After CSR, Is It Time for Corporate India to Embrace CIR?

India wants to become an innovation superpower.

We want to lead in artificial intelligence, semiconductors, biotechnology, defence technology, space, robotics, clean energy and advanced manufacturing.

We aspire to become a developed economy by 2047.

Yet there is a number that should make us uncomfortable.

India's Gross Expenditure on Research and Development stands at approximately 0.64% of GDP, a level the Economic Survey itself describes as substantially below the global average.

For an economy with India's ambitions, this exposes a fundamental mismatch.

Our innovation ambitions are running far ahead of the capital being committed to realise them.

This is not merely an R&D gap.

It is an ambition-investment gap.

And somewhere within that gap lies an uncomfortable question for Corporate India:

If India's corporations have a responsibility towards the society in which they operate, do they also have a responsibility towards the technological future of the country in which they prosper?

Perhaps it is time for India to begin a serious conversation about something I would call Corporate Innovation Responsibility.

The Innovation Paradox

India does not lack ambition.

Nor does it lack talent.

We have built one of the world's largest startup ecosystems. Indian entrepreneurs are building companies in artificial intelligence, space technology, defence, biotechnology, climate technology, advanced manufacturing and financial infrastructure.

Our universities and research institutions produce scientists and engineers capable of competing globally.

The Indian government is increasingly putting its weight behind innovation. The ₹1 lakh crore Research, Development and Innovation Scheme represents perhaps the clearest acknowledgement yet of the challenge. The programme is designed to catalyse greater private-sector participation in R&D and help address the shortage of patient capital available for high-risk and deep-technology research.

In other words, the problem is no longer merely being identified by economists or commentators.

The Government of India itself is committing ₹1 lakh crore to get private capital to take greater technological risk.

That raises an unavoidable question.

If taxpayers, through the government, are prepared to commit ₹1 lakh crore to catalyse private innovation, how much of their own capital should India's largest and most profitable corporations be willing to put at risk?

Because a country of India's scale cannot build a world-class innovation economy primarily through government funding.

Government can create institutions. Government can fund fundamental science. Government can provide grants and de-risk emerging technologies.

But ultimately, a mature innovation economy requires private industry to become one of its principal engines.

That transition has not yet happened at the scale India requires.

We Have Asked a Similar Question Before

India once confronted another fundamental question about corporations.

What responsibility does a profitable company have beyond generating returns for its shareholders?

One answer was Corporate Social Responsibility.

Under Section 135 of the Companies Act, qualifying companies are required to spend at least 2% of their average net profits from the preceding three financial years on eligible CSR activities.

The principle behind CSR is powerful.

Companies do not exist in isolation. They benefit from public infrastructure. They hire talent educated by society. They operate within institutions maintained by the state. They sell to consumers whose prosperity depends on the wider economy.

Therefore, we concluded that successful corporations have a responsibility to contribute to the society that enables their success.

And there is a lesson in what India has achieved by institutionalising that principle.

According to Ministry of Corporate Affairs data, companies reported more than ₹1.44 lakh crore in CSR expenditure over the five financial years from 2019-20 to 2023-24. Annual CSR expenditure reached approximately ₹34,900 crore in FY2023-24.

Whatever one's view of individual CSR programmes, the larger achievement is difficult to ignore.

India took an idea, that profitable corporations have a measurable responsibility towards society, and created a mechanism capable of mobilising tens of thousands of crores every year.

If India's CSR architecture can mobilise approximately ₹35,000 crore annually for social development, should an economy aspiring to technological leadership not be capable of mobilising comparable corporate capital for research and innovation?

Now imagine applying the same institutional imagination, not necessarily the same mandatory spending model, to innovation.

What if India could systematically mobilise tens of thousands of crores of additional corporate capital every year towards R&D, deep technology, university research and technology commercialisation?

Not as expenditure.

As investment.

Three Numbers Tell a Story

Consider three numbers.

₹1.44 lakh crore. That is the CSR expenditure reported by Corporate India over five financial years.

₹1 lakh crore. That is the size of the Government of India's RDI initiative designed to catalyse private-sector participation in research and innovation.

0.64%. That is India's R&D expenditure as a share of GDP.

Put these together, and a larger question emerges.

India has demonstrated that it can institutionalise corporate participation in social development. The government has demonstrated that it is willing to commit enormous public resources to catalyse private innovation. Yet India's overall investment in R&D remains modest relative to its ambitions.

Perhaps the missing piece is not capital itself.

Perhaps it is the institutional mechanism that consistently connects corporate capital with India's innovation ecosystem.

That is the space Corporate Innovation Responsibility could occupy.

Why CVC Alone Is Too Narrow

Corporate Venture Capital is not a new idea. Globally, corporations have long invested strategically in emerging companies and technologies.

The logic goes beyond financial returns. Corporations gain visibility into emerging technologies, develop relationships with entrepreneurs, discover potential acquisition targets, and gain access to innovation happening outside their own organisations.

And startups gain something that traditional financial investors cannot always provide: customers, factories, distribution, industry expertise, engineers, supply chains, regulatory experience and global networks.

A startup receiving ₹20 crore in venture capital gains capital.

A startup receiving ₹20 crore from a strategic corporate investor, and access to factories, customers, engineers and distribution, may gain an entirely different trajectory.

A startup receiving corporate investment alongside industrial access may gain a different trajectory entirely from one receiving only financial capital.

But CVC alone may be too narrow a framework for India.

A corporation should not necessarily have to establish a venture capital fund to contribute to India's innovation ecosystem. It could invest in its own R&D. It could fund university laboratories. It could sponsor doctoral research. It could finance technology commercialisation. It could establish industry-academia research centres. It could provide testing infrastructure to startups. It could become the first industrial customer for an emerging Indian technology.

All of these contribute to the same larger objective.

Which is why India needs to think beyond Corporate Venture Capital.

Corporate Innovation Responsibility, CIR.

CSR asks companies to contribute to social development.

CIR would encourage companies to contribute to India's technological and innovation capacity.

CVC would be one of several ways to fulfil that responsibility.

CIR Must Not Become CSR 2.0

This distinction is critical.

Innovation cannot be reduced to a compliance exercise.

If India simply requires corporations to spend a fixed percentage of profits on "innovation", an entire compliance industry could emerge overnight. Funds would be created. Consultants would arrive. Reports would be published. Money would technically be deployed. Boxes would be ticked.

And very little genuine innovation might occur.

Because innovation is fundamentally different from philanthropy.

Innovation involves uncertainty, failure, long time horizons, technical risk, commercial risk, and occasionally, extraordinary returns.

Any Corporate Innovation Responsibility framework must therefore preserve the economics of investment.

If a corporation invests ₹100 crore in an Indian deep-tech company and that company eventually becomes worth ₹10,000 crore, the corporation should benefit from that success. The objective should not be to take money away from corporations. The objective should be to encourage corporations to deploy more capital towards the technologies and companies that could define India's economic future.

This is not charity. It is capitalism aligned with national capability building.

There is another fundamental difference.

CSR money is largely spent. Innovation capital can compound.

₹1 invested intelligently in innovation is not necessarily ₹1 consumed. It can become ₹10. Or ₹100. Or occasionally the foundation of an industry that did not previously exist.

₹1 invested intelligently in innovation is not necessarily ₹1 consumed. It can become ₹10. Or ₹100. Or, occasionally, the foundation of an industry that did not previously exist.

Start With Disclosure, Not Compulsion

India does not need to begin by forcing corporations to invest.

There is a simpler first step.

Make corporate innovation investment visible.

Imagine if every large listed company disclosed an annual Innovation Investment Ratio, measuring qualifying investments in research and development, corporate venture capital, deep-tech startups, university research partnerships, patent development, industry-academia laboratories, and strategic technology initiatives.

The precise methodology would require careful design and sector-specific consideration. But the principle is simple.

Every major corporation should be able to answer one question: how much of our economic capacity are we investing in creating the future?

Imagine opening an annual report and seeing:

CSR Expenditure: ₹500 crore

Suddenly, something changes. Investors can compare companies. Boards can compare themselves with competitors. Employees can see whether their company is investing in its future. Policymakers can identify sectors where innovation investment is weak.

And society can ask: which of India's largest corporations are actually investing in the next generation of Indian technologies and companies?

Measurement changes behaviour. What gets disclosed gets discussed. What gets compared eventually becomes competitive.

A Framework That Can Evolve

Before India mandates Corporate Innovation Responsibility, India should first make innovation investment measurable. A framework could evolve gradually:

Phase One: Measure. Develop a standard definition of qualifying corporate innovation investment.

Phase Two: Disclose. Large listed companies publish their Innovation Investment Ratio through standardised reporting.

Phase Three: Compare. Create sector-specific benchmarks. A pharmaceutical company should not be compared with a retailer. A semiconductor company should not be compared with a bank. But companies within industries can be compared with one another.

Phase Four: Incentivise. Companies exceeding defined innovation benchmarks receive incentives for qualifying investments, particularly in strategic technologies and high-risk R&D.

Phase Five: Catalyse. Government programmes such as the ₹1 lakh crore RDI initiative are designed to crowd in corporate capital. One rupee of intelligently deployed public risk capital should aim to mobilise several rupees of private innovation capital.

Only after these mechanisms have matured should India even consider whether any form of mandatory obligation is necessary.

The objective should not be regulation for the sake of regulation. The objective should be to build a culture in which not investing in innovation becomes increasingly difficult for a major corporation to justify.

Imagine the Scale

Now imagine hundreds of India's largest corporations participating seriously in the country's innovation ecosystem.

A steel company investing in advanced materials. An automobile manufacturer backing battery technology and autonomous systems. A pharmaceutical company financing biotechnology research. A bank investing in cybersecurity and financial infrastructure. An energy company supporting storage, hydrogen and clean technologies. A telecommunications company investing in semiconductors and artificial intelligence. A mining company funding sustainable extraction technologies. A manufacturing conglomerate partnering with universities to commercialise new processes.

The impact would extend far beyond the capital deployed.

India would begin connecting three ecosystems that too often operate separately: corporate capital, scientific research, and entrepreneurial ambition.

That connection could become one of India's greatest competitive advantages.

The Valley Where Companies Disappear

Somewhere in India today, a small team is developing a technology capable of transforming an entire industry, perhaps at an IIT laboratory, perhaps in a startup office in Bhubaneswar. The technology may be extraordinary. The market may eventually be enormous. But the company may disappear long before either becomes obvious.

Not because the science failed.

Because the capital was impatient. Because commercialisation took too long. Because the first customer never came. Because the founders could not afford industrial-scale testing. Because they could not cross the valley between invention and commercial viability.

India loses potential companies in this valley. We may never know their names.

Corporate India could help build the bridge across it.

The companies that dominate India's economy today could help build the companies that will dominate India's economy tomorrow. Some may become customers. Some partners. Some investors. Some may eventually acquire them. And some may simply watch those startups grow into formidable Indian corporations in their own right.

That is how innovation ecosystems compound.

From CSR to CIR

This debate is ultimately bigger than venture capital.

It is about redefining corporate responsibility in a country with India's ambitions.

India made Corporate Social Responsibility part of the corporate vocabulary because we recognised that companies have responsibilities beyond their balance sheets.

Perhaps the next conversation should be about Corporate Innovation Responsibility.

Not because corporations owe the government money. Not because startups deserve charity. And certainly not because every corporation should become a venture capitalist.

But because the technological capabilities India will need in 2047 cannot be financed by the government alone.

India spends approximately 0.64% of its GDP on R&D. The government has created a ₹1 lakh crore initiative to catalyse research, development and private-sector participation. Corporate India has already demonstrated through CSR that a national framework can mobilise more than ₹1.44 lakh crore over five years for social development.

These numbers point towards an intriguing possibility.

India may not merely have an innovation-funding problem. It may have an innovation-capital-allocation problem. The capital exists. The scientific talent exists. The entrepreneurs exist. The industrial capacity exists. The government is willing to provide catalytic capital.

What remains underdeveloped is the institutional bridge connecting them.

Corporate Innovation Responsibility could be that bridge.

CSR asked Corporate India to participate in building a better society.

CIR would ask Corporate India to participate in building a more innovative nation.

And as India looks towards 2047, perhaps the question we should ask our largest corporations is no longer simply: how much profit did you create, or how much did you give back, but also: what did you invest in today that will ensure India remains competitive twenty years from now?

Department of Science and Technology: R&D Statistics and Indicators

Ministry of Corporate Affairs: CSR Portal, Annual CSR Expenditure Data

Press Information Bureau: Research, Development and Innovation Scheme

Ministry of Corporate Affairs: Companies Act 2013, Section 135

Economic Survey of India: Annual publication, Ministry of Finance