India’s R&D debate misses a crucial part of the problem

Foreign portfolio investors (FPIs) have withdrawn nearly Rs 2.7 lakh crore from India’s equity market since January 2026. On the other hand, the market capitalisation of countries like Taiwan and South Korea has soared, surpassing India, to become the world’s fifth and sixth largest equity markets, respectively. This is indicative of the waning global interest in Indian equities, and by extension, Indian firms. 

One of the reasons for this, as stated by Ruchir Sharma, Chairman of Rockefeller International, is that India focuses too little on R&D.  Data from the Centre for Technology, Innovation and Economic Research (CTIER) shows that Indian industry invests well below global sectoral benchmarks on R&D. This is often framed as lack of ambition within industry or a sign of their short-term focus. While there is truth to this framing, it is only one part of the story.. The crucial missing part is the Indian investors’ lack of interest in R&D.