In New Delhi [India], Indian defense companies lag far behind their global counterparts in research and development (R&D) intensity, despite substantial overall spending.
According to the India Infoline Finance Limited (IIFL) report, these companies allocate only 1.2 per cent of their revenues to R&D, significantly lower than the global average of 3.4 per cent. This gap highlights the need for greater investment in innovation to keep pace with global standards.
Hindustan Aeronautics Limited (HAL) stands out as an exception among Indian companies, showing a strong commitment to R&D.
With an impressive R&D intensity of 9.3 per cent, HAL leads not only within India but also globally among the companies studied.
In fiscal 2022-23, HAL invested $301 million in R&D, more than double the R&D spend of Bharat Electronics Limited (BEL), the second-largest R&D spender among Indian companies, which allocated 130 million dollars.
This significant investment underlines HAL's dedication to advancing technology and innovation.
Other Indian companies are also showing promising results in R&D. Bharat Dynamics Limited ranks third in R&D intensity among all the companies studied, with a commendable 6.1 per cent.
This figure is 3.7 times higher than that of Sika Interplant, the second largest spender on R&D in the low-income group.
However, despite these individual successes, the broader trend reveals a worrying lag in R&D intensity across the Indian defense sector.
The Indian defense sector also lags in the proportion of employees with PhDs, averaging just 0.1 per cent compared to the global average of 0.3 per cent.
Despite this, companies such as Sika Interplant and High Energy Battery lead the low-income group with 2.2 percent and 2.1 percent of employees with PhDs, respectively.
These figures highlight the need to pay greater attention to advanced qualifications within the industry to drive innovation and research.
In terms of academic and technical publications, Indian defense companies excel, producing 88.5 publications per billion dollars of revenue, more than double the global average of 37.9.
High Energy Battery leads this category with an impressive 6,692 posts per billion dollars of revenue, followed by BEL and Bharat Forge with 177 and 173 posts, respectively.
However, this strength of publications is not reflected in the production of patents, a critical indicator of innovation and technological advancement.
Indian defense companies produce just 7.3 patents per $1 billion of revenue, a stark contrast to the global average of 240.
Bharat Forge, despite leading among Indian companies in patent production, highlights the significant gap between India and global leaders like Safran SA, which has 5,336 patents per $1 billion of revenue.
This disparity underlines the need to pay more attention to the generation of intellectual property within the Indian defense sector.
India, as the fourth largest defense spender globally, contributes approximately 3.6 per cent of global defense spending.
The country's defense budget has seen a steady increase and is projected to grow at an annual rate of 7 to 8 percent over the next five years.
The fiscal allocation for the Defense Research and Development Organization (DRDO) also increased to Rs 23,855 crore for FY24-25, up from Rs 23,263.89 crore in the previous fiscal year.
This budget increase aims to strengthen DRDO's capacity to develop new technologies, focusing on basic research and supporting private entities through initiatives such as the Development and Production Partner Programme.
Despite these initiatives, the average R&D intensity of Indian companies remains at 1.2 per cent, significantly below the global average of 3.4 per cent.
This disparity is further highlighted by the performance of high-revenue companies like Larsen & Toubro (L&T), which reported the highest revenue among the companies studied for FY23, but invested comparatively little in R&D, resulting in in a low R&D intensity. The Indian defense sector's lag in patenting efforts and the relatively low proportion of employees with PhDs indicate the need to pay greater attention to innovation and research.
This is crucial for India to maintain its competitive advantage and take advantage of the growing opportunities in the global defense market.
According to the India Infoline Finance Limited (IIFL) report, these companies allocate only 1.2 per cent of their revenues to R&D, significantly lower than the global average of 3.4 per cent. This gap highlights the need for greater investment in innovation to keep pace with global standards.
Hindustan Aeronautics Limited (HAL) stands out as an exception among Indian companies, showing a strong commitment to R&D.
With an impressive R&D intensity of 9.3 per cent, HAL leads not only within India but also globally among the companies studied.
In fiscal 2022-23, HAL invested $301 million in R&D, more than double the R&D spend of Bharat Electronics Limited (BEL), the second-largest R&D spender among Indian companies, which allocated 130 million dollars.
This significant investment underlines HAL's dedication to advancing technology and innovation.
Other Indian companies are also showing promising results in R&D. Bharat Dynamics Limited ranks third in R&D intensity among all the companies studied, with a commendable 6.1 per cent.
This figure is 3.7 times higher than that of Sika Interplant, the second largest spender on R&D in the low-income group.
However, despite these individual successes, the broader trend reveals a worrying lag in R&D intensity across the Indian defense sector.
The Indian defense sector also lags in the proportion of employees with PhDs, averaging just 0.1 per cent compared to the global average of 0.3 per cent.
Despite this, companies such as Sika Interplant and High Energy Battery lead the low-income group with 2.2 percent and 2.1 percent of employees with PhDs, respectively.
These figures highlight the need to pay greater attention to advanced qualifications within the industry to drive innovation and research.
In terms of academic and technical publications, Indian defense companies excel, producing 88.5 publications per billion dollars of revenue, more than double the global average of 37.9.
High Energy Battery leads this category with an impressive 6,692 posts per billion dollars of revenue, followed by BEL and Bharat Forge with 177 and 173 posts, respectively.
However, this strength of publications is not reflected in the production of patents, a critical indicator of innovation and technological advancement.
Indian defense companies produce just 7.3 patents per $1 billion of revenue, a stark contrast to the global average of 240.
Bharat Forge, despite leading among Indian companies in patent production, highlights the significant gap between India and global leaders like Safran SA, which has 5,336 patents per $1 billion of revenue.
This disparity underlines the need to pay more attention to the generation of intellectual property within the Indian defense sector.
India, as the fourth largest defense spender globally, contributes approximately 3.6 per cent of global defense spending.
The country's defense budget has seen a steady increase and is projected to grow at an annual rate of 7 to 8 percent over the next five years.
The fiscal allocation for the Defense Research and Development Organization (DRDO) also increased to Rs 23,855 crore for FY24-25, up from Rs 23,263.89 crore in the previous fiscal year.
This budget increase aims to strengthen DRDO's capacity to develop new technologies, focusing on basic research and supporting private entities through initiatives such as the Development and Production Partner Programme.
Despite these initiatives, the average R&D intensity of Indian companies remains at 1.2 per cent, significantly below the global average of 3.4 per cent.
This disparity is further highlighted by the performance of high-revenue companies like Larsen & Toubro (L&T), which reported the highest revenue among the companies studied for FY23, but invested comparatively little in R&D, resulting in in a low R&D intensity. The Indian defense sector's lag in patenting efforts and the relatively low proportion of employees with PhDs indicate the need to pay greater attention to innovation and research.
This is crucial for India to maintain its competitive advantage and take advantage of the growing opportunities in the global defense market.
