Research and Development (R&D) is a concept defined as creative work undertaken systematically to increase the stock of knowledge, including knowledge of man, culture, and society, and the use of this knowledge to devise new applications. It is broadly categorized into basic research, applied research, and development research. The concept gained formal recognition in India with the Scientific Policy Resolution (SPR) of 1958, which was the first official Science and Technology policy of independent India. Drafted under Prime Minister Jawaharlal Nehru, the SPR aimed to lay the foundation for scientific enterprise and use science and technology as an instrument for socio-economic transformation and nation-building.
The mechanism for promoting R&D in India involves a mix of fiscal incentives and dedicated institutions. Key provisions include tax deductions for capital and revenue expenditure incurred for R&D activities, primarily governed by Section 35 of the Income Tax Act, 1961. Additionally, a reduced tax rate of 10% is levied on royalty income earned from patents developed and registered in India, a provision known as the patent box regime.
R&D connects to major government bodies like the Council of Scientific and Industrial Research (CSIR), the Department of Science and Technology (DST), and the recently established Anusandhan National Research Foundation (ANRF). A significant recent change is the launch of the Research, Development and Innovation (RDI) Scheme, approved by the Union Cabinet on July 1, 2025, with a total outlay of ₹1 lakh crore over six years. This scheme, a major initiative under the ANRF, aims to catalyze private sector investment in high-impact R&D through long-term loans at low or nil interest rates, focusing on strategic technologies like deep-tech and AI. While the government has introduced new funding mechanisms, a previous financial impetus, the 200% super deduction on R&D expenses, was replaced with a 100% deduction, which has been noted as a reduction in the financial incentive for innovators. India's Gross Expenditure on R&D (GERD) stood at 0.84% of GDP in 2023–24, which is lower than the global average of around 1.8%.