Welcome new r&d focus at reliance

Welcome new r&d focus at reliance

High time India Inc invested in creating IPR.

That Reliance Industries Ltd (RIL) has become the first Indian company to declare a quarterly profit of over ₹10,000 crore, driven by good performances in retail and media/ telecom besides in refining and petrochemicals, is certainly good news for its investors. But what is perhaps even more noteworthy is the company’s willingness to spend more on research and development. As of now, Tata Motors is the only Indian company to figure in the global major league of R&D spenders. RIL could change the status quo, if the present trend continues, of increasing R&D expenditure and patent filing. This is welcome. We would urge RIL to back broader R&D efforts.

Google, Facebook, Samsung and Microsoft spend large proportions of their revenue on R&D. Companies like Intel and Huawei spend close to a fifth of their revenues on R&D. In comparison, RIL’s R&D spends are puny. But the potential is huge and exciting. In its communication to shareholders, RIL claims to have transitioned from a smart buyer of technology to developer. As of now, this is more aspiration than achievement. But -articulation of that aspiration is significant. And since RIL and its management have a proven track record of executing large projects successfully, it is likely that large R&D projects, once undertaken with seriousness, could lead on to globally significant results. Clean coal technology is one area where India needs mastery, in order to utilise its vast coal reserves without excessive damage to the environment. RIL could expand its carbon capture research to, say, convert carbon dioxide and methane into carbon fibre and hydrogen, useful end-products.

Global giants make liberal use of Indian manpower to carry out R&D. It is high time Indian companies developed the ambition to do likewise. RIL’s new seriousness in R&D is a hopeful sign that Indian companies, too, would realise the value of creating new intellectual property to drive new businesses and greater profits. Not new tax breaks for R&D but the potential for IPRs to generate profits should cement the trend.