oil—found its supply line squeezed. Oil could be rerouted, but at a higher cost. The episode served as a stark reminder: while energy can be diverted, dependence on critical technologies offers no such flexibility.
The deeper lesson is not simply that supply chains are fragile, but that they have become instruments of geopolitical strategy. Export licenses become levers, chokepoints become weapons, and technologies freely traded one year are denied the next. China spends 2.43% of its GDP on research and development (R&D), with three-quarters financed by its own companies, driven by a single ambition: to end dependence on foreign technologies and increase the world's reliance on its own.
India has taken a hard look at its own position. As of 2023, it spends just 0.64% of GDP on R&D—less than half the global average. Only about two-fifths of that is financed by private enterprise, compared to three-quarters or more in China, South Korea, and the United States. For the first time, however, the government has put substantial resources behind changing this.
The Anusandhan National Research Foundation (ANRF), notified in 2024, is a statutory body chaired by the Prime Minister. It brings together academia, industry, startups, philanthropy, and the Indian diaspora. Its Research, Development and Innovation Fund commits ₹1 lakh crore over six years for the private sector alone, providing patient capital that can outlast the quarterly profit cycle. An additional ₹50,000 crore over five years is allocated through the ANRF Core for basic science. The design is catalytic: for every rupee companies invest in pre-commercial research in partnership with the foundation, they are expected to invest five to ten rupees of their own to commercialise and scale up the results. This all-of-government and all-of-society collaboration aims to boost productivity and impact for all participants. It goes beyond funding, aligning government procurement and regulation with the innovation landscape.
Firms can engage in multiple ways—as limited partners in a fund managed by a second-level fund manager, as eligible technology entities, or through joint ventures with startups and global capability centres already in India. On the science side, they can partner on national missions, set pre-competitive challenges for the foundation to co-fund, route corporate social responsibility funds through the ANRF Innovation Fund, or share the cost of a single project before committing more. The goal is to lower the barrier for any willing firm to participate.
But the foundation is a catalyst, not a substitute for industry's own efforts. Three critical actions remain the responsibility of the private sector. First, companies must mobilise their own capital to complement the public catalyst. Second, they must strategically choose the technologies where dependence is most dangerous and capability most valuable, rather than pursuing only incremental gains in a captive market. Third—and most important—firms must build internal structures for long-term research: dedicated R&D units, corporate venture arms, and planning insulated from short-term quarterly pressures.
India has the talent, the funding, and now the institutional framework for a research leap. But the leap will require all stakeholders—government, industry, academia, and society—to build it together.
