India attracts USD 343.64 million FDI equity inflow in R&D sector during 2021, which is 516% higher as compared to 2020

Karnataka is the top FDI Equity recipient state in R&D followed by Telangana and Haryana

Singapore is the top investing country in R&D with 40% share of total FDI Equity in R&D followed by Germany and U.S.A

Robust and growing R&D sector to benefit the economy by driving innovation, increasing productivity, thereby leading to higher economic growth

India attracted USD 343.64 million FDI equity inflow in R&D sector during C.Y. 2021 (Calendar Year) which is 516% higher as compared to previous C.Y. 2020 (USD 55.77 million). FDI is permitted under 100% automatic route in R&D sector subject to applicable laws/regulations, security and other conditionalities.

Karnataka is the top FDI Equity recipient state in R&D during C.Y. 2021 followed by Telangana and Haryana. The following states showed growth of more than 250% during C.Y. 2021 compared to previous C.Y. 2020: Telangana, Karnataka, Haryana, Andhra Pradesh & Tamilnadu.

Singapore is the top investing country in R&D during C.Y. 2021 with 40% share of total FDI Equity in R&D followed by Germany (35%) and U.S.A (11%). Further, FDI Equity inflow from several countries like Germany, Mauritius, France, Singapore, Oman and U.S.A. showed an increase of more than 200% as compared to previous C.Y. 2020.

Daimler Truck Innovation Center was the top FDI Equity inflow recipient company in R&D during C.Y. 2021 with 35% share of total FDI Equity in R&D followed by Aragen Life Sciences Private Limited (34%) and Stelis Biopharma Private Limited (21%).

These trends indicate a robust and growing R&D sector which would benefit the economy by driving innovation, increasing productivity, thereby leading to higher economic growth.

Research and Development (R&D) plays an important role in the development of a knowledge-based economy that can pave the way for higher economic growth. Foreign Direct Investment (FDI) infuses long term sustainable capital in the economy and contributes towards technology transfer, development of strategic sectors, greater innovation, competition and employment creation amongst other benefits. It has been a continuous endeavor of the Government to attract and promote R&D intensive FDI in order to supplement domestic capital, technology and skills for accelerated economic growth and development.

FDI in R&D sees surge, reflecting policy allowing full automatic route and encouraging technology investment. India saw a marked rise in FDI equity inflows into the R&D sector in 2021, with major investor countries and concentrated corporate recipients; several states led by Karnataka showed strong year-on-year growth. FDI in R&D is permitted under the full automatic route, subject to applicable laws, regulations, security and other conditionalities, and policy aims to attract R&D-intensive FDI to supplement domestic capital, enable technology transfer, and promote innovation and economic growth.