China Catching Up With India on R&D Investment

By Anant Vijay Kala

Wang Zhao/Getty Images

China, which is one of the fastest growing automobile markets in the world and aspires to become a global manufacturing hub.

China is fast catching up with India as a destination for foreign investment in proprietary research and development, and could come to knock India from one of the few economic perches in which it is ahead of its northern neighbor, a study shows.

China, the world's fastest-growing major economy, receives almost four times as much foreign direct investment as India—about $105 billion in 2010. But for years India has been ahead of China on investments into R&D. In the fiscal year ended March 31, total R&D investment into India stood at $11.6 billion, which includes research for both proprietary and third-party use, compared to $9 billion for China, said Praveen Bhadada, a manager at the consulting firm Zinnov, which conducted the study.

But investment into China to fuel new products and innovations is growing at a much faster clip, at 16% a year compared to India's 11% growth a year.

And China looks set to soon overtake India when it comes to proprietary research and development, with foreign investment for these purposes currently at around $7.65 billion in the last fiscal year, putting the country is within sniffing distance of India's $7.75 billion worth of investment—largely because of the country's better infrastructure.

Mr. Bhadada said on Wednesday that China has be [...]

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