India lacks innovations in automobile sector, need to hike substantial investments in R&D: NITI Aayog

India's growth in the global automobile sector is held back due to a lack of innovation, primarily driven by inadequate Research and Development (R&D) infrastructure, says a report by NITI Aayog. The report stated that India's spending on R&D remains among the lowest in the world, especially when compared to leading automotive nations such as Germany, Japan, and the United States.

It said "One of the most critical barriers to India's growth in the global automotive sector is the lack of innovation, largely driven by inadequate Research and Development (R&D) infrastructure.".

The report added "This underinvestment severely limits the country's ability to compete in emerging technologies such as EVs, autonomous driving, and smart mobility solutions".

While Indian manufacturers have built a strong reputation for producing low-cost, high-volume vehicles, the report noted that the absence of a strong innovation culture has prevented the development of advanced and differentiated products. This lack of innovation makes it difficult for India to stand out in the highly competitive global automobile market.

One of the major challenges cited in the report is the minimal collaboration between the industry, academic institutions, and research organisations. This limited interaction restricts the exchange of ideas and technological breakthroughs that are crucial for developing next-generation automotive solutions.

As a result of these gaps, Indian companies often depend on foreign technologies, which increases manufacturing costs and reduces the potential to build cutting-edge vehicles locally.

The report specifically points out that India is lagging in critical areas such as battery technology, Advanced Driver Assistance Systems (ADAS), and AI-driven manufacturing. These technologies are seen as essential for the future of the global automotive industry

To overcome these challenges and achieve long-term growth, NITI Aayog has emphasised the need for a substantial increase in R&D investment.

It said, "To remain competitive and achieve long-term growth, India must significantly increase its R&D expenditure and build a robust ecosystem that fosters innovation and technological advancement".

The report called for the development of a strong ecosystem that encourages innovation, promotes collaboration, and enables Indian manufacturers to become globally competitive in the automotive space.

Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape.