With the fast pace of change and due to the impact of globalization, the role of the higher education institutions in furthering research and development is becoming important. It is recognized worldwide that investing in higher education is a good thing for the economy and society. Greater investment in universities increases the quality and quantity of highly educated graduates. We are increasingly seeing more investment in university based R&D which increases productivity and the number of highly trained research graduates (PhD’s). Graduates take their experience and knowledge to future employers and become key players in the knowledge society/economy. Universities played a very special role in each country– not as drivers of innovation, as commonly viewed in the West, but as shapers of human capital formation. Every nation considers research and development as the basis for its overall progress. The purpose of this study is to identify the position of India in the global scenario of basic research, to explore the concerns and opportunity of higher education R & D. It also describes how universities perform vital functions both as generators of new knowledge through their leading-edge research activities and as trainers of highly qualified labour.