FDI in R&D in India-Reji K. Joseph, Biswajit Dhar & Akoijam Amitkumar Singh

How much foreign direct investment is taking place in R&D in India? 
MNCs using Indian talent for research but innovation comes out of development in other countries!!!
Is DSIR recognition relevant?

Interesting aspects highlighed in this paper.
1.RDFDI inflows into India during the period of analysis (2004-16)  was Rs. 54862.6 Mn. This constitutes 0.4 per cent of total FDI inflows into India.
2. RDFDI was concentrated in four sectors—ICT, natural sciences and engineering (NSE), pharmaceuticals and clinical research, which accounted for more than 80 per cent of total RDFDI.
3. Only one‐fourth of RDFDI has come to DSIR recognised firms. None of the firms in the ICT sector, which received the maximum RDFDI inflows, has DSIR recognised in‐house R&D units.
4.The share of FDI companies in corporate sector R&D is only 3 per cent.
5. Data collected from USPTO on number of patents granted in which India is an inventor country and assignee country shows that there is a growing trend of companies based in foreign countries taking patent on the outputs of R&D conducted in India. Since 2002, there has been a steady decline in the share of India based inventions receiving India as the assignee country status. Of late, only 15 per cent of the patents granted by USPTO in which India is mentioned as an inventor country, having India as the assignee country; this share was 58 per cent in 2002. 

Why India needs a reindustrialisation drive

Why doesn’t India have an industrial policy, given that even the neo-liberal bastions, its biggest critics, are seeing in it a viable response to the relentless Chinese challenge?

Instead, we are going in the reverse direction—with a 14% decline in our high-tech industry and the percentage of GDP devoted to research and development (R&D) decreasing from 0.85% in 2011 to 0.63% in 2015, an anomaly of serious dimensions in today’s technology-driven world.

India needs a reindustrialisation drive to create a level-playing field for the country’s private manufacturers and increase their R&D intensification. Consider this: The much-touted Indian services sector, which forms almost 61% of the economy, generates around $183 billion of exports, while the beleaguered manufacturing sector, the serial sacrificial lamb in trade negotiations (to save H1B jobs) with only 16%, generates $210 billion! It is clear which one is the most productive sector of our economy, and which ones creates more multipliers, jobs and domestic value-addition.

Read more on this article by By Smita Purushottam