Purpose
– The purpose of the present study is to assess India's potential as a lead market for cost‐effective frugal innovations. This is of special interest since lead markets have traditionally existed in economically highly developed countries, whereas developing countries have faced negative country‐of‐origin effects. In the case of India a reversal of this trend may be observed, for some time. The paper aims to identify factors which are impacting India's emerging role as a fountainhead of frugal innovations. The research will have implications for locational decisions in setting up global innovation/ research and development (R&D) activities.
Design/methodology/approach
– The study crystallizes the inherent characteristics of frugal innovations, their development process and market success in the domestic and overseas markets by undertaking in‐depth analysis of four successful product innovations from India from multiple industries. The obtained results can be treated as critical success factors for frugal innovations. These factors are then incorporated in the “Lead market” model so that propositions about India's potential as a lead market can be formulated.
Findings
– Several endogenous institutions were identified that act as barriers to the diffusion of innovation throughout an organisation. Attempts to re‐design and negate these barriers were also identified.