Innovation Deficit and Digital Sovereignty: Why India Must Bridge the Gap Now

Published by

on

India’s ambition to become a global technology powerhouse is often celebrated in headlines, but the reality beneath the surface is more sobering. Despite its talent pool and thriving startup culture, India has yet to produce tech giants on the scale of Nvidia, TSMC, or OpenAI. Structural weaknesses in research commercialisation, patent creation, and digital infrastructure security point to an innovation deficit that could limit the country’s long-term competitiveness.

The Innovation Deficit: Numbers Tell the Story

A recent analysis of India’s unicorn ecosystem revealed a stark truth: out of 117 unicorns, 101 have zero patents, and just two companies hold nearly two-thirds of all patents registered by these high-value startups.

This pattern suggests that while Indian startups are adept at business model innovation, they lag in deep technology development—especially in areas requiring sustained R&D investment, such as semiconductors, AI algorithms, or advanced manufacturing processes.

Generative AI – Promise Amid the Gaps

India’s generative AI sector is growing fast, with funding rounds attracting hundreds of millions of dollars in 2025. However, the bulk of this activity remains in service delivery or platform adaptation rather than foundational AI model creation. Without stronger incentives for core research and intellectual property generation, India risks becoming a service provider to global AI leaders rather than a leader itself.

The Critical Thinking Challenge

Tech pioneer Sabeer Bhatia recently warned that even IIT toppers are chasing secure jobs at banks like JP Morgan instead of building original tech ventures. This cultural preference for job security over entrepreneurial risk-taking, coupled with limited R&D infrastructure, slows India’s ability to produce breakthrough technologies.

Digital Sovereignty: The Undersea Cable Risk

Beyond innovation, India’s digital sovereignty faces another challenge: infrastructure vulnerability. Nearly all of India’s internet traffic flows through just 17 undersea cables, most of which are owned or controlled by foreign companies. Any disruption—whether accidental, environmental, or geopolitical—could have severe economic and security consequences.

Strategic thinkers are urging India to:

Diversify landing points for cables across more coastal states.

Invest in domestic ownership and control of cable systems.

Build redundancy into satellite and terrestrial alternatives.

Bridging the Gap – Policy Priorities

1. R&D Incentives – Tax credits and grants for companies investing in deep tech research.


2. IP Infrastructure – Streamlined patent processes and funding for prototype development.


3. Talent Retention – Programs encouraging top engineers to pursue entrepreneurship rather than overseas or corporate jobs.


4. Secure Digital Infrastructure – Public-private investment in undersea cable diversification and ownership.


5. Global Partnerships – Collaborative R&D with trusted partners to accelerate technology transfer.

India stands at a crossroads. The world is moving into an era where intellectual property and digital sovereignty will define economic power. While the country’s talent and market size are undeniable strengths, they must be matched by systemic investments in innovation and infrastructure security.

The choice is clear: remain a service-driven economy vulnerable to external shocks, or become a self-reliant, innovation-led global leader.

#InnovationDeficit
#DigitalSovereignty
#GenerativeAI
#PatentGap
#TechLeadership
#RDInvestment
#Entrepreneurship
#UnderseaCables
#IPCreation
#TechInfrastructure

Leave a comment