'Ghar ke sher, global zero': Raghuram Rajan asks why India copies well but fails to lead in innovation like TikTok or Porsche
Raghuram Rajan
says that without becoming a
global innovation
leader, this achievement may hold little value. In a column published in ToI, Rajan, now a professor at the University of Chicago, argued that India has failed to create globally recognized product leaders, despite the size of its domestic market and extensive state support for businesses. He says India's corporate landscape is dominated by domestic giants who remain weak players on the global stage.
No global product icons from India
Rajan points out that India does not have a single company known worldwide for its products. 'We do not have one company that is known across the world for its products,' he writes. 'No Nintendo, Sony or Toyota. No Mercedes, Porsche or SAP.' He notes that even though India protects its car market with high tariffs, 'not one Indian car model has been sold in large quantities in the developed world.'
India's auto exports, Rajan observes, are limited to niche, price-sensitive regions. In contrast, countries like China have become global leaders in electric vehicles, batteries, and autonomous driving systems.
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Riskless capitalism and state protection
According to Rajan, India's national champions operate in a system of 'riskless capitalism,' where state policies protect them from market pressures. 'Place a tariff on them,' he writes of foreign competitors, 'no matter how many Indian firms use imports as inputs.' He adds, 'If foreign direct investors like Walmart pose a threat, place regulatory restrictions on them' or initiate antitrust actions.
Rajan argues that this protection discourages companies from innovating or competing globally. 'As the domestic market grows larger, the problem gets worse,' he warns. 'Why innovate or go global,' he asks, 'when steady imitation is enough to keep domestic consumers satisfied?'
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Pharma and IT sectors also lag behind
Rajan says that even sectors with international reach, such as pharmaceuticals and software, have underperformed in innovation. Indian pharmaceutical firms have focused on generic drugs but not on developing original formulations. The software sector, which grew during the Y2K period, has yet to create globally dominant digital products.
'Where is the Indian TikTok, DeepSeek, ChatGPT, or even Fortnite?' Rajan writes. 'We have domestic versions of some of these, but they have no global footprint because they are largely imitative.'
Innovation held back by weak research ecosystem
Rajan identifies limited university research and weak commercialisation channels as major bottlenecks. He acknowledges that the newly launched Anusandhan National Research Foundation is a good step but says its resources 'need to be multiplied manifold.'
He says a more competitive domestic environment is essential. Reducing import tariffs, increasing foreign direct investment, and limiting monopolies could drive businesses to pursue innovation. He also calls for more research funding and fewer bureaucratic obstacles in higher education.
Innovation as a national security concern
Rajan stresses that innovation is not only tied to economic growth but also to national defense. 'As Ukraine demonstrates... we will need better, smarter equipment and tactics,' he writes. Rajan warns that without a shift toward innovation, India may fall short in both economic and strategic strength.
Call for a long-term innovation agenda
'If we are to grow rich as a nation before we grow old, we must increase GDP growth by innovating more,' Rajan writes. He concludes that becoming the world's third-largest economy is not enough. 'We must become one of the most innovative countries... As a collateral benefit, our firms will become household names globally.'
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