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Since 2015, the Indian authorities’s sustained encouragement of the analysis and growth (R&D) ecosystem, together with new science-backed insurance policies, has contributed to a significant rise in India’s overall ranking in the Global Innovation Index (GII), a metric of R&D output maintained by the World Intellectual Property Organization. From being ranked 81st globally in 2015, India rose to thirty eighth in 2025. India additionally holds the top position amongst lower-middle-income international locations and inside the Central and Southern Asian area. This bettering GII efficiency has bolstered confidence inside the authorities.
However, for India to enter the highest 10 of the GII, its science and expertise (S&T) policymakers should make basic modifications to the nation’s method to innovation. India should enhance its efficiency throughout the person indicators underpinning the general GII rating, strengthen enterprise sophistication inside its innovation ecosystem, be sure that home and indigenous mental property candidates fare higher, and scale back its dependence on the output of Global Capability Centres.
Beyond the Overall Ranking
The Indian authorities goals to ascend among the many main nations in the GII. To this finish, it’s investing in enterprise stakes in strategic expertise sectors similar to semiconductors, synthetic intelligence, and house. The roughly US$10 billion Anusandhan National Research Foundation Fund is anticipated to propel R&D financing throughout numerous educational and scientific disciplines. These governmental initiatives ought to yield these three outcomes:
First, the amount of patents filed shouldn’t be thought to be the only real goal, regardless of its affect on India’s total Global Innovation Index (GII) rating. An improve in the variety of patents granted in India, in addition to in high-impact patents, ought to grow to be the subsequent shared goal for each the Indian authorities and the home non-public sector. Merely specializing in the amount of patent filings, with out guaranteeing that patents are granted and obtain excessive peer citations, is a short-sighted method that will finally yield no strategic dividends for both India’s innovation ecosystem or the nationwide financial system.
While execution issues, the technological interventions wanted to deal with them should emerge from India’s personal R&D ecosystem—overseas innovation is not going to clear up India’s challenges and safety threats.
Second, India’s R&D output ought to be extra straight oriented in direction of fixing India-specific issues, whether or not security-related or in any other case. Many of the nation’s most urgent challenges are extremely particular to India—from growing drought-resistant crops to stopping the motion of pests throughout the border from Pakistan to managing poor air high quality that commonly impacts megacities similar to Delhi and Mumbai below sure climate situations. These challenges undermine folks’s well-being and replicate poorly on governance. While execution issues, the technological interventions wanted to deal with them should emerge from India’s personal R&D ecosystem—overseas innovation is not going to clear up India’s challenges and safety threats.
Third, India ought to purpose to be sure that high-value R&D output and mental property stay primarily based inside the nation, in order that India itself derives the ensuing tangible and intangible social and financial advantages. There is little strategic benefit in abroad corporations submitting mental property functions by their Indian subsidiaries and R&D outposts, since such innovation presents India solely superficial advantages, whereas its financial returns are captured elsewhere.
The Business Sophistication Gap
While India’s total GII rating is extensively cited, the six different classes in the GII nation rankings recommend appreciable scope for enchancment. These are: Knowledge and Technology, Creative Outputs, Human Capital and Research, Institutions, Infrastructure, and Business Sophistication. India ranks under its total place of thirty eighth in 5 of those six classes. A traditional coverage response would name for interventions throughout all these areas, and rightly so. However, the important thing to bettering efficiency throughout these classes lies in strengthening the ‘Business Sophistication’ of the nation’s R&D ecosystem.
Table 1: India’s Ranking in 7 Categories of GII 2025
| Category | Rank in 7 Categories of GII 2025 |
| Knowledge and Technology Output | twenty second |
| Overall Global Innovation Index | thirty eighth |
| Creative Outputs | forty second |
| Human Capital and Research | 54th |
| Institutions | 58th |
| Infrastructure | 61st |
| Business Sophistication | sixty fourth |
Source: WIPO
The metrics inside the GII’s Business Sophistication class are subdivided into three distinct sub-categories: Knowledge Workers, which measures the share of employment engaged in knowledge-intensive actions; Innovation Linkages, which assesses collaboration between the private and non-private analysis sectors; and Knowledge Absorption, which incorporates indicators similar to overseas direct funding (FDI) inflows, high-technology imports, data and communication expertise (ICT) companies imports, and funds for mental property, expressed as proportions of complete commerce. These are additionally the areas in which India’s world rankings stay comparatively low, falling greater than 80 locations behind the world’s main performers.
For occasion, India ranks 101st in the employment of ladies with superior levels. Although the variety of diploma holders has elevated, this has not translated into better employment in high-technology sectors due to restricted availability of such alternatives. This is clear in India’s 95th ranking for knowledge-intensive employment. Similarly, India ranks 91st in university-industry collaboration in analysis and growth and 81st in R&D cluster growth. Together, these indicators spotlight the hole between the abilities and information imparted by academia and the evolving calls for of {industry}. India additionally ranks 107th globally in FDI web inflows to information absorption sectors as a share of gross home product (GDP). Addressing these comparatively weak indicators—or, extra broadly, realising the total advantages of progress throughout the GII pillars—would require strengthening Business Sophistication.
Do Global Capability Centres Drive India’s GII?
The GII largely measures the variety of analysis patents, design patents, and logos filed from a rustic, slightly than the variety of patents granted or their affect. These filings embrace functions submitted by each home and overseas establishments working in India. This is the place Global Capability Centres (GCCs) assume explicit significance. GCCs are offshore centres established by overseas corporations to undertake features similar to expertise help, finance, and analysis and growth.
GCCs positioned in India have been significant contributors to patent filings, primarily by patent functions filed by their father or mother corporations. In doing so, they considerably improve the general quantity of patent filings originating from India, which can, in flip, contribute to the nation’s increased GII rating.
The optimum situation is one in which India’s academia-industry interface thrives, its R&D ecosystem undertakes extra superior analysis and scientific megaprojects on the forefront of innovation, and the nation progresses in direction of stronger qualitative and quantitative innovation outcomes.
By the top of 2026, GCCs are projected to generate income of almost US$100 billion, straight make use of shut to 2 million highly skilled professionals, and function greater than 2,000 centres throughout India. The central and state governments place appreciable worth on the tax revenues generated by GCCs, the direct and oblique employment they create, and the constructive financial notion they foster. However, beneath this beneficial narrative, the disproportionate affect of GCCs on India’s GII rating warrants nearer coverage consideration. While GCC-led R&D actions align with present and rising world techno-economic tendencies, they aren’t essentially geared in direction of India’s personal developmental and technological priorities.
The optimum situation is one in which India’s academia-industry interface thrives, its R&D ecosystem undertakes extra superior analysis and scientific megaprojects on the forefront of innovation, and the nation progresses in direction of stronger qualitative and quantitative innovation outcomes.
Innovation Ranking is a Journey, not a Destination
In 2025, the Indian subsidiaries of globally-renowned South Korean companies, LG Electronics and Hyundai Motors, attracted distinctive investor curiosity upon their listings on Indian inventory exchanges, surpassing the valuation of their father or mother corporations in South Korea. Specifically, in October 2025, the market capitalisation of LG Electronics India reached US$12.83 billion, exceeding the US$9.68 billion valuation of LG Electronics Inc. Similarly, Hyundai India was valued primarily based on increased profit-to-earnings (P/E) ratios of 26x on the time of its public providing, in contrast to roughly 5x for its father or mother firm, Hyundai Motors. These figures recommend that Indian traders place a excessive worth on the subsidiaries of expertise corporations that generate high-volume gross sales of modern merchandise and are prepared to pay valuation premiums over their father or mother corporations. This is even supposing the underlying innovation originates not in India, however in South Korea.
Although India is making progress alongside the innovation pathway, it’s important to recognise that innovation is a steady journey slightly than a definitive endpoint.
In April 2026, the South Korean authorities launched two measures to stop the depreciation of the inventory worth of father or mother corporations, or chaebols, curb capital outflows to Indian subsidiaries, and mitigate mind drain and financial drain. Concentrating capital in the house nation is essential for reinforcing R&D funding and attracting extremely proficient professionals by aggressive remuneration.
Countries similar to Japan, South Korea, Israel, and Germany are creators of GCCs and are due to this fact recognised as innovation leaders. By distinction, international locations that host GCCs—together with India, Poland, Vietnam, the Philippines, and Malaysia—might function hubs of innovation however should not thought to be innovation leaders. The South Korean instance illustrates the in depth efforts undertaken by main innovation economies to safe management in analysis and growth and maintain a powerful patent portfolio, each of which considerably advance their financial and strategic pursuits. Although India is making progress alongside the innovation pathway, it’s important to recognise that innovation is a steady journey slightly than a definitive endpoint. To enter the highest 10 of the GII throughout all six classes, India will want to make investments extra assertively in R&D, construct a extra refined home enterprise ecosystem, and be sure that capital stays inside the nation.
Chaitanya Giri is a Fellow on the Centre for Security, Strategy, and Technology on the Observer Research Foundation.
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