India's soaring innovation stock

Changes to IP laws have yielded results, leading to an improvement in India's ranking in the innovation index

India has emerged as a key player in the dynamic landscape of intellectual property rights (IPR) globally, showcasing a remarkable growth trajectory. Over the last nine years, there has been a substantial increase in patent filings and industrial design registrations, with a compound annual growth rate of 60 per cent through the end of 2022. This is reflected in India’s growth in the global innovation index, which has moved from the 83rd to the 40th position.

India’s global patent position

The surge in global patent applications reflects the increasing recognition of the value of safeguarding IP creations. In the current decade (2014-23), India has filed 4,65,000 patents, marking a 44 per cent increase from the preceding decade (2004-13). The average daily patent filing has risen from 89 patents per day in the preceding decade to 127 patents per day in the current decade. In 2023, 247 patent applications were filed daily. The growth is equally contributed by the startup ecosystem and a prolific base of small and medium-sized enterprises and individual inventors. The country has been proactive in revamping the IP ecosystem by strengthening the patent framework to encourage innovation crucial in today’s knowledge-driven economy.

India’s patent power: Surging ahead

India was steadily growing at an average of 5.4 per cent until 2021, making notable progress in the global IP landscape. In 2022, India secured the sixth position globally in the number of patents filed, showcasing an impressive growth rate of 25.2 per cent compared to the previous year. A total of 90,300 patents were filed in 2023, marking a 17 per cent increase from the previous year (2022). Indian residents have witnessed a substantial 98 per cent growth in patents over the nine years leading up to 2022. Non-residents have also witnessed a doubling of patent growth in India, taking advantage of an efficient IP regime. Nearly 32 per cent of the patents filed in India are now by Indian residents, a jump from around 20 per cent before 2014. In terms of patent applications by domestic applicants per $100 billion gross domestic product (GDP), India is quickly ramping up patent protection with a decadal growth rate of 110 per cent in 2022, compared to 56.9 per cent in 2014. The growth demonstrates that India has now surpassed patent filing rates in Canada, Australia, France and Germany.

Streamlined patent process drives innovation

The government’s persistent efforts to strengthen the IP regime have resulted in a drastic reduction in the average pendency for patent examination from 2,160 days in 2016 (the highest among major countries) to 120 days in 2022, making it the fastest among major countries in the majority subject speciality from the date of examination request filed with the IP office.  Similarly, in the overall disposal of patent applications, India has shown remarkable growth, crossing 75,000 patents on the eve of the 75th Republic Day. The revamp in IP administration reflects the enhanced capabilities and efficiency of the Indian patent office and represents a broader commitment to fostering an IP-friendly environment.

Technology boost for Make in India

Indian innovators are strategically focussed on potentially shaping the country’s economic and scientific trajectory. The IP surge in technology-driven development from 2014-23 reflects that mechanical and chemical sciences-related inventions have been promising sectors of patent protection for decades, comprising 20 per cent and 16 per cent, respectively. Information technology, electronics, electrical, communication, physics, biotechnology, polymer, civil, and metallurgy are emerging as the next sectors for IP creation and innovation in India. India is witnessing a mass-scale adoption of an IP-led innovation culture. While analysing the growth of IP in the last nine years in different states, Uttar Pradesh is remarkably emerging as a leader in innovation.
 

In contrast, Gujarat has maintained its share across the decade. The next big leap in the IP regime is expected from Telangana, Punjab, and Haryana, and Rajasthan.

Leveraging IP for economic growth

The contemporary business landscape recognises IP as a critical growth engine for companies to monetise their innovations and solidify their business. The Securities and Exchange Board of India may consider  facilitating voluntary disclosure of IP assets or changes in the company’s IP portfolio to be reported to the stock exchanges. The time has come to provide a platform for IP commercialisation and catalyse the impact of strategic patent grants to offer benefits to investors or attract funds from the market, enabling market participants to understand the impact of patent grants or the creation of IP assets on a company’s valuation.

The growth in IP can be attributed to various factors, including government initiatives to promote innovation through programmes such as the Atal Innovation Mission, as well as initiatives from the Department of Science and Technology and the Department of Biotechnology in nurturing incubation support for an efficient startup ecosystem; and strengthening of intellectual property laws by bringing in amendments to existing rules. Nine of the 14 amendments were adopted during 2014-23. As proposed, the patent rules amendment of 2024 is poised to bring about a significant change to further facilitate IP creation and protection in India. All these efforts have positioned India as a leading IP nation in the global innovation space.

India’s remarkable achievements in patent filings, examination efficiency, and innovation diversification across sectors and regions highlight its evolving stature in the global IPR landscape. The focus must now shift towards sustaining these trends and leveraging the potential of India’s rich talent pool and institutional capabilities to cement its position as a leader in the global innovation ecosystem.

The writers are, respectively, group chief economic advisor, State Bank of India, and controller general  of  patents,  designs and trademarks, Ministry of Commerce and Industry, Government of India. The views are personal