India’s research and development (R&D) expenditure is projected to reach $20 billion by 2025, marking a significant increase compared to previous years.

This funding is allocated towards the creation of innovative technologies, the development of superior gadgets, and addressing major challenges through various R&D projects in India.

However, it is important to note that this financial resource is not distributed uniformly across India’s 28 states and 8 Union Territories (UTs).

Certain regions are investing heavily in research, while others have minimal funds available.

Let us explore the reasons behind this disparity and its implications for India’s R&D spending in 2025.

Research & Development Expenditure of India

Rank	State/Union Territory	Estimated R&D Expenditure (Billion USD)
1	Karnataka	4.50
2	Tamil Nadu	3.50
3	Maharashtra	3.00
4	Uttar Pradesh	2.00
5	Gujarat	1.80
6	Telangana	1.50
7	Delhi	1.20
8	Andhra Pradesh	0.80
9	Haryana	0.70
10	West Bengal	0.60
11	Kerala	0.50
12	Assam	0.40
13	Odisha	0.30
14	Punjab	0.25
15	Rajasthan	0.25
16	Madhya Pradesh	0.20
17	Uttarakhand	0.15
18	Himachal Pradesh	0.10
19	Chhattisgarh	0.08
20	Jharkhand	0.08
21	Goa	0.05
22	Puducherry	0.05
23	Chandigarh	0.03
24	Dadra and Nagar Haveli and Daman and Diu	0.03
25	Arunachal Pradesh	0.02
26	Manipur	0.02
27	Meghalaya	0.02
28	Mizoram	0.02
29	Nagaland	0.02
30	Sikkim	0.02
31	Tripura	0.02
32	Jammu and Kashmir	0.01
33	Andaman and Nicobar Islands	0.00
33	Bihar	0.00
33	Ladakh	0.00
33	Lakshadweep	0.00

By 2025, India’s R&D budget is estimated to be approximately $20 billion, which constitutes around 0.6% of the nation’s GDP – this statistic is referred to as India’s R&D expenditure as a percentage of GDP for 2025.

Although this percentage is lower than that of countries such as the United States or China (which range from 2% to 3%), it is experiencing rapid growth, driven by government initiatives like the Anusandhan National Research Foundation and increased participation from private enterprises.

The challenge lies in the fact that a significant portion of this funding is concentrated in only a few states, leaving others with very limited resources. What accounts for this uneven distribution?

Percentage share of every Indian State in R&D expenditure

Rank	State/Union Territory	Percentage Share (%)
1	Karnataka	22.50
2	Tamil Nadu	17.50
3	Maharashtra	15.00
4	Uttar Pradesh	10.00
5	Gujarat	9.00
6	Telangana	7.50
7	Delhi	6.00
8	Andhra Pradesh	4.00
9	Haryana	3.50
10	West Bengal	3.00
11	Kerala	2.50
12	Assam	2.00
13	Odisha	1.50
14	Punjab	1.25
14	Rajasthan	1.25
16	Madhya Pradesh	1.00
17	Uttarakhand	0.75
18	Himachal Pradesh	0.50
19	Chhattisgarh	0.40
19	Jharkhand	0.40
21	Goa	0.25
21	Puducherry	0.25
23	Chandigarh	0.15
23	Dadra and Nagar Haveli and Daman and Diu	0.15
25	Arunachal Pradesh	0.10
25	Manipur	0.10
25	Meghalaya	0.10
25	Mizoram	0.10
25	Nagaland	0.10
25	Sikkim	0.10
25	Tripura	0.10
32	Jammu and Kashmir	0.05
33	‘andaman and Nicobar Islands	0.00
33	Bihar	0.00
33	Ladakh	0.00
33	Lakshadweep	0.00

Why Certain States Excel in R&D

Some states are investing significantly in R&D in India due to their favorable conditions.

For instance, Karnataka, Tamil Nadu, and Maharashtra are recognized for their technology hubs such as Bengaluru, Chennai, and Pune, where major companies like Infosys, TCS, and international leaders like Intel have established their R&D headquarters in India.

These states are allocating billions of rupees because they possess prestigious universities, a large pool of engineers, and substantial industries in sectors like software, electronics, and pharmaceuticals.

For example, Bengaluru is home to research facilities for ISRO (Indian Space Research Organisation) and DRDO (Defence Research and Development Organisation), which consume a significant portion of the government’s R&D budget.

Additionally, Gujarat and Telangana are enhancing their efforts in this area. Gujarat is benefiting from new semiconductor initiatives, such as Micron’s chip research facility, which requires extensive R&D projects in India to advance innovative technologies.

Meanwhile, Hyderabad in Telangana is emerging as a center for biotechnology and IT research, with various companies establishing laboratories to foster innovation.

These states boast well-developed infrastructure, including good roads and reliable electricity, along with government incentives that facilitate corporate investment in R&D in India.

The government is also a crucial player in this landscape. Initiatives like the Production-Linked Incentive (PLI) scheme and the India Semiconductor Mission are channeling funds into states with robust industrial foundations.

Furthermore, the 2024-25 Budget allocates ₹1 lakh crore (approximately $12 billion) for R&D, primarily benefiting states that already have the necessary infrastructure to utilize these funds effectively, such as Uttar Pradesh, which is witnessing the expansion of tech parks in Noida.

Why Certain States Are Neglected

Conversely, regions such as Lakshadweep, Ladakh, and Bihar allocate nearly nothing for research and development. What is the reason?

They lack the infrastructure necessary for large-scale research initiatives. Lakshadweep, being a small island with minimal industrial activity, understandably does not host any major R&D headquarters in India.

Similarly, Bihar and states like Jharkhand face challenges due to inadequate infrastructure – consider unreliable electricity and poor road conditions—which hinder the establishment of research facilities.

Additionally, these regions do not possess a sufficient number of universities or skilled professionals to draw significant R&D investments.

In the Northeast, states like Manipur and Mizoram receive only a minuscule portion of India’s R&D budget for 2025.

Their remoteness and prioritization of fundamental needs such as transportation and education over advanced technological laboratories contribute to this issue.

Nevertheless, there is optimism – Assam is receiving attention in the form of a new Tata semiconductor initiative, demonstrating that with appropriate support, even less-developed states can begin to engage in the R&D sector.

What Factors Are Influencing the Variations?

So, what accounts for the disparity in R&D spending among Indian states in 2025? Here’s a detailed analysis:

Technology Centers: States that host cities such as Bengaluru or Chennai have a significant advantage. These locations attract both companies and skilled professionals, making them ideal for R&D initiatives in India.

In contrast, smaller states like Sikkim have yet to develop a similar appeal.

Government Funding: The central government allocates over 40% of India’s R&D budget, with a substantial portion directed towards states that house major research organizations like ISRO or CSIR.

Karnataka and Delhi reap considerable benefits from this funding.

Private Sector Investment: Approximately one-third of R&D spending in India is sourced from private enterprises.

These companies tend to establish their operations in regions with abundant talent and infrastructure, such as Maharashtra or Tamil Nadu, rather than in areas like Nagaland.

Educational Institutions: States with a high concentration of universities and engineering colleges, such as Kerala or Uttar Pradesh, receive more R&D funding due to the availability of researchers.

Conversely, regions like Ladakh lack this academic strength.

Emerging Industries: States that are investing in semiconductor manufacturing, such as Gujarat and Assam, are experiencing increases in R&D activities, as the production of chips requires extensive research.

This trend contributes to the gradual rise of India’s R&D expenditure as a percentage of GDP.

What Lies Ahead for India’s R&D?

India’s R&D landscape is expanding, yet the disparities among states present a significant challenge.

To address this issue, the government must allocate its ₹1 lakh crore R&D fund to regions like Bihar or the Northeast, rather than focusing solely on the more developed areas.

Enhancing infrastructure, including roads, electricity, and educational institutions in these regions, could prove beneficial.

Additionally, as international companies look to India for research opportunities – attracted by lower costs and a wealth of talent – states like Odisha or Punjab could also benefit if they strategically position themselves.

Source

• Invest India. (n.d.). Research and development in India. Retrieved August 30, 2025, from https://www.investindia.gov.in/sector/research-development
• Ministry of Electronics and Information Technology. (2023). India Semiconductor Mission. Government of India. Retrieved August 30, 2025, from https://www.meity.gov.in/semiconductors
• Ministry of Finance, Government of India. (2024). Union Budget 2024-25: Anusandhan National Research Foundation. Retrieved August 30, 2025, from https://www.indiabudget.gov.in/