India Climbs to 38th in Global Innovation Index as Manufacturing and Semiconductor Ecosystem Strengthens: Economic Survey

The Department of Economic Affairs has released the Highlights of the Economic Survey 2025-26.

Released by the Ministry of Finance ahead of the Union Budget, the Economic Survey serves as the government’s principal assessment of the state of affairs of the nation’s economy. The Survey offers an overview of growth trends, fiscal position, sector-based performance markers and prospects.

One of the most reassuring metrics from the Economic Survey 2025-26 highlights a steady strengthening of India’s innovation ecosystem, with the nation climbing to 38th position in the Global Innovation Index (GII) in 2025, climbing up the ranks from its previous position at 66th rank in 2019.

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The growth has been attributed to India’s improving global standing in innovation outcomes, including manufacturing capacity across the tech and semiconductor industries.

Over the last few years, India has amped up its domestic manufacturing capabilities, promoted technology-led production and built a resilient semiconductor ecosystem, growing to rival leaders such as South Korea.

Now ranking at the top among lower-middle-income economies, India is first within the Central and Southern Asia region in the Global Innovation Index rankings.

Cities such as Bengaluru, Delhi and Mumbai have also featured among the world’s top 50 most innovation-intensive clusters, cementing India’s prowess in the research, startups and tech-oriented enterprises.

A key driver behind this improvement has been the expansion of manufacturing under the Production Linked Incentive (PLI) scheme. The Survey notes that the PLI programme, which spans 14 sectors has encouraged major global firms - particularly in the electronics and mobile manufacturing sectors to relocate and expand production in India.

As of September 2025, actual investments exceeding ₹2 lakh crore have been realised under the PLI scheme, resulting in sales amounting to over ₹18.7 lakh crore and the creation of more than 12.6 lakh jobs.

The Survey also highlighted significant progress in the semiconductor sector. As of August 2025, ten semiconductor manufacturing and packaging projects have been approved across six states, with a cumulative investment of around ₹1.60 lakh crore.

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These projects are part of a broader strategy under the India Semiconductor Mission and the Semicon India programme, both of which are aimed at developing an end-to-end domestic semiconductor ecosystem covering fabrication, assembly, testing, marking and packaging.

The creation of intellectual property and entrepreneurship have boosted India’s innovation performance ranking, with the nation coming among the ranks of the top global filers in trademarks, patents and industrial designs, with patent applications nearly doubling between FY20 and FY25.

India’s startup ecosystem is also booming. Since the launch of the Startup India initiative, the number of startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT) have risen sharply to over two lakh in 2025, indicating a growing startup and innovation culture.

To further finance innovation at scale, the government has announced a Research, Development and Innovation (RDI) Fund with an outlay of ₹1 lakh crore over six years, alongside the establishment of the Anusandhan National Research Foundation to facilitate collaboration between industry, academia and government.

The Economic Survey 2026 positions the country for sustained industrial and technology-led growth in the coming years, further developments and policy shifts will be informed during the Union Budget scheduled to take place on the 1st of February, 2026.

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