New Delhi, Feb 3 (PTI): The Union Budget 2025-26 has allocated Rs 20,000 crore to bolster India’s research and development (R&D) ecosystem, with significant investments in artificial intelligence (AI), geospatial initiatives, and Atal Tinkering Labs. While industry experts have welcomed the move, they stress the need for sustained policy support and increased private sector participation.
Finance Minister Nirmala Sitharaman, in her budget presentation, emphasized the role of private sector-driven innovation and announced the establishment of 50,000 Atal Tinkering Labs over the next five years to nurture scientific curiosity among students.
"The Rs 20,000 crore allocation, expansion of AI and geospatial initiatives, and the focus on Atal Tinkering Labs will accelerate India’s digital transformation and global positioning in emerging technologies," Mukherjee told PTI. However, he stressed the importance of industry-academia collaboration, commercialization of research, and scalable funding models to maintain momentum.
Echoing similar sentiments, Ajay Kela, President & CEO of Wadhwani Foundation, welcomed the Rs 500 crore investment in AI-driven education, along with the establishment of five National Centres of Excellence for Skilling, which he believes will significantly enhance India’s workforce readiness.
Similarly, Vishwanathan Iyer, Director of Accreditation at Great Lakes Institute of Management, Chennai, stressed the need for deeper tax incentives for private-sector research.
"Encouraging corporate R&D spending through weighted deductions and public-private partnerships can accelerate innovation. A dedicated fund for high-risk, high-reward research, particularly in deep tech and defense, is crucial to ensuring India leads in disruptive innovations," he said.
"To progress faster, the government should consider increasing R&D funding, streamlining regulatory approvals, and providing significant tax breaks to encourage private sector participation," Chachra noted.
Meanwhile, Sourabh Kulshrestha, Dean of Research & Development at Shoolini University, highlighted a massive increase in the budget for the Department of Science and Technology (DST), which jumped from Rs 2,819 crore in 2024-25 to Rs 23,290 crore in 2025-26. This funding will support quantum computing, supercomputing, and geospatial infrastructure, reinforcing India's growing capabilities in frontier technologies.
Finance Minister Nirmala Sitharaman, in her budget presentation, emphasized the role of private sector-driven innovation and announced the establishment of 50,000 Atal Tinkering Labs over the next five years to nurture scientific curiosity among students.
Strengthening Innovation and AI
Calling the budget a “significant step” in India's R&D expansion, Shirshendu Mukherjee, Managing Director of Wadhwani Innovation Network, highlighted the government's strong commitment to fostering innovation-led growth."The Rs 20,000 crore allocation, expansion of AI and geospatial initiatives, and the focus on Atal Tinkering Labs will accelerate India’s digital transformation and global positioning in emerging technologies," Mukherjee told PTI. However, he stressed the importance of industry-academia collaboration, commercialization of research, and scalable funding models to maintain momentum.
Echoing similar sentiments, Ajay Kela, President & CEO of Wadhwani Foundation, welcomed the Rs 500 crore investment in AI-driven education, along with the establishment of five National Centres of Excellence for Skilling, which he believes will significantly enhance India’s workforce readiness.
Need for More R&D Funding and Incentives
Despite the sizable investment, experts argue that India needs to increase R&D expenditure to compete with countries like China, Japan, and South Korea. Bharat Kale, Emeritus Scientist and Director of Material Science at MIT World Peace University, pointed out that private sector investment in R&D remains negligible and must be encouraged further.Similarly, Vishwanathan Iyer, Director of Accreditation at Great Lakes Institute of Management, Chennai, stressed the need for deeper tax incentives for private-sector research.
"Encouraging corporate R&D spending through weighted deductions and public-private partnerships can accelerate innovation. A dedicated fund for high-risk, high-reward research, particularly in deep tech and defense, is crucial to ensuring India leads in disruptive innovations," he said.
Energy and Tech Research Investments
The budget also earmarks Rs 20,000 crore for small modular reactor (SMR) R&D, a move welcomed by energy-intensive industries. However, Dushyant Chachra, CFO of renewable energy firm SAEL, believes a more comprehensive and sustained strategy is needed."To progress faster, the government should consider increasing R&D funding, streamlining regulatory approvals, and providing significant tax breaks to encourage private sector participation," Chachra noted.
Meanwhile, Sourabh Kulshrestha, Dean of Research & Development at Shoolini University, highlighted a massive increase in the budget for the Department of Science and Technology (DST), which jumped from Rs 2,819 crore in 2024-25 to Rs 23,290 crore in 2025-26. This funding will support quantum computing, supercomputing, and geospatial infrastructure, reinforcing India's growing capabilities in frontier technologies.
Conclusion
While the Rs 20,000-crore push for R&D marks a significant milestone, experts agree that India must sustain and expand its investment in innovation. Increased private sector participation, tax incentives, and industry-academia partnerships will be essential in ensuring the country remains at the forefront of cutting-edge research and technological advancements.
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