India’s Innovation Revolution: Rising in the Global Innovation Index Through AI, Startups, and Digital Transformation -

The Global Innovation Index (GII) is an annual ranking and benchmarking tool that evaluates the innovation performance of economies across the world. It is published jointly by the World Intellectual Property Organization (WIPO), Cornell University, and INSEAD. The GII aims to encourage innovation-driven policymaking and highlight strengths and weaknesses in national innovation systems.

The index is divided into two sub-indices:

Innovation Input Index – which measures factors that enable innovation, such as institutions, human capital and research, infrastructure, market sophistication, and business sophistication.
Innovation Output Index – which captures measurable results of innovation, such as knowledge and technology outputs and creative outputs.

Within these categories lie more than 80 indicators, covering aspects like R&D investment, patent filings, university-industry collaboration, digital connectivity, and creative goods exports. Together, they provide a holistic view of innovation capacity, capturing both tangible outcomes and enabling conditions.

The GII is not merely a ranking but a policy tool, helping governments assess their innovation ecosystems, benchmark performance, and design strategies to close existing gaps.

GII 2025: Global Landscape and Trends

The Global Innovation Index 2025 ranked Switzerland as the most innovative economy in the world, followed by Sweden, the United States, the Republic of Korea, and Singapore. China entered the top ten for the first time, marking a significant achievement for a middle-income economy.

The global picture, however, reveals challenges. The growth in R&D expenditure has slowed worldwide, dropping to under 3% in 2024. This suggests a plateau in innovation investment amid economic uncertainties, inflation, and shifting geopolitical dynamics.

An important trend is the rise of emerging economies like China, India, Turkey, and Vietnam, which are closing the innovation gap with advanced economies. Middle-income countries have improved their innovation outputs faster than their input growth, showing better efficiency and return on investment in innovation.

In regional terms, Central and Southern Asia outperformed Latin America in innovation output scores, largely driven by India’s strong performance and growing digital and research ecosystem.

India’s Position in GII 2025

India ranked 38th out of 139 economies in the Global Innovation Index 2025. This represents a significant improvement compared to its 81st position in 2015. India also ranked first among lower-middle-income economies and first in the Central and Southern Asia region.

India’s performance has been particularly strong in the Knowledge and Technology Outputs pillar, where it ranks among the top 25 economies. The country’s Creative Outputs and Human Capital and Research pillars also continue to show steady growth. However, areas like Business Sophistication, Infrastructure, and Institutional Quality remain weaker links that need policy strengthening.

India also features prominently in the Top 100 global innovation clusters, with Bengaluru, Delhi, and Mumbai emerging as major global technology hubs.

Drivers of India’s Innovation Growth

India’s consistent climb in the GII rankings is the result of several factors:

Rising R&D investment – Both public and private sector spending on research and technology has grown, especially in digital, defense, and healthcare sectors.
Dynamic startup ecosystem – India’s booming startup sector, with over 100 unicorns, drives innovation in technology, fintech, AI, biotech, and sustainability.
Digital transformation – Initiatives like Digital India, Unified Payments Interface (UPI), and Aadhaar have created world-class digital public infrastructure, fostering innovation at scale.
Policy support and institutional reforms – The Atal Innovation Mission, Startup India, and National IPR Policy have strengthened innovation governance.
Knowledge clusters and global linkages – Cities like Bengaluru and Hyderabad are now global R&D hubs, hosting multinational labs and high-tech collaborations.

Challenges and Bottlenecks

Despite progress, India still faces critical challenges that hinder its innovation potential:

Institutional inefficiencies such as complex regulations, bureaucratic hurdles, and slow approvals.
Infrastructure deficits, particularly in logistics, connectivity, and energy reliability.
Limited business sophistication, as many small and medium enterprises lack access to advanced technology and innovation finance.
Low private R&D share, since much of India’s research expenditure remains public-sector driven.
Regional disparity, with most innovation concentrated in a few states and metropolitan regions.
Talent retention issues, as brain drain and skill gaps persist in advanced research areas like AI and quantum computing.

The Road Ahead: Strategy for India

India’s ambition to become a global innovation leader depends on addressing these systemic issues and strengthening innovation capacity across all sectors. Some key strategies include:

Enhancing institutional quality by ensuring regulatory clarity, faster decision-making, and better protection of intellectual property rights.
Boosting private sector R&D, encouraging collaboration between industry and academia, and promoting venture capital participation.
Improving infrastructure, especially digital and logistics frameworks, to make innovation more inclusive and accessible.
Expanding human capital through STEM education, research scholarships, and deep-tech skill development.
Decentralizing innovation by promoting local innovation hubs, tier-2 city incubators, and state-level innovation missions.
Aligning innovation with sustainability, prioritizing sectors like clean energy, agriculture, and healthcare to ensure inclusive development.
Global partnerships through technology-sharing, joint research, and international innovation alliances.

Conclusion

The Global Innovation Index is both a reflection of current capabilities and a roadmap for future progress. India’s consistent rise to 38th position is a testament to its evolving innovation ecosystem, driven by entrepreneurship, technology adoption, and strong government support. However, the next phase of India’s innovation journey must focus on deep structural reforms—expanding research, improving infrastructure, and embedding innovation into governance and education.

If these efforts are sustained, India can not only move into the top 20 in coming years but also redefine innovation as a tool for inclusive growth, sustainable development, and global competitiveness.

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