Abstract
This paper surveys the trends in industrial R&D in India over the last two decades. It shows that there has been a rapid rise in R&D expenditure and a shift in its composition towards in-house corporate R&D and away from R&D in government laboratories, which is explained by the laboratories' lack of market orientation and manufacturing experience. According to cross-section studies of corporate R&D, larger companies aim towards larger technological advances and take a longer view; but the overall composition of corporate R&D shows no discernible change. This apparent inconsistency is explained by the development of the technology market. Much R&D was triggered off by the need for import replacement arising from import controls till 1965 and later by the need for product diversification in the recession. But construction of new plants and mechanization for speeding up operations, activities where sustained R&D can yield large firms a steady flow of innovations, were unimportant or infrequent, and the demand for technology they gave rise to was largely met by imports.
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