Building world-class global companies from India through innovation 

Indian economy has been resilient despite geopolitical tensions, high energy costs, and other disruptions. India’s real GDP growth has remained above 7% for the past three years, reaching 7.8% in April to June 2026, placing the country among the world’s fastest-growing major economies. The growth occurred across various sectors of the economy, with manufacturing growing at 9.2%, services at 10%, and agriculture at 3.6%. With strong domestic demand and growing production potential, India is on a path to becoming the world’s third-largest economy. The next target is to transform the current growth into innovation-oriented, productivity-enhancing and employment-generating growth. 

India has moved up in global innovation rankings, from 81st place in 2015 to 38th in the Global Innovation Index in 2025. Moreover, India has the highest ranking among the 37 lower-middle-income countries and is a major player in Central and South Asia. WIPO classified India among the long-term’ innovation overperformers’ countries around the world for maintaining this status for 15 consecutive years (2011-2025). 

Based on the BCG data, India’s biggest innovation gap is not simply the amount of money spent on R&D, but its ability to build a broad and sustained pipeline of globally leading innovators. India had no firm on BCG’s Top 50 companies list in 2021 and 2022, before the Tata Group entered at number 20 in 2023. For comparison, in 2021 and 2022, the US had 27 firms in the Top 50, and in 2023, it had 25, while China leapt from 5 in 2021 to 7 in 2022 and 8 in 2023. Rising China is one of the most important megatrends of the last two decades. In 2005, there was not a single Chinese company among the top 50. But by 2023, eight of the top 50 companies will be from China. 

In contrast, India has always remained insignificant. In 2005 and 2006, India had 1 company among the top 50; in 2008, it had none, according to the data. Despite some success stories, such as 2 Indian companies in 2008 and 3 in 2009, India has had only 1 company at most. 

The 2025 BCG analysis highlights that 95% of Indian executives identified innovation as one of their top three strategic priorities, indicating that companies understand its importance. Therefore, the task for India is to evolve from innovation as a stated strategic priority to innovation at scale, which would involve increasing the number of companies capable of entering the global Top 50 and successfully transforming investments into products and businesses. 

Since Indian corporates spend only 41% of India’s R&D, compared with 77% in China, 75% in the US and 79% in South Korea, Indian industries must raise and, more importantly, stabilise R&D investment through multi-year, industry-linked research pipelines. India must increase funding for private research and development and strengthen its collaboration with universities to translate research results into technology. 

Industries Should Invest more in R&D to become more innovative. 

The amount of money the private sector invests in R&D is one of the main determinants of the success of innovation economies. In the US, corporations invested around $692 billion in R&D, representing 5% of the total revenue of $14 trillion. The investment of leading global companies shows the extent of the investment. For example, in 2024, Meta supported its R&D investment by $43.9 billion or 27% of its revenue, and Microsoft spent $29.5 billion on R&D, or around 12% of its revenue, in the financial year 2024. In 2024, Huawei invested 179.7 billion yuan in R&D, accounting for 20.8% of its revenue. Sustained R&D has made Huawei one of the world’s largest patent holders, with 150,000+ active granted patents.  

However, there are companies in India that are increasing their R&D investments: Tata Motors spent ₹29,398 crore on R&D in FY24 (6.7% of its revenue). Tata Motors was the highest spender on R&D among Nifty 100 companies in FY23 and FY24 and has transformed continuous innovation into quantifiable output of its intellectual property, filing 250 patents and 148 design applications in FY25, the highest number in a year for the company. Its R&D is focused on mobility solutions and alternative fuels, including battery-electric, CNG, LNG, and hydrogen technologies, and today Tata Motors is the No 1 EV player in India.  

Sun Pharma invested ₹3,178 crore in R&D in FY24 (6.7% of sales). Sun Pharma’s continuous innovation, with over ₹335 billion in cumulative R&D investment, demonstrates how sustained R&D investment can drive global technological and commercial scale. Sun Pharma has advanced through technological integration and process innovation to research and development of complex generics, speciality products, dermatology, ophthalmology, and oncology, including PAT (Process Analytical Technology), Quality by Design, Six Sigma, and manufacturing automation. Throughout the period, as indicated on the timeline, the company achieved 70% revenue and 10% EBITDA increases, then 6.5% revenue and 25.5% EBITDA increases, and later 10.4% revenue and 11.8% EBITDA increases. The journey shows how product differentiation and operational effectiveness are supported by research and development, process innovation and technology. 

Among PSU companies, Bharat Electronics Limited (BEL), a defence firm, incurred an investment of Rs 1236 crore as its investment of 6.24% of its revenues during the financial year 2023-24 as R&D expenses, helping the company generating 77% of its turnover from indigenous products and strengthening its long-term competitive advantage. Bharat Electronics Limited (BEL) illustrates how an Indian company can move from technology adoption to indigenous innovation. Its journey progressed from collaboration with Thales on radar technology and advanced R&D to smart manufacturing, cybersecurity and more than 40 innovations. This transformation was accompanied by 14% turnover growth and 33% PAT growth in 2023–24, while exports reached US$407 million, up 92% year-on-year. BEL therefore demonstrates how sustained R&D, technology partnerships and indigenous product development can help an Indian company build globally competitive capabilities and become a technology exporter. 

Fostering a Culture of Innovation 

The basis for the formation of reputable companies is innovation. It is important to make significant investments in technology, infrastructure, and digital ecosystems including AI. Nevertheless, true innovation occurs when people are encouraged to think creatively and question existing paradigms. Thus, countries globally recognised as innovative, such as the USA, Israel, South Korea, and Germany, foster environments where curiosity, cooperation, and entrepreneurship thrive.  

If India wants to create companies that can compete globally, the innovation strategy should be implemented from an early age. The emphasis should be placed on studying critical thinking, design thinking, scientific inquiry, and creativity. Students should gain invaluable knowledge through working on real-world problems and doing research. Higher education institutions such as IITs, IIMs, IISc, and leading universities should serve as innovation centres, driving change by developing theories and understanding how to turn them into commercial solutions. 

Furthermore, organisations play an important role in fostering innovation. Businesses must create an environment that enables employees to experiment, take risks, and learn from failures. It is important to note that many breakthroughs result from a willingness to try new things and challenge old norms. Organisations that focus on cross-functional teamwork, continual learning, and intrapreneurial behaviour are more likely to create innovative products and services that succeed in international markets.  

Equally important is the acceptance of entrepreneurship and risk-taking in society. Without this acceptance, innovation will be impossible. One must accept that innovation depends on viewing failure not as a setback but as an opportunity for learning. All stakeholders, such as government, business, and education, must create an atmosphere that puts entrepreneurs into the spotlight. Ultimately, India’s success in becoming an innovation leader depends on creating a culture of innovation.