India's research and development ecosystem is in need a major overhaul. Here's why

Narayan Ramachandran
4 min read27 Jul 2026, 04:00 PM IST
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India's R&D system suffers from a critical paradox: an influx of top-down capital paired with a hollowed-out base of human capital.
Summary
To compete at a global level amid rapid technological advances, the country must spread research out and place post-doctoral researchers at the heart of its R&D ecosystem. Policymakers need to press a restart button.

Independent India is on the verge of beginning its 80th year. One aspect of India’s development that needs a full recalibration is its approach to research and development (R&D).

For the last eight decades, India has provided services to the world. This has given India’s skilled manpower a gainful opportunity, directly and indirectly engendered prosperity and also supported its capital account through remittances from abroad.

This has required India to produce competent engineers, doctors, computer scientists, chemists, pharmacists, accountants and other service providers at industrial scale via a ‘factory’-like education system.

Both India and the world are changing rapidly, and this system cannot sustain the next eight decades as it has done in the past. The global order now operates in a framework of ‘impeded globalization,’ where access to certain technologies and critical raw materials is subject to restrictions.

India too is getting older and more prosperous and the simple arbitrage of scale execution at affordable cost is no longer a compelling proposition. The advent of artificial intelligence (AI), with its impact on junior white-collar service jobs, only complicates this situation further.

Also Read | Nasscom president: India simply can’t afford to miss its R&D moment

Recognizing this imperative, the central government has taken several steps to improve R&D funding in India. Under the purview of the department of science and technology, the government has set up the Anusandhan National Research Foundation (ANRF).

The ANRF seeks to “raise the quality and footprint of Indian science and engineering to the highest global levels in an accelerated mode, through calibrated support for research and development.” It subsumes the Science and Engineering Research Board (SERB) set up by an Act of Parliament in 2008.

A new initiative adds a ₹1 trillion special purpose vehicle called the Research Development and Innovation (RDI) Fund for the express purpose of accelerating R&D investment. It has been designed to support private-sector enterprises, startups and industries working in strategic and sunrise sectors.

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The mission statements of the ANRF and RDI represent the right direction of travel for India. But they are unlikely to suffice because they are a remedy for only a small part of the problem.

The ANRF and RDI address to some extent the issue of R&D funding, which has so far been woefully inadequate. It also serves as a catalyst to kick-start startup R&D. Raising Indian science and engineering to the highest global quality level requires us to address additional imperatives.

For the R&D ecosystem to thrive and create new knowledge, the hardware is the infrastructure of science (testing labs, measurement systems, etc) and the software is a continual supply of high quality post-doctoral researchers (postdocs). The glue that puts these elements together is co-location, frictionless access to money, reagents, technology and inputs.

India’s real challenge is three-fold.

One, there is very little co-location since post-docs are created in institutes like IITs and IISc and research mostly takes place in 37 laboratories of the Council of Scientific and Industrial Research (CSIR).

Two, while some startups are engaged in R&D, large corporates in India have not undertaken true innovation.

Three, the flow of money through the system and access to scientific tools is hard-lined with bureaucratic cholesterol.

Also Read | Why India needs to re-imagine its science ecosystem

The Niti Aayog, in a remarkably transparent document titled The Ease of Doing R&D in India, clearly identifies the problem of friction.

In its words: “India’s current R&D ecosystem still faces several challenges, including complex administrative processes, bureaucratic systems, rigid financial procedures and inefficient resource utilization.

Above all, there exists a significant trust deficit between the R&D project granting agency and researchers due to several reasons. The researchers are often not able to utilize their time purely for R&D activities without being worried about the administrative issues.”

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The system suffers from a critical paradox: an influx of top-down capital paired with a hollowed-out base of human capital, trapped in a rigid, bureaucratic institutional architecture.

Post-docs are largely unavailable to this system because the best leave our shores and the rest are paid only a fraction of the typical stipends available overseas. It is nearly impossible to co-locate within the existing bureaucratic structure. It would be better instead to dismantle the CSIR pillar and merge it into the institute/university system.

Dismantling the independent CSIR structure doesn’t mean firing scientists or bulldozing buildings. It means changing the lines of governance to match successful global models like that in Tsinghua University/State Key Lab in China or the University of California System with the Lawrence Berkeley National Lab in the US.

Crores of rupees currently spent on running a parallel CSIR administrative bureaucracy could be redirected to fund competitive, globally benchmarked post-doc salaries. China went through exactly this transition between 1992 and 2005; it forced more than 600 institutes to dissolve their independent structures and merge directly with universities.

The sooner we press the restart button, with empowered post-docs at the heart of Indian R&D, the better it will be.

P.S: “Whenever I go out to bat, it is a fresh start,” said Indian cricketing star Smriti Mandana.

About the Author

Narayan Ramachandran has been a Mint contributor for 16 years and writes a fortnightly column called “A Visible Hand”. He spent over three decades on Wall Street, most of it with Morgan Stanley. Narayan was the country head of Morgan Stanley India, leading all of the Group's businesses. Prior to that, he was the head and lead portfolio manager of Morgan Stanley’s Global Emerging Markets and Global Asset Allocation teams, managing over $25 billion in assets. He began his career at Goldman Sachs.<br><br>Narayan is Chairman of TeamLease Services, as well as Unitus Group, India's largest social enterprise bank. Narayan is also Chairman of Vivriti Next and UC Inclusive Credit, which are pioneering firms working on bringing credit to underserved markets.<br><br>In the 2010s, Narayan finished a full eight-year term as Chairman of RBL Bank, one of India's fastest growing banks. He serves as the Chairman and co-founder of InKlude Labs, a social business enterprise working in the field of education and public health. Through InKlude Labs, Narayan works with deserving enterprises to help them scale. He is currently working on incubating the Center for Wildlife Studies and Asan Cup, a feminine hygiene start-up.<br><br>He served as General Partner and Member of the Global Strategy Advisory Board of L Catterton Asia, a consumer-focused growth equity firm. He is an active private equity investor in financial services, technology, social enterprises and consumer businesses. He is co-founder and Fellow at the Takshashila Institution, a public policy school and think-tank. He teaches an online graduate-level course on contemporary economics.<br><br>Narayan received a BTech in chemical engineering from the Indian Institute of Technology Bombay and an MBA from the University of Michigan. Narayan holds the Chartered Financial Analyst designation.

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