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FDI in R&D in India: An Introspection

Author

Listed:
  • Sanjib POHIT

    (CSIR-National Institute of Science Technology & Development Studies, New Delhi, India)

  • Pradip BISWAS

    (College of Vocational Studies, University of Delhi, India)

Abstract

Of late, India has emerged as an attractive destination of foreign direct investment (FDI). Along with it, multinationals have been investing significantly in research and development in India. In this context, this paper makes an attempt to analyze salient features of FDI in R&D and makes an assessment of the gains from R&D initiatives of MNCs in India. To be specific, the paper attempts to demystify the FDI flows in R&D with a view to understand whether these types of flows would help in raising the innovation potential of India. We find that there has been a rise FDI in R&D in India. However, the rise has not been commensurate only with rise in Core R&D activities. Rather, more than 50% of the inflows in R&D by MNCs have come for non-core R&D activities. This will not help in promoting innovation culture in India and make India a global manufacturing hub.

Suggested Citation

  • Sanjib POHIT & Pradip BISWAS, 2016. "FDI in R&D in India: An Introspection," Turkish Economic Review, KSP Journals, vol. 3(3), pages 513-521, September.
    • Handle: RePEc:ksp:journ2:v:3:y:2016:i:3:p:513-521
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    References listed on IDEAS

    as
    1. Alexei Karas & Koen Schoors & Laurent Weill, 2010. "Are private banks more efficient than public banks?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(1), pages 209-244, January.
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    More about this item

    Keywords

    FDI; R&D; Core R&D; India; Manufacture; Non-core R&D;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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