Too Many Cooks in India’s Innovation Kitchen

Every few years, India produces a policy triumph the world studies closely. UPI is the latest: a payments rail built at home that now processes more transactions than the payment systems of most G7 nations combined, and one that foreign governments are actively trying to license or replicate. Yet the institutional machinery that could turn a lucky breakthrough into a repeatable pattern still doesn’t exist.

Israel offers a useful counterpoint. A country of under 10 million people, with none of India’s market scale, punches so far above its weight in deep tech that “Startup Nation” has become shorthand for a whole approach to innovation policy.

The engine behind it is the Israel Innovation Authority, a single statutory, arm’s-length body that funds R&D through conditional grants that are recoverable rather than gifted and often cover up to 85% of early-stage budgets, forces private capital to co-invest, and organises the whole ecosystem around solving specific bottlenecks rather than dispensing generic subsidies.

India’s problem is not a shortage of programmes. It’s a surplus of disconnected ones. 

NITI Aayog’s Atal Innovation Mission runs Atal Tinkering Labs. MeitY’s Startup Hub scales deep-tech ventures. Tamil Nadu’s TANII funds public innovation challenges. Karnataka has its own Innovation Authority experimenting with regulatory sandboxes. Each does useful work in isolation. None of them works with the others in any structured way, and none carries the mandate or capital to turn a state-level win into a national product, let alone a global one. The result is a familiar Indian pattern: real capability, diluted by fragmentation.

Three design features of Israel are worth studying closely because they are not accidents; they are the mechanism.

First, a single shared national strategy. Every grant, every consortium, every incubator programme sits under one coherent vision focused on a short list of frontier priorities: AI, space research, finance, EV batteries, solar, nuclear energy, cybersecurity, bio-convergence and other areas of national importance. This isn’t bureaucratic tidiness for its own sake; it means capital and talent converge on the same problems instead of 40 agencies trying to solve 40 different versions of the same challenge.

Second, problem-first consortia. The IIA does not merely fund companies; it convenes academia, industry and government around specific bottlenecks, then lets solutions emerge and be exported. This is the difference between a subsidy scheme and an industrial strategy.

Third, genuine operational independence. As a statutory body with specialised divisions and delegated authority, the IIA can approve grants and open regulatory sandboxes at a speed no line ministry can match. Agility, not just funding, is the scarce resource.

Homegrown Authority
India should build its own version. 

Call it a National Innovation Authority, structured as a public-private partnership with real statutory independence rather than as another coordinating committee. It should consolidate the fragmented pieces: AIM’s startup networks, the newly minted RDI Fund, the DPIIT Seed Fund and FFS, MeitY’s technical scaling capacity, and a formal channel for state bodies like TANII and Karnataka’s Innovation Authority to feed into it rather than compete with it. It should begin with an annual corpus of ₹100 billion–$200 billion, disbursed as repayable grants matched by private capital, thereby imposing the market discipline that pure subsidies lack.

Its first mandate should be narrow and obvious: AI for the common man. Private AI players can change or control access at will. AI has to become a tool in the hands of the common man, as ubiquitous as the mobile phone and democratised in much the same way. It must be used to improve education, healthcare and agriculture, for a start. The solution lies in SLMs, which address exactly the kind of bottleneck the IIA model is built to tackle and offer solutions that can be exported not only to the Global South, where India already has credibility, but increasingly to mature economies looking for cheaper, more resilient rails than their own legacy systems.

There’s also a diplomatic dividend here. Israel’s international division runs bilateral R&D partnerships with more than 80 countries, turning innovation policy into a tool of soft power and market access simultaneously. India, with its Viksit Bharat 2047 ambitions and its stated intent to be a “Vishwaguru” (a knowledge leader for the world), has arguably more raw material to work with than Israel did when it started. What’s missing is the institutional spine.

Centralisation Risks
Sceptics will point out that India has tried centralisation before, and that consolidating fragmented agencies often just creates a bigger, slower one. That risk is real, and it is precisely why statutory independence and speed of approval, not just the scale of funding, must be designed in from day one, not bolted on later. A National Innovation Authority that behaves like a conventional ministry will fail exactly as conventional ministries do. One that behaves like the IIA by remaining lean and mission-focused, and by allowing private capital, industry leaders and mentors to help decide what gets funded, has a real shot at turning India’s DPI advantage into a durable export industry rather than a one-time success story enabled by a billion Indians.

The country’s 600 million young people are not merely beneficiaries of innovation policy; they are its largest untapped source of innovation. They are building solutions for education, healthcare, agriculture, finance and public services, often with fewer resources and greater proximity to the problems than the institutions designed to solve them. They should not have to spend years learning how to navigate the system before the system takes their ideas seriously. 

A proof of concept should be the beginning of government support, not the end of a founder’s struggle. A National Innovation Authority could make that principle operational: find the bottleneck, back the best solution, bring in private capital, test it in the real world and help it scale across India and beyond.

The question is no longer whether India has the talent to innovate. It is whether India has the imagination to build a system worthy of that talent.