·       Procurement is often perceived as a mundane administrative task primarily focused on ensuring transparency and controlling costs. However, when it comes to research and development (R&D), procurement takes on a much more critical role—it can determine whether scientific concepts evolve into tangible breakthroughs. Policies that emphasize rigid controls tend to stifle innovation, while those that strike a balance between accountability and creativity have the potential to accelerate technological advancement. India’s recent reforms to its General Financial Rules (GFR), which relax certain restrictions on R&D procurement, present a valuable opportunity to reposition procurement as a facilitator of scientific ambition rather than an impediment to it.

·       The tension between cost efficiency and innovation within procurement processes is longstanding. While frameworks designed to prevent fraud are essential for safeguarding public funds, they can inadvertently suffocate research by prioritizing procedural compliance over scientific requirements. This was clearly evident in India’s pre-reform procurement system, where researchers were required to purchase equipment exclusively through the Government e-Marketplace (GeM). Unfortunately, GeM often lacked the specialized instruments necessary for cutting-edge research, forcing scientists to endure lengthy exemption procedures and frequently settle for subpar materials that compromised their work. Yet, procurement can be reimagined as a powerful catalyst for innovation. Studies have shown that well-targeted public procurement stimulates private-sector R&D investment and drives patent generation, creating a virtuous cycle of technological progress. However, Brazil’s experience serves as a cautionary tale, illustrating that generic procurement rules—unless explicitly designed to foster innovation—rarely deliver transformative outcomes.

·       In June 2025, the Government of India introduced reforms addressing many of these long-standing challenges. By empowering institutional heads to bypass the GeM platform when procuring specialized equipment and increasing the direct purchase threshold from ₹1 lakh to ₹2 lakh, the reforms acknowledge that a one-size-fits-all approach to procurement cannot meet the unique demands of research. Additionally, delegating authority to vice-chancellors and directors to approve global tenders up to ₹200 crore reduces bureaucratic delays, a persistent complaint among policymakers and scientists. These reforms embody the concept of catalytic procurement, wherein flexibility allows public institutions to act as early adopters of advanced technologies, spurring further innovation.

·       To fully grasp the significance of India’s reforms, it is helpful to view them within the broader context of global procurement strategies. Germany’s High-Tech Strategy institutionalizes innovation-oriented procurement through KOINNO, an agency that curates supplier databases and encourages cross-sector collaboration. Similarly, the United States’ Small Business Innovation Research (SBIR) program utilizes procurement contracts to de-risk early-stage technologies while maintaining competitive vendor participation. South Korea’s pre-commercial procurement model even offers premium payments for prototypes that meet ambitious technological objectives. These international examples illustrate what economist Mariana Mazzucato calls mission-oriented procurement—the deliberate use of government purchasing power to shape and steer technological markets.

·       Discussions about procurement reforms often veer toward calls for privatizing national laboratories, under the belief that corporate-style agility could overcome bureaucratic inefficiencies. However, this debate risks presenting a false choice. The U.S. experience with Sandia National Laboratories shows that hybrid models are viable: while management was transferred to a private company, government oversight remained robust, resulting in a surge of patents and partnerships with industry. India’s Council of Scientific and Industrial Research (CSIR) could similarly benefit from such a hybrid approach, especially in strategic and high-cost fields like quantum computing. However, this would require strong accountability frameworks and clear alignment with national innovation goals. Without performance-linked funding and competitive incentives, privatization alone may lead to inefficiencies rather than solve them.

The Way Forward: Toward a New Procurement Paradigm

While India’s current reforms are necessary, they are insufficient on their own. Several systemic interventions are needed to drive more profound change. Firstly, tender evaluations should be outcome-weighted, considering not just cost but also innovation potential and scalability, similar to practices in Finland. Secondly, elite institutions should be granted sandbox exemptions, freeing them from rigid procurement constraints if they meet independently audited innovation benchmarks. Thirdly, India should leverage AI-augmented sourcing tools, utilizing resources from the INDIAai ecosystem to anticipate delays and monitor global markets in real time. Finally, co-procurement alliances—modeled on the European Union’s Joint Procurement Agreement—could pool demand across Indian research institutions for expensive equipment, enabling economies of scale.

Conclusion

Procurement should not be regarded as a peripheral bureaucratic task; it is a central variable in the research ecosystem. India’s recent reforms to the GeM platform represent an important step toward this recognition, but they remain cautious and incremental rather than transformative. By adopting global best practices in mission-oriented procurement, integrating AI-driven tools, and experimenting with hybrid governance models, India has the potential to transform procurement into a powerful catalyst for scientific discovery and innovation.