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Can Academia-Industry Ties Power India’s Manufacturing?
Articles- Jun 26,25
India's industrial sector has exhibited tremendous resilience and appetite for growth. However, the academia-industry collaboration will be crucial for India to become a worldwide manufacturing powerhouse, writes Yogesh Pandit, Director of Product Acceleration, FSID, IISc.
Walking throughout manufacturing clusters in Tamil Nadu and Karnataka, I find a dichotomy that defines Indian industry now. The enthusiasm is tangible; entrepreneurs are working 12-hour days, adjusting to changing worldwide orders, and discovering creative solutions for supply chain interruptions. Though most of these companies stay caught in what economists refer to as the "low-value trap", competing mostly on cost rather than innovation, even with this amazing resilience.
On paper, India's manufacturing story is rather remarkable. Employing over 27 million people and contributing 17 per cent to GDP, we have evolved to rank as the fifth biggest manufacturer worldwide. The recent Manufacturing PMI leap to 58.4 in June 2025 demonstrates robust momentum, with record export orders fuelling expansion. Our Production-Linked Incentive (PLI) schemes have spurred investments worth Rs 1.46 trillion and created over a million jobs across 14 critical sectors.
But here's what the stats don't capture: the frustration of a precision components manufacturer in Coimbatore who knows his products could compete globally if only he had access to the latest materials research or the Hyderabad biotech entrepreneur whose groundbreaking enzyme could transform textile processing but lacks the industrial alliances to scale manufacturing.
The intensity gap in innovation
India is ranked 30th on the World Economic Forum’s Global Manufacturing Index, categorised under “Legacy” economies: nations with established capability but “unclear” future competitiveness. Despite our scale, we still fall short on innovation intensity.
The data speaks volumes. Indian companies employ one-fourth as many PhD-level researchers as their global peers and invest less than a third as much in R&D. Even with a 1.2x increase in R&D spending from FY2016 to FY2023, India produces less than 8 per cent as many patents per billion USD as global innovation leaders. Clearly, the issue isn't just funding; it's the broken pipeline of knowledge flow between academia and industry.
Drawing lessons from world success stories
Perhaps the most pertinent paradigm for India's manufacturing revolution comes from Germany's Fraunhofer Society. With 76 institutes and 30,800 people, Fraunhofer derives 70 per cent of its €3.0 billion annual budget through industrial contracts, ensuring research remains commercially relevant while retaining scientific rigour. This balanced funding structure—30 per cent from government grants supporting preparatory research and 70 per cent from industry contracts pushing applied innovation—has made Fraunhofer institutes crucial to Germany's industrial excellence.
The Fraunhofer concept intrigues me not only in scale but also in its methodical effort to close the gap between laboratory findings and shopfloor implementations. They have developed "translation infrastructure"—that is, the people, systems, and alliances that translate scientific discoveries into commercial success.
Meanwhile, China’s “Little Giants” initiative backs over 12,000 deep-tech SMEs with more than $40 billion in funding. What sets it apart? A striking 90 per cent of these firms establish commercialisation partnerships from day one, embedding innovation directly into supply chains. India can adapt such models: institutionalised research centres like Fraunhofer for applied innovation and scalable support systems like China’s for innovation-driven SMEs.
Current state of academia-industry linkages in India
India's universities have extraordinary research capacity. We’re fourth globally in scholarly publications, and the Indian Institute of Science (IISc) tops the global research university rankings by citation impact. Yet the leap from academic brilliance to market impact remains elusive.
From my experience threading the interface between academia and industry, the impediments are more institutional and cultural than technical. Academic timetables work in years; industry needs are assessed in quarters. While manufacturers strive for commercial value, researchers pay close attention to publication influence. These aren't contradictory goals, but bridging them requires purposeful institutional design.
Clear problem descriptions driven by industry and market needs, cooperative intellectual property arrangements that match incentives, time-bound & cost-economised development processes, and regular knowledge exchange that fosters confidence between academic and industrial teams define the most effective partnerships I have seen. These alliances exist because they understand that innovation is about continuous engagement rather than mere technology transfer.
Digital transformational technology adoption
By 2021, Indian manufacturers spent nearly $6 billion on Industry 4.0 technologies, 40 per cent from the automotive sector alone. Yet, only 35 per cent of firms are beyond pilot-stage adoption.
This lag is both a challenge and an opportunity. Technologies like AI-based quality control, predictive maintenance, humancentric robotics, and flexible robotics are becoming the norm worldwide. Academia-industry collaborations can catalyse meaningful adoption, offering both foundational science and implementation frameworks tailored to Indian conditions.
Sector-specific possibilities
The pharma sector is a good example of how academia-industry cooperation could propel innovation. Strong research capacity that can be replicated across other sectors is highlighted by the pharma companies that are leading in R&D intensity and PhD employee proportion.
Particularly good prospects are found in electronics manufacturing. Driven by PLI initiatives and global interest in Indian manufacturing. India's mobile phone exports have topped Rs 1.29 trillion since 2014. This growth path generates demand for advanced manufacturing capacity that methodical academic-industry collaborations can supply.
The major investments made by the automobile sector in Industry 4.0 technology show their readiness to embrace modern manufacturing methods. Smaller suppliers in the automotive industry need methodical guidance to obtain similar skills via joint development initiatives.
Creating ecological collaborations
What does it take to build robust academia-industry linkages?
Clearly defined frameworks & aligned incentives: Move beyond traditional research funding models. Establish collaborative structures with shared objectives and incentives—such as equity participation or revenue sharing—so that academic institutions have a vested interest in commercial success.
Bridging cultural gaps: Facilitate open communication between academia and industry to align differing work styles. Set realistic timelines that balance R&D depth with business urgency, and define shared metrics for success.
Structured talent development: Prioritise human capital exchange. Encourage researchers to spend time in industrial settings and engineers to engage with academic research. These immersive experiences often yield more long-term value than immediate technology transfers.
Policy framework and execution
India's governmental environment is progressing to encourage closer academic-industry ties. An essential first step towards methodical research-to-market translation is the Anusandhan National Research Foundation. But effective implementation will depend on proactively addressing key factors that can enhance the value and impact of such partnerships.
Important interventions required are standardising intellectual property agreements, simplifying technology transfer procedures, and building outcome-linked incentives rewarding group innovation instead of mere expenditure on research. Furthermore, under consideration by the government should be catalytic procurement strategies generating early-stage demand for research-based technologies.
The human component
The heart of any collaboration is people. Trust, mutual respect, and shared vision matter more than MOUs. The most transformative partnerships are anchored in personal connections between professors and founders, between lab researchers and factory floor engineers.
For this reason, programmes for talent exchange are quite worthwhile. Six months in a factory can teach a PhD student what no paper can. Similarly, engineers exposed to cutting-edge labs often return with reimagined possibilities.
Looking ahead
India's industrial sector has exhibited tremendous resilience and appetite for growth. There have been constructive indicators to show that India is ready to take its position globally, not just positive PMI, or the success of PLI schemes, or increased Industry 4.0 adoption. Now it isn’t just about ambition; it’s about the “institutional will” to create systematic, long-term linkages between our manufacturing strength and our research & development excellence.
We should be realistic; the change we seek is not going to take place overnight. Establishing a globally competitive innovation ecosystem requires more than policy; it requires long-term vision, a close alignment with the culture that is most likely to take up that vision, and patient, risk-tolerant capital. But we have a strong foundation in place - world-class institutions, a robust industrial base, increasing domestic demand, and increasing technology adoption.
The question is not whether India can become a global manufacturing giant, but are we ready to seize the moment to reimagine how science and industry engage with each other. Some effective models exist elsewhere in the world, and there is excitement to accelerate progress at home. The important step now is to engage in strategic, consistent collaboration.
Because the most transformative innovations are not created in a lab or factory, they arise where scientific curiosity meets industry. And that is the landscape where India's true potential lies.
The future of Indian manufacturing is not restricted to emerge from one sector alone; it will be co-created across disciplines, institutions, and the nation. The question is - are we ready to create it, together?
About the author:
Yogesh Pandit, Director of Product Acceleration at Foundation for Science Innovation and Development (FSID) at Indian Institute of Science (IISc), Bangalore, lead Pravriddhi – a national-scale product accelerator launched by FSID. Pravriddhi is designed to transform India’s entire manufacturing ecosystem through innovation-driven product development. Pandit brings extensive experience in bridging the gap between cutting-edge research and market-ready solutions. He’s creating an ecosystem where MSMEs can go from labs to launchpads.
Academia-industry collaboration
Indian manufacturing sector
Yogesh Pandit
FSID
IISc
manufacturing clusters
Tamil Nadu
Karnataka
PLI Scheme
precision components
Coimbatore
World Economic Forum
Global Manufacturing Index
Fraunhofer Society
Germany
Indian Institute of Science
Foundation for Science Innovation and Development
Pravriddhi
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