‘Where is Indian TikTok, ChatGPT?’: Raghuram Rajan warns country can’t grow rich imitating

India may be on the cusp of overtaking Japan and Germany to become the world’s third-largest economy, but that milestone rings hollow without global innovation leadership, argues former RBI governor Raghuram Rajan. 

In a column for The Times of India, the University of Chicago professor laid bare the country’s glaring failure to create global product icons, despite massive domestic scale and state support.

“We do not have one company that is known across the world for its products,” Rajan writes. “No Nintendo, Sony or Toyota. No Mercedes, Porsche or SAP.” Even with a vast car market protected by high tariffs, “not one Indian car model has been sold in large quantities in the developed world,” he notes. 

Instead, India’s auto exports are confined to niche, price-sensitive markets.

Rajan says India’s domestic champions—giants at home, minnows abroad—are trapped in what he calls “riskless capitalism,” shielded from competition and innovation by state protection. “Place a tariff on them,” he writes of foreign competitors, “no matter how many Indian firms use imports as inputs.” If foreign direct investors like Walmart pose a threat, “place regulatory restrictions on them” or initiate antitrust actions to weaken their ability to compete.

“Inward focus” is both a symptom and a trap, Rajan argues. “As the domestic market grows larger, the problem gets worse,” he warns. Why innovate or go global, he asks, “when steady imitation is enough to keep domestic consumers satisfied?”

Rajan points out that Indian pharmaceutical firms, despite their global presence, have failed to transition from generics to original formulations. Similarly, the software sector that scaled up during Y2K has yet to deliver a single globally dominant product. 

“Where is the Indian TikTok, DeepSeek, ChatGPT, or even Fortnite?” he asks. “We have domestic versions of some of these, but they have no global footprint because they are largely imitative.”

He sees weak university research and poor commercialisation pipelines as core issues. Though he acknowledges the Anusandhan National Research Foundation as a step forward, Rajan says its resources “need to be multiplied manifold.”

Rajan doesn’t mince words on the stakes. “If we are to grow rich as a nation before we grow old, we must increase GDP growth by innovating more.” Innovation, he argues, is also critical to national defense. “As Ukraine demonstrates… we will need better, smarter equipment and tactics.”

His conclusion is blunt: “We cannot be content with becoming the third largest economy in the world. We must become one of the most innovative countries… As a collateral benefit, our firms will become household names globally.”