India Is Building the Architecture of a Research Economy. The Question Is Whether It Holds Together. By Venkatesh Bhat
On The National Research Foundation, Institutes Of Eminence, Startup Incubators, And What The Gap Between Ambition And Execution Means For India's Innovation Future.
1. An Ambition That Has Been a Long Time Coming
India has spent decades building institutions that produce technically excellent graduates who then leave to do their best research work elsewhere. The reasons have been debated at length: underfunded universities, fragmented research support, limited industry collaboration, and an academic culture that rewards credentials over commercial application. While the structural gaps were well understood, what was missing was a coordinated attempt to close them.
The Anusandhan National Research Foundation Bill, passed by Parliament in August 2023, is the most significant attempt in a generation to change this. Modelled on the US National Science Foundation, the NRF is designed to serve as an apex body for research funding across India covering not just natural sciences but social sciences, humanities, arts, and interdisciplinary work. Its mandate extends to universities and colleges that have historically been locked out of competitive research funding, with less than 1% of India’s approximately 40,000 higher education institutions currently engaged in research activity of any meaningful kind.
The stated budget is Rs 50,000 crore over five years from 2023 to 2028, of which the government has committed 28% roughly Rs 14,000 crore with the remaining 72% expected to come from private sector participation. That funding architecture is where the ambition and the execution question diverge most sharply.
Source: Anusandhan NRF Bill 2023 | British Council India | Department of Science and Technology, Government of India
2. Where the Money Question Gets Complicated
The NRF’s funding model rests on a premise that scientists and research administrators have been openly skeptical about since the bill was announced: that India’s private sector will voluntarily direct Rs 36,000 crore into a government-governed research body over five years. For context, the entire combined allocation to the Department of Science and Technology, Department of Biotechnology, and Department of Scientific and Industrial Research in 2022-23 was around Rs 16,000 crore — the NRF is asking industry to contribute more than twice that amount into an institution they do not control.
The governance structure compounds this concern. The NRF’s board is presided over by the Prime Minister, with the Ministers of Science, Technology, and Education as vice-presidents – a configuration that led Shekhar Mande, former Director General of the Council of Scientific and Industrial Research, to question openly how the government plans to convince industry to invest in an agency that is not their own. The autonomy that made the predecessor body SERB effective as a funding institution has been structurally diluted in the transition to NRF.
None of this means the NRF is destined to underperform its mandate. But it does mean the path from statutory establishment to functioning apex research body is one that will require sustained political will, genuine private sector engagement, and administrative execution of a kind that India’s research funding bodies have not consistently demonstrated.
Source: Down To Earth | IndiaBioscience | Nature India | PIB Government of India
India Is Building Research Institutions At A Scale The Country Has Not Attempted Before. The Architecture Is Sound. The Test Is In The Execution.
3. Institutes of Eminence Eight Years In, Twelve Institutions Notified
The Institutions of Eminence scheme predates the NRF by several years, having been announced in the 2016 Union Budget with the goal of developing twenty world-class universities capable of reaching the global top 100 within a decade. As of December 2024, eight years after the scheme launched, only twelve of the twenty institutions have been officially notified a pace that prompted the Parliamentary Standing Committee on Education to formally recommend in a March 2025 report that the remaining notifications be expedited.
The funding picture within the scheme is similarly incomplete. The eight public IoEs were each promised Rs 1,000 crore over five years. In practice, the collective disbursement across all eight institutions has amounted to around Rs 3,400 crore well under half the committed amount. IIT Delhi received Rs 555 crore against a Rs 1,000 crore commitment. IIT Bombay received Rs 480 crore. Delhi University, the largest public university in the country, was sanctioned Rs 92 crore less than a tenth of the promised support.
What the scheme has delivered, where the funding has flowed, is genuinely meaningful. IIT Bombay used IoE resources to build research infrastructure, expand into AI, machine learning, and digital health, and strengthen its pre-incubation support for student ventures. IIT Madras has built one of India’s most active startup ecosystems within its campus. The question the scheme raises is whether the ambition of producing globally ranked research universities can be achieved at the funding levels being deployed.
Source: The Quint | Careers360 | UGC IoE Portal | Parliamentary Standing Committee Report, March 2025
4. The Incubator Network — Scale Without Consistent Depth
India now has over 1,100 accelerators and incubators across public, private, and academic ecosystems a number that reflects the country’s genuine commitment to building a startup support infrastructure. The NASSCOM-Zinnov Indian Tech Startup Report 2025 notes that 40-50% of VC-evaluated tech startups have gone through some form of incubation, which suggests the pipeline from idea to early institutional support has been substantially built.
The gap that the same report identifies sits further along the journey. Incubators are effective at early-stage support, 57% prioritise mentorship and 51% support product and R&D development but only around 31% support go-to-market refinement and roughly 40% facilitate structured market access or pilot conversion pathways. Support drops sharply after program graduation, precisely when startups are navigating the Seed to Series A transition that the report describes as the ecosystem’s primary conversion bottleneck.
The pattern is consistent with what leading global incubation programs have demonstrated: early technical support is a solved problem. What determines whether a startup progress is whether the incubator has built the commercial enablement infrastructure, customer access pathways, pilot conversion support, and post-program continuity that most Indian programs are still developing. The number of incubators has scaled significantly. The depth of what they offer is the next frontier.
Source: NASSCOM-Zinnov Indian Tech Startup Report 2025 | Tracxn India Accelerator Data 2026 | nasscom.in
5. What the Gap Between Ambition and Execution Requires
India’s R&D investment as a share of GDP has hovered around 0.64-0.7% for over a decade, significantly below the global average of 1.8% and far behind research economies like South Korea at 4.8% and Israel at 5.4%. The NRF, the IoE scheme, and the broader push toward research infrastructure are all attempts to move this number but the relationship between institutional investment and research output is not linear, and the structural conditions that enable research productivity matter as much as the quantum of funding.
Those structural conditions include administrative autonomy for research institutions, financial disbursement mechanisms that do not slow research cycles, industry engagement frameworks that create genuine incentive for private R&D spending, and incubation models that connect technical capability to commercial viability. Each of these is a governance and organisational design challenge as much as a funding challenge.
The foundations being built, the NRF’s mandate to democratise research funding, the IoE scheme’s push toward global institutional standards, the incubator network’s early-stage depth — represent the most serious attempt India has made to construct a research and innovation economy at scale. The execution gap between what has been legislated and what has been funded, between what incubators offer and what startups need at the critical transition stages, is where the work of the coming decade sits.
For organisations operating in this ecosystem whether as research partners, commercial enterprises building on India’s innovation base, or institutions designing the governance frameworks that will determine whether this ambition compounds or stalls the architecture, is being built in plain sight. The decisions made in the next five years about funding autonomy, private sector engagement, and post-incubation support will determine whether India’s research economy becomes what its institutions were designed to be.
Source: UNESCO Institute for Statistics | World Bank R&D Expenditure Data | NASSCOM-Zinnov Indian Tech Startup Report 2025
This article is part of the Leaders’ Thoughts series published on the VVLLP website. Statistical data and institutional information cited is drawn from publicly available third-party research and government sources. This article is intended for informational purposes.