Context: China and the US are increasingly focused on integrating scientific research with industrial production, using Artificial Intelligence (AI) to accelerate the transition from discovery → technology → manufacturing → economic and geopolitical power.
- China is moving upstream from manufacturing to original scientific discovery, while the US is moving downstream from scientific strength to domestic manufacturing.
- The key competition is therefore not merely over AI models or humanoid robots, but over building an ecosystem connecting universities, laboratories, entrepreneurs, finance, energy, factories, supply chains and markets.
China’s Science-Industrial Strategy
- President Xi Jinping’s concept of “new quality productive forces” seeks to shift China’s growth model away from cheap labour, infrastructure and capital accumulation towards innovation-driven growth.
- AI is central to this strategy, with Beijing seeking to integrate it into robotics, machine tools, automobiles, biotechnology, materials, energy, agriculture and scientific research.
- China’s major advantage is its deep manufacturing ecosystem. Having historically absorbed foreign technology and improved it through manufacturing, China now seeks to move from technology adaptation to original discovery.
- China spent around 2.8% of GDP on Research and Development (R&D) in 2025, while basic-research expenditure increased by 11%, reflecting its ambition to become a science superpower.
- The underlying logic is: AI accelerates discovery → discovery produces technology → technology transforms industry → industrial strength generates economic and geopolitical power.
US Strategy: Reconnecting Science with Manufacturing
- The US is approaching the challenge from the opposite direction. Its strengths lie in world-class universities, laboratories, technology companies and capital markets, but it recognises an erosion of its ability to convert discoveries into domestic production.
- The Trump administration’s “Science: A New Golden Age”, released in July, seeks a major reset in US science policy since World War II.
- Globalisation enabled US firms to design and innovate domestically while manufacturing abroad, creating wealth but also dependence on long supply chains.
- The pandemic, China’s rise and intensifying geopolitical competition exposed these vulnerabilities. Washington therefore seeks to reintegrate knowledge production with manufacturing.
- The US and China consequently face opposite vulnerabilities: China fears dependence on American technology, while the US fears dependence on Chinese manufacturing.
The Emerging Science-Industry Competition
- Both countries view AI not merely as a general-purpose technology but as an accelerator of scientific discovery, capable of shortening the distance between research, design and manufacturing.
- The emerging model aims to make scientific discovery continuous with industrial production, allowing faster innovation and potentially transforming economic and geopolitical power.
- China starts with the world’s largest manufacturing base and is moving upstream into science; the US starts with the world’s strongest scientific system and is moving downstream into manufacturing.
- Thus, the decisive factor will be the quality of the science-industry ecosystem, rather than any single AI model or technological product.
India’s Emerging Initiatives
- India recognises the changing technological landscape and has launched missions relating to AI, semiconductor production and quantum technologies, besides preparing a draft robotics policy.
- However, India faces major structural weaknesses in both R&D investment and institutional reform.
Challenge 1: Low R&D Investment and Weak Private-Sector Role
- India’s R&D expenditure remains only 0.64% of GDP, compared with around 2.8% in China and 3.5% in the US.
- The World Intellectual Property Organization (WIPO) estimates India’s R&D spending at about $75 billion in purchasing-power-adjusted terms, compared with $786 billion for China and $782 billion for the US; in nominal-dollar terms, India’s relative position is even weaker.
- India’s ambitions remain concentrated largely in government declarations, while private capital has not developed a comparable long-term project for mastering emerging technologies or strengthening basic research.
- Historically, Indian industry played a major role in building scientific institutions: Jamsetji Tata helped establish the Indian Institute of Science in 1909; the Kirloskars and other business families promoted scientific education; and the Sir Dorabji Tata Trust supported Homi Bhabha in establishing the Tata Institute of Fundamental Research (TIFR).
- TIFR subsequently became an important foundation for India’s atomic energy and space programmes. The article argues that Indian private capital has largely retreated from this tradition.
Challenge 2: Scientific Institutional Reform
- China’s reform era under Deng Xiaoping, beginning in the late 1970s, placed the revitalisation of science and technology at the centre of the Four Modernisations.
- India’s economic reforms began in the 1990s but did not produce a comparable overhaul of its scientific institutions.
- Both India and China benefited from access to American universities, which trained large pools of scientific talent. China complemented this access with massive domestic investment in science and higher education, while also creating incentives for researchers to return.
- India has struggled to attract and retain scientific talent at comparable scale.
- The article argues that the bureaucratisation of India’s science system has been accompanied more recently by cultural nationalism, which risks allowing civilisational pride or mythology to substitute for evidence, experimentation and scientific temper.
Challenge 3: Technological Self-Reliance vs Global Integration
- India’s earlier pursuit of technological “self-reliance” during the 1970s and 1980s sometimes isolated it from global technological advances.
- The renewed emphasis on “technological sovereignty” must avoid repeating this isolation.
- India needs a two-track strategy: deepen cooperation with global science, capital, technology and talent while simultaneously strengthening domestic research, industrial capabilities and scientific institutions.
What India Needs to Do
- Raise R&D investment: Move beyond the present low share of GDP, with greater and sustained public as well as private investment in basic and applied research.
- Mobilise private capital: Encourage Indian industry and philanthropies to take long-term positions in scientific institutions, frontier research and strategic technologies.
- Reform scientific institutions: Reduce excessive bureaucratisation, improve autonomy and accountability, strengthen research incentives and create mechanisms to attract global Indian scientific talent.
- Connect research with industry: Build stronger university–laboratory–startup–industry linkages so that scientific discoveries translate into commercially viable technologies and manufacturing capabilities.
- Combine self-reliance with openness: Pursue strategic technological capabilities without isolating India from international research networks, capital, technology and talent.
- Preserve scientific temper: Technological leadership must be based on evidence, experimentation and innovation rather than claims about past civilisational achievements.
