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Large consumer base

With a USD1.7 trillion economy and per capita income of over USD1,200, India presents a
unique opportunity for companies to tap the huge consumer base

Demand for cheap and durable products that could meet the local requirements drives the
need for innovation

Third largest technical manpower in the world


162 universities awarding 4,000 doctorates and 35,000 postgraduate degrees

Huge talent pool

Policy framework

Rising investments

Global share in scientific publications rising at a CAGR of ~12 per cent

Policies aimed at projecting India as a Science & Technology powerhouse, and promoting
both public and private sector involvement in the Research & Development practice

With more and more multinational companies setting up their R&D centres in India, the
sector has seen an uptrend in investments in recent years

Source: IBEF, Aranca Research

Growing demand

Huge talent base

Expanding middle class and


increasing affordability are
expected to remain key demand
drivers for technologically
advanced products

Third largest technical manpower


in the world

With government and private


sector funding, academia is
adapting to the changing
requirements of the industry

Demand for products that meet


the local needs is set to accelerate

Advantage
India
Rising investments

Cheap labour costs and easy


access to talent have been
attracting investments from foreign
companies in recent years

Multinational companies are


setting up their R&D centres in
India

Policy support

Government is providing continued


policy support in the form of
Science, Technology & Innovation
Policy 2013 and the Twelfth FiveYear Plan (201217)

Scientists and research


professionals are supported
through various grants

Source: Department of Science & Technology, FICCI, Aranca Research

2013
2003

1983

1958

Scientific
Policy
Resolution to
promote
science, and
scientific
research in all
its aspects in
India

Technology
Policy
Resolution to
address the
need to attain
technological
competence
and selfreliance

Science &
Technology
Policy to bring
science and
technology
together and
emphasise the
need for
investment into
research and
development to
address national
problems

Science,
Technology &
Innovation
Policy aims to
develop
synergies
between
science,
technology and
innovation

Source: Department of Science & Technology, Government of India

R&D bodies

Government
funding &
development
agencies

R&D in NGO
groups

Indian STI
system
R&D by
multinational
companies

Industrial R&D
systems

Academic sector

Socio economic
ministries

Source: Changing Indian STI Landscape Presentation, Department of Science & Technology
Note: STI refers to Science Technology & Innovation

India is among the top-ranking countries in the field of basic research


It has the third largest scientific and technical manpower in the world
634 universities award over 16,000 doctorates degrees annually
the Council of Scientific and Industrial Research runs 39 research laboratories
India ranks 10th in terms of the number of resident patents filed

PhD research outputs in science


10,000

8,900

M.Phil and doctorate degrees awarded in


science & technology discipline
18,000
16,010

16,000
14,000
5,400

10,000

12,943

2009-10

2010-11

11,659

12,000

5,000

12,754

8,412

8,000
6,000
4,000
2,000

0
2000

2010

0
2006-07

2007-08

2008-09

Source: IBEF, Department of Science & Technology, National Science and Technology Management
Information System, UGC, World Intellectual Property Organisation, Aranca Research

National Expenditure on R&D increased threefold from


USD5.4 billion during 200405 to USD15.1 billion during
201112
During the 12th Five-Year Plan, Indias R&D/GDP ratio
increased to 0.88 per cent

National R&D expenditure and its


percentage with GDP
USD billion
20
15

Indias share in World in Gross Expenditure on Research &


Development (GERD) has increased from 1.9 per cent in
200405 to 2.4 per cent in 200910

10

6.8

7.6
0.80%

5.4

0.90%

0.85%

11.2

10.3

9.8

Per Capita R&D has gone up from USD4.8 during 200406


to USD9.5 in 2009

15.1

13.6

0.75%
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11* 2011-12*

National R&D Expenditure (LHS)

R&D Expenditure (%of GDP) (RHS)

National R&D expenditure by sector


USD billion
10

8.1

4
2

4.3

4.0

3.4

3.2

1.3
0.2

0.5

0.3

0.6

0.3

0.7

0.4

0.8

0.4

0.8

4.6

4.0

3.2

3.1

2.3

1.9
0.4

6.7

6.0

5.4

8.9

0.5

1.0

0.6

1.1

0.6

2004-05

2005-06

2006-07

Central Government

2007-08
State Government

2008-09
Private Sector

2009-10

2010-11*

2011-12*

Higher Education Sector

Source: Department of Science & Technology, NSTIMS, Aranca Research


Note: *Estimated Data

Total scientific publications in India

India ranks ninth globally in terms of the number of scientific


publications
50,000

During 2008-2010, India registered an annual


growth rate of scientific publications at ~12 per cent
as against the global average of ~ 4 per cent
Indias share in global research publication
increased from 2.2 per cent in 2000 to 3.5 per cent
in 2010

36,261

40,000
30,000
20,000

18,911

10,000
0
2002

2008

Source: Working Group Report 12th Five Year Plan,


Department of Science and Technology, IBEF

Indias scientific publication record, 200110


Number of publications
2001-05

Number of publications
2006-10

Global share (%)

Chemistry

25,719

38,920

6.5%

Physics

13,490

20,525

4.6%

Clinical medicine

10,046

19,273

1.9%

Engineering

9,605

18,596

4.2%

Materials science

7,987

14,190

6.4%

Plant & animal science

8,748

11,591

3.9%

Biology

5,403

9,722

3.8%

Agricultural science

4,514

7,270

6.2%

Pharmacology

2,518

5,755

6.1%

Geoscience

3,566

5,508

3.2%

Subject

Source: Working Group Report 12th Five Year Plan,


Department of Science and Technology, IBEF

Patent filings have gone up from 28,940 during 200607 to


43,674 during 201213, representing an increase of ~51 per
cent
Out of the total number of 43,674 patent applications, the
number of applications filed by Indian applicants was 9,911,
indicating around 11 per cent Y-o-Y growth
Total number of patents granted has dropped marginally in
recent years, primarily due to an increase in the disposal of
applications for which the request of examination was
received

Top 5 Indian applicants for patents from institutes


Applications
filed (2012-13)

Name of institute/university

Patenting trends in India


No of Patents
50,000
40,000
30,000

39,400

36,812
28,940

35,218

43,197 43,674

34,287

20,000
10,000

0
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Patents Filed

Patents Granted

Top 5 Indian applicants for patents from R&D organisations


Name of R&D organisations

Applications
filed (2012-13)

Indian Institute of Technology

205

Council of Scientific & Industrial Research

202

Amity University

140

Defence Research & Development


Organisation

73

Indian Institute of Science

31

Indian Council of Agricultural Research

68

Tamil Nadu Agriculture University

16

Hetero Research Foundation

62

National Institute of Pharmaceutical Education &


Research

15

Department of Biotechnology, Government of


India

28

Source: Office of Controller General of Patents, Design, Trade Marks and Geographical Indication, Aranca Research

Industrial sector spending on R&D has increased over the years


Industrial sectors share in Gross Expenditure on Research & Development (GERD) improved to 34.2 per cent in
200910 from 25.3 per cent in 200203
Industrial sector R&D units spent 0.61 per cent of their sales turnover on R&D activities in 200910, which is expected to
rise in future

Percentage share of government and industrial sector in GERD


100%
23%

24%

25%

28%

30%

33%

35%

38%

36%

34%

35%

36%

75%

72%

70%

67%

65%

63%

65%

66%

65%

64%

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11*

2011-12*

75%

50%
77%

76%

25%

0%
2000-01

2001-02

Government

Business Sector
Source: Department of Science & Technology, Aranca Research
Note: Numbers for 2010-11 and 2011-12 are forecasted numbers

Competitive Rivalry

Competitive rivalry is low; however, there is indirect competition between


contract scientific research centres due to development needs of their
clients that operate in the same market and are in direct competition with
each other
Many foreign companies tend to set up their in-house research centres
that may operate in competition with contract R&D centres

Threat of New Entrants

The threat of new entrants is low


because of the capital intensive
nature of the business

Bargaining Power of Suppliers

Contract or academic research


centres do not have any direct
influence on the market, and
have little bargaining power for
the
commercialisation
of
technologies developed

Threat of New
Entrants
(Low)

Substitute Products
With easy access to talent base
and low operational costs,
companies may look to set up inhouse scientific research centres

Bargaining
Power of
Customers
(Low)

Competitive
Rivalry
(Low)

Bargaining Power of Customers

There is no direct influence of


consumers
on
scientific
research; however, technologies
are
developed
keeping
consumer needs in mind

Bargaining
Power of
Suppliers
(Medium)

Substitute
Products
(Medium)

Policy
support
strengthening capacity
for basic research

Investments from
Multinational
Resulting in

strengthening
institutional capacity
for research

Companies (MNCs) to
cater to the needs of
the local market and
their global client base

strengthening human
capacity for research

In recent years, the Indian Government has implemented


several fellowship schemes to nurture human capacity for
advanced research in the country

Number of researchers in India


250,000

In 2008, launched Innovation in Science Pursuit for


Inspired Research (INSPIRE) scheme, through
which the Government awarded 2,150 research
fellowships for doctoral research and 270 faculty
awards for post doctoral researchers

200,000

Following the Governments initiatives, the number of


researchers per million people has gone up from 140
during 200406 to 164 in 2009

100,000
50,000

2006

2009

In millions
1,127

1.5
1.1

1,000
800

154,840
150,000

Out-turn of scientific & technical


personnel from universities in India

INSPIRE fellowship growth profile


1,200

192,819

1.0

775

0.7

663

600

0.5

400
200

0.0

2006

2010-11

2011-12

2010

2012-13
Source: NSTMIS, Department of Science & Technology

With a USD1.7 trillion economy and per capita income of


over USD1,200, India presents a unique opportunity for
companies to tap the huge consumer base

Per capita income (in USD)


1,500
1,243

An expanding middle class and rise in purchasing power of


rural residents have boosted demand for innovation and
development of cheap and durable products that could meet
the local requirements

1,125
896

1,000

1,026

767
676

500

0
2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

Source: World Bank, FICCI, Government of India

Lower development cost, rising technology intensity and


growing local demand for top of the line unique technology
products have attracted R&D investments from foreign
companies in India
India is a base for 718 MNCs with over 870 research
centres
More than one-third of the top 1,000 global R&D spenders
have centres in India

Contribution of multinational companies in the


R&D sector*

USD million
750

478.3

500

250
47.4
0

About 28 per cent companies with headquarters in Japan,


the EU and APAC have a R&D centres in India

2002-03

2009-10

Total number of MNC R&D centres in India


1,000
699

750

780

871

517
500
297
250

191

0
Before '00 2001-02

2003-04

2005-06

2007-08

2009-11

Source: FICCI, Department of Science & Technology, Zinnov


Note: *Figures Converted to USD million at 2013-14 Exchange rate

Science Technology and


Innovation Policy 2013
The key elements of the STI policy are:
Developing synergies between science, technology and innovation
Providing a fresh perspective on innovation in an Indian context
Charting a high-technology path for creating a science, research and innovation system in India
Promoting proliferation of scientific temper among all sections of the society
Enhancing skill for applications of science among the young from all social strata
Making careers in science, research and innovation attractive to the brightest students
Establishing world class R&D infrastructure for gaining global leadership in some select frontier areas of science
Positioning India among the top five global scientific powers by 2020
Migrating R&D outputs into commercial applications by replicating hitherto successful models as well as
establishing new structures
Facilitating S&T-based high-risk innovations through new mechanisms
Triggering changes in the mindset and value systems to recognise, respect and reward performances that
create wealth from S&T derived knowledge

Source: News articles, Science & Technology Policy 2013

The Government of India has taken various steps to generate interest and promote investments in the Science &
Technology Sector

12th Five-Year Plan


(201217)

National knowledge
network

National innovation
council

Improving academia

Key focal points include:


Creation of major national facilities under partnerships
Programmes for centre-state technology partnership
Building educators for science teaching
Investments into mega science for creation of R&D infrastructure within India and abroad
under partnerships

A state-of-the-art multi-gigabit (multiples of 10 Gbps) pan-India network is planned to link


some 5,000 nodes in India
It will be the sole vehicle for international connectivity in future

20102020 has been declared the Decade of Innovation to stimulate innovations and
produce solutions for societal needs such as healthcare, energy, infrastructure, water and
transportation

Innovation universities would be set up as public private partnerships to develop new


hubs of education, research and innovation
Source: News articles, Government websites, swissnex India

Total research citations impact factor has increased from 0.68 in 20062010 compared to 0.53 for 19962000
In 2010, 21.5 per cent of research papers from India had international collaborators

Top Indian Institutions by citation impact*


Indian Institute of Science
Indian Institute of Technology, Kharagpur
Indian Institute of Technology, Kanpur
Tata Institute of Fundamental Research
Bhabha Atomic Research Centre
Indian Institute Chemical Technology
Indian Institute of Technology, Delhi
Indian Institute of Technology, Bombay
National Chemical Laboratory
Indian Institute of Technology, Madras
Source: swissnex India, NSTMIS
Note: *Centre of Excellence are identified using a threshold of minimum of 200 research papers in the top decile of global research (2012)

Government funding

Academic research

Human capital

Korea
China

East Asia

Thailand
Indonesia
Vietnam

Czech Republic
Romania
Poland

Central & Eastern


Europe

Slovakia
Russia
Hungary
Turkey
Brazil

Latin America
Less competitive than India

Mexico
In competition with India
Source: World Bank data, NSTMIS, Department of Science & Technology, Aranca Research

Private sector involvement has increased over the past few


years, but remains low compared to that in other developed
and emerging markets

Private sector investments in research &


development

USD billion
6.0

R&D investment registered nearly twofold increase during


the 2005-06 to 2009-10 period and is expected to grow
eightfold in the next 5 years

4.8
3.6
4.0

3.9
3.3

2.9
2.4
2.0

1.9

0.0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11E 2011-12E

Source: Press Release, Department of Science & Technology, NSTMIS


Note: E denotes Estimated

Top 10 companies spending on R&D in India - 2010

R&D spend (USD million)

R&D spend (% revenue)

Tata Motors

397.8

1.5%

Prithvi Information

246.3

60.5%

Polaris Software

228.0

67.6%

BHEL

176.3

2.5%

Mahindra & Mahindra

157.2

2.5%

Lupin

112.7

9.3%

Infosys

112.0

1.9%

Reliance Industries

110.0

0.2%

Core Projects

96.2

53.4%

Bharat Electronics

67.2

5.9%

Company

Source: Press Release, Department of Science & Technology, NSTMIS

Plans to invest ~USD83 million in an R&D unit to extend support for Honda's localisation strategy for its
running models as well as provide designing support for some upcoming India-specific models in the near
term
Investing ~USD75 million in an R&D unit in Rajasthan to develop models for both domestic and
international markets
Plans to set up a manufacturing facility for its high-end artistry range of cosmetics and set up an R&D
centre (its second outside the US)
Plans to double headcount at its Bengaluru R&D facility to make the centre a hub for global engineering
development and cater to the technology needs of the Asia-Pacific region
Plans to start R&D in rolling stocks for its railway systems to support the growing urban transport needs in
the region
Opened an R&D centre in India with focus on organic synthesis, advanced process and formulation,
molecular modeling and agro chemicals
Plans to establish a global R&D centre in India to develop products and solutions for India as well as the
international market

Source: News Articles


Note: Figures converted to USD using INR-USD exchange rate for 2013-14

In Industrial R&D investments, Drugs and Pharmaceuticals


occupied the first place with a share of 33 per cent, followed
by Transportation (17 per cent), Information Technology (16
per cent), and Agriculture & Agricultural Machinery (7 per
cent) during 200910
Investments in Drugs and Pharmaceuticals increased ~74
per cent since 200506 and are expected to grow in future

R&D investments in top 10 sectors (2010)


USD million
Drugs & Pharmaceuticals

958.7

Transportation

483.1

Information Technology

469.6

Agriculture & Agricultural Machinery

186.9

Chemicals (other than fertilizers)

171.3

Biotechnology

131.4

Electricals & Electronics Equipments

111.5

Fuels

45.7

Telecommunications

41.7

Industrial Machinery

34.6

Source: NSTMIS, Press Releases


Note: Figures converted to USD using INR~USD exchange rate for 2009-10

ICT and wireless


technology

Pharmaceuticals

Manufacturing
technologies

Material energy

Bio-energy

Water technologies

Cloud computing presents endless opportunities in wireless technologies


Low power devices and devices with higher duty cycles are needed for the future

India needs inexpensive diagnostic kits with antigens and markers that are specific to
Indian conditions

Automation and environmental sustainability are the key focus areas for manufacturing
companies

Multi-disciplinary research to combine emerging concepts in nanotechnology with


fundamental metallurgical chemistry is the way forward

Bio-energy is emerging as a promising alternative to meet rural energy needs in India

R&D efforts should concentrate on developing technologies for treatment, recycling,


recovery, reuse and efficient use of water
Source: FICCI

Information & Communication Technology (ICT) spending in


India is expected to increase at a CAGR of 5.3 per cent to
USD95.9 billion in 2016

Investment in ICT in India


USD billion

95.9

100

Telecommunication sector, which accounts for 67 per cent


of the Indian ICT market, is expected to drive growth

86.2
78.9

80

Key drivers that would accelerate growth of the


sector include increased access to services due to
launch of newer telecom technologies, better
devices, changing consumer behaviour and
emergence of cloud technologies
With usage of wireless technologies expected to grow in
future, low power devices with higher duty cycles need to be
explored
Network infrastructure also needs to be improved as
elimination of congestion in existing network infrastructure is
the need of the hour

71.5
66.4
60

40
2012

2013E

2014E

2015E

2016E

Source: News Releases, FICCI


Notes: ICT denotes Information & Communication Technology;
E denotes Estimated

Indian pharmaceutical market

Indian pharmaceutical market is expected to expand at a


CAGR of ~14.5 per cent until 2020
60

Key drivers that will fuel the sectors growth include


rising income levels, increase in chronic diseases,
better medical infrastructure, wider health insurance
reach and supportive healthcare policies

USD billion
55.0

50
40

30
20

R&D in the pharmaceutical industry, a high risk and capital


intensive area, is key to growth and is at a nascent stage in
India

0
2009

Overall R&D expense by Indian companies has been


around 5 per cent of sales, and is expected to increase in
coming years

2020E

R&D expenditure as % of sales for


domestic companies

Companies need to develop drugs for diseases local to


India and other tropical countries
Competent facilities and workforce needs to be developed
to lead new drug development and pharmaceutical R&D

12.6

10

6%

5.0%

5.4%

5.0%

4.8%

4.9%

2007-08

2008-09

4.5%

4%

2%

0%
2004-05

2005-06

2006-07

2009-10

Source: FICCI, McKinsey Report on Indian Pharma


Note: E denotes Estimated

Focus on critical
technology
development

Human capital
development

Investment in basic
research

Attracting investment
from private sector

The Governments focus is on prioritising critical R&D areas such as agriculture,


telecommunications, energy, water management, health & drug discovery, materials,
environment and climate variability and change

The Government is establishing funds for innovation and promoting technologies in


strategic sectors with civilian application potential

Special incentive mechanisms are being developed to stimulate research in universities


and develop young leaders in science and engineering

The policy framework is being devised to enable school science education reforms, by
improving teaching methods and science curricula

Government is promoting investments in basic research to improve research quality to


meet global standards and to address national challenges

Focus is on investing in research & development of technologies that address the needs
of rural India

Through Science, Technology & Innovation Policy, the Government is promoting the
establishment of large R&D facilities in PPP mode with provisions for benefits sharing

Promoting multi-stakeholder participation in the Indian R&D system

Source: Science, Technology & Innovation Policy 2013

R&D laboratories
collaboration

The Government is focussed on setting up inter university research centres to enable


researchers from different disciplines and universities to come together and address the
challenges of Science & Technology and its applications

Through Science, Technology and Innovation policy, the Government promotes


mechanisms for nurturing technology business incubators and science led
entrepreneurship

Also promoting incentives for commercialisation of innovations with focus on green


manufacturing

Promoting innovation

Source: Science, Technology & Innovation Policy 2013

Production
of first
indigenously
designed
LCV

A Combination of

Launched
worlds
cheapest
car, Tata
Nano

Launched
Indias first
indigenously
designed car

Technology and
Imagination,
Tata Motors has been

The Way
Forward:
Conducting R&D
for low carbon
vehicle
technologies,
including pure
electric vehicles,
hybrid drive trains
and advanced
fuels

driving the innovation


tend in the
Indian Automobile
Industry

Establishment
of
Engineering
Research
Centre

1966

1998

2005

2008

2014

Source: Tata Motors Website

Department of Science & Technology


Technology Bhavan, New Mehrauli Road
New Delhi 110016, India
Phone: 91 11 26567373, 26962819
Fax: 91 11 26864570, 26862418
E-mail: dstinfo@nic.in

Indian National Science Academy


Bahadur Shah Zafar Marg,
New Delhi 110002, India
Phone: 91 11 23221931, 23221950
Fax: 91 11 23235648, 23231095
E-mail: esoffice@insa.nic.in

Indian National Academy of Engineering


117 Nalanda House, IIT Campus,
Hauz Khas, New Delhi 110 016, India
Phone: 91 11 26582475, 26582635
Fax: 91 11 26856635
E-mail: inae@nda.vsnl.net.in

National Academy of Sciences


5, Lajpatrai Road,New Katra
Allahabad - 211 002, India
Phone: 91 532 2640224
Fax: 91 532 2641183

Indian Science Congress Association


14, Dr Biresh Guha Street
Kolkata 700017, India
Phone: 91 33 22474530
Fax: 91 33 2402551
E-mail: iscacal@vsnl.net

Indian Academy of Sciences


C. V. Raman Avenue, Post Box No 8005
Sadashivanagar, Bangalore 560 080, India
Phone: 91 80 23612546, 23614592, 23612943
Fax: 91 80 23616094
E-mail: office@ias.ernet.in

CAGR: Compound Annual Growth Rate


FDI: Foreign Direct Investment
FY: Indian Financial Year (April to March)
So FY12 implies April 2011 to March 2012
GOI: Government of India

MNC: Multinational Company


GERD: Gross Expenditure on Research & Development
STI: Science Technology & Innovation
Y-o-Y: Year on Year
INR: Indian Rupee
USD: US Dollar
LCV: Light Commercial Vehicle
PPP: Public Private Partnership
Wherever applicable, numbers have been rounded off to the nearest whole number

Exchange rates (Fiscal Year)

Exchange rates (Calendar Year)

Year

INR equivalent of one USD

Year

INR equivalent of one USD

2004-05

44.95

2005

45.55

2005-06

44.28

2006

44.34

2006-07

45.28

2007

39.45

2007-08

40.24

2008

49.21

2008-09

45.91

2009

46.76

2009-10

47.41

2010

45.32

2010-11

45.57

2011

45.64

2011-12

47.94

2012

54.69

2012-13

54.31

2013

58.44

2013-14

60.28

Q12014

61.58

Average for the year

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