Over the past decade, India has focused on structural reforms like the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code to formalize its economy, while developed economies such as the United States, Taiwan, and South Korea poured capital into AI and semiconductors. This divergence has sparked debate on whether India’s compliance-first approach has cost it global innovation leadership. Global investment is currently skewed toward markets with direct exposure to the AI and semiconductor boom, favoring hardware and advanced tech ecosystems over software services. India’s Gross Expenditure on Research and Development (GERD) stood at approximately 0.64% of GDP in the 2020-21 period, compared to South Korea’s over 5%, the United States’ over 3%, and China’s over 2.5%. Manoranjan Sharma, Chief Economist at Infomerics Ratings, noted that India’s push for compliance has not been matched by similar intensity in patent approvals or applied research. However, Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, argues that global capital is driven by earnings potential, and investors are chasing extraordinary profit growth in AI and chip-making sectors of Taiwan, South Korea, and the US, rather than rejecting India’s economic framework.