By Dr. N. Karuppaiah, Senior Project Advisor, Centre of Excellence in Advanced Automotive Research (CAAR), IIT Madras
India faces several systemic hurdles. The talent gap is significant, with fewer PhD-level researchers in automotive engineering compared to global peers.
India’s automotive industry is at a strategic inflection point. Already the world’s third-largest automobile market, producing over 28 million vehicles annually and leading in tractors and buses, the country now seeks to evolve from a manufacturing hub into a global innovation powerhouse. Yet, when measured against global benchmarks in research and development, India’s innovation intensity remains modest.
Globally, competitiveness is defined not by production volumes but by the ability to innovate. India invests just 0.65% of GDP in automotive R&D, compared to Germany (3.13%), Japan (3.41%), and the United States (3.59%). Patent output reflects the same gap: India holds around 4,552 global automotive patents, while China has 70,160 and the US 54,087. These nations have built integrated innovation cultures where academia, industry, and government collaborate seamlessly. India, by contrast, has relied on frugal innovation—ingenious, low-cost solutions that deliver affordability but rarely scale into global technologies. Without scaling indigenous innovation, India risks being locked into low-value assembly roles.
Focus on Four Pillars
Recognising this challenge, the government on its part has launched ambitious programmes. In 2024, the e-Mobility R&D roadmap was released by the Government, focusing on four pillars: energy storage cells, EV aggregates such as motors and drivetrains, materials and recycling, and charging and refuelling infrastructure. These align with national sustainability goals, including a 45% reduction in emission intensity by 2030, energy independence by 2047, and net-zero emissions by 2070. At its core, the roadmap emphasises Atmanirbhar Bharat—self-reliance—by reducing import dependence and fostering indigenous innovation. There are also other Government schemes like Auto PLI scheme, ACC Battery PLI, FDI support, PM E-Drive, Reduced Tax Rates, Vehicle Scrappage Policy, etc., in support of the Indian automotive industry. Automotive Mission Plan 2047 aims to enhance innovation, global competitiveness and sustainable development to establish India as a global automotive leader by 2047.
Ambition alone, however, is insufficient. India faces several systemic hurdles. The talent gap is significant, with fewer PhD-level researchers in automotive engineering compared to global peers. Patent productivity remains low relative to revenue, limiting competitiveness in innovation-driven markets. Import dependence is acute in critical areas such as EV batteries, semiconductors, and advanced materials. The ecosystem is fragmented, with weak collaboration between academia, industry, and government. Funding intensity also remains modest, with Indian firms allocating a smaller share of revenue to R&D. While the Indian government contributes 63.5% of total R&D expenditure, in China the government’s share surprisingly is only 22.4%, with private firms driving innovation.
Unique Advantages
Despite these challenges, India has unique advantages. The country’s scale and cost competitiveness position it well to integrate into global value chains, particularly in auto component manufacturing. Industry 4.0 technologies such as AI, automation, and advanced manufacturing offer the chance to leapfrog traditional stages of development. Circular economy practices, including recycling and sustainable materials, align India’s R&D with global sustainability benchmarks. Public-private partnerships, such as the Consultative Group on e-Mobility, foster collaboration across stakeholders. India’s vibrant startup ecosystem adds momentum, with young firms innovating in EV charging, battery recycling, and connected mobility.
To bridge the gap between global benchmarks and local capabilities, India must pursue a multi-pronged strategy. India must move from incremental improvements to disruptive innovation. That means incentivising high-risk, long-term R&D projects rather than short-term assembly gains. Firms need to increase R&D intensity by allocating a higher share of revenue to innovation, supported by fiscal incentives. Talent development is critical—expanding PhD programmes in automotive engineering, materials science, and AI, while strengthening industry-academia collaboration.
Academia-industry linkages must be institutionalised through joint research centres, shared testbeds, and collaborative patents. There is no dearth of talent in the country, considering that there are a sizeable number of Indians in R&D centres across the globe, but they need to be provided suitable opportunities in the country and nurtured.
Building Translational Research Centres
Translational research centres like the one set up by IIT Madras, the Centre of Excellence in Advanced Automotive Research, should be promoted. The objective of this centre is to mature conceptual research (TRL 1–3) into industry-ready technologies (TRL 8–10) through translational research (TRL 4–8), while also serving as a bridge that provides one-stop solutions to industry problems through academic expertise.
India must also build a stronger patent ecosystem by incentivising filings and protecting intellectual property rights. Localisation of supply chains is essential to reduce dependence on imports, particularly in batteries, semiconductors, and lightweight materials. Global collaborations should be encouraged, with Indian firms partnering with leading global players for joint research projects. India must embrace global collaboration—not as dependency, but as a pathway to accelerate knowledge transfer and reduce technological lag. Finally, policy support in the form of fiscal incentives, tax breaks, and streamlined regulations will provide the necessary environment for innovation to thrive.
Innovate, Sustain, Collaborate
Several Indian firms already exemplify this ambition. Mahindra Electric has pioneered EV development, investing in battery technology and connected mobility. TVS Motors has demonstrated patent leadership, proving that Indian firms can compete globally in innovation productivity. Tata Motors is investing in both electric vehicles and hydrogen fuel cell technologies, aligning with sustainability goals. These case studies show that Indian firms can succeed when they focus on innovation, sustainability, and collaboration.
India’s automotive R&D ambition is bold, necessary, and achievable. India must treat R&D as a national priority, not a corporate afterthought. The e-Mobility roadmap, strong industry players, and government-backed initiatives provide momentum. Yet bridging the gap requires systemic reforms in talent development, funding intensity, and ecosystem collaboration.