India attracted a $343.64 million FDI equity inflow in the R&D sector during the calendar year (C.Y) 2021 which is 516% higher compared to 2020 ($55.77 million). FDI is permitted under a 100% automatic route in R&D sector subject to applicable laws/regulations, security, and other conditionalities.
Karnataka is the top FDI Equity recipient state in R&D during C.Y. 2021 followed by Telangana and Haryana. The following states showed growth of more than 250% during C.Y. 2021 compared to previous C.Y. 2020: Telangana, Karnataka, Haryana, Andhra Pradesh & Tamilnadu.
Singapore is the top investing country in R&D during C.Y. 2021 with a 40% share of total FDI Equity in R&D followed by Germany (35%) and the U.S.A (11%). Further, FDI Equity inflow from several countries like Germany, Mauritius, France, Singapore, Oman, and U.S.A. showed an increase of more than 200% as compared to the previous C.Y. 2020.
Daimler Truck Innovation Center was the top FDI Equity inflow recipient company in R&D during C.Y. 2021 with 35% share of total FDI Equity in R&D followed by Aragen Life Sciences Private Limited (34%) and Stelis Biopharma Private Limited (21%).
These trends indicate a robust and growing R&D sector that would benefit the economy by driving innovation, and increasing productivity, thereby leading to higher economic growth.
Research and Development (R&D) plays an important role in the development of a knowledge-based economy that can pave the way for higher economic growth. Foreign Direct Investment (FDI) infuses long-term sustainable capital in the economy and contributes towards technology transfer, development of strategic sectors, greater innovation, competition and employment creation amongst other benefits. It has been a continuous endeavor of the Government to attract and promote R&D-intensive FDI in order to supplement domestic capital, technology and skills for accelerated economic growth and development.