Finance Minister Nirmala Sitharaman addressed the Indian industry at the 53rd National Management Convention of the All India Management Association in New Delhi, emphasizing the need to build stronger, more resilient, and better-governed enterprises as the country works towards the goal of Viksit Bharat by 2047. According to reports from Business Standard and Rediff Moneynews, Sitharaman stated that Indian industry needs to build institutions that combine scale with durability, higher quality, better governance and deeper technological capabilities. She noted that India today has the scale of market, the entrepreneurial energy and the institutional capacity to aim much higher, with execution being the key factor in converting these strengths into lasting national capability. The minister emphasized that the contribution of Indian management would be measured by the quality of enterprises and institutions being built today as the country moves toward Viksit Bharat by 2047, stating that "Let us therefore build not only bigger companies but better companies, competitive, innovative, trusted, and resilient enough to lead India through the decades ahead of us."
Emphasizing that quality would need to become India's next national movement, Sitharaman stressed that "India's next phase of growth must be built on quality. Every factory door, boardroom, service centre, R&D team, and so on must aim for higher standards, fewer defects, and greater reliability." According to Business Standard and Rediff Moneynews, she noted that "The other thread is the standard we hold ourselves to, quality, which must become India's next national movement." The minister highlighted that "The challenge is often not entrepreneurship, but institutionalisation," calling for professionalisation, separation of ownership from management, succession planning and resolution of conflicts before they affect the business. She specifically addressed the need for "stronger governance in family-owned businesses, particularly micro, small and medium enterprises (MSMEs) and mid-sized companies," noting that "A large share of India's MSMEs and mid-sized enterprises are family-owned. Many have strong products, loyal customers and significant growth potential. But expansion can be held back by unclear roles, succession disputes, informal decision making and disagreements within family."
Highlighting that India's next phase of growth must be built on quality, Sitharaman stressed that corporates need to spend more on R&D, either in-house or through collaboration with academia. According to Business Standard and Rediff Moneynews, this will help in driving innovation and improving existing products, with higher R&D expenditure translating into more intellectual property being created in and from India. She noted that India's Gross Expenditure on R&D stands at 0.83 per cent of GDP, far below the OECD average (2.7 per cent), China (2.6 per cent), and the US (3.5 per cent). The minister emphasized that "Our ambition must move from 'Made in India' to 'Imagined in India' products" - not only manufactured here, but conceived, designed and technologically developed here, and then taken to markets across the world. "Manufacturing scale was important but Indian companies needed to capture more value through design, engineering, patents, software, technology and know-how," she said. "India's Gross Expenditure on R&D reflects a persistent shortfall in private-sector R&D depth, where the domestic private sector contributes just 36 per cent compared to over 70 per cent in leading advanced economies."
Despite the reforms, Indian companies have struggled to significantly ramp up R&D spending compared to global competitors. According to Business Standard, cumulative spending on R&D was just $7.2 billion in FY26, against $61 billion spent by Alphabet alone in 2025. Among the top 10 companies in terms of R&D spending, there were four pharma companies, three automakers and two defence equipment makers, apart from Reliance Industries. In all, just 471 out of 1,450 non-BFSI companies reported R&D spending in FY26, but only half of those firms spent 1 per cent or more of their net sales on R&D. The top listed companies invested around ₹63,500 crore on R&D in FY26, up 28.6 per cent year-on-year from ₹49,410 crore, with the total R&D spending representing 0.91 per cent of companies' combined net sales, up from 0.76 per cent the previous year. However, this remained lower than the historic high of 1.15 per cent in FY17. The data shows R&D spending has seen a compound annual growth rate (CAGR) of 16.8 per cent over the past 27 years, faster than the 12.9 per cent CAGR in combined net sales.
The corporate R&D landscape in India is dominated by specific sectors, with nearly 60 per cent of firms that reported any R&D spending in FY26 belonging to five sectors: automotive, pharma, chemicals, IT services, and defence and PSUs. According to Business Standard, Mahindra & Mahindra was the biggest spender on R&D in the corporate sector in FY26, pumping in ₹5,691.4 crore, representing an 81.1 per cent increase year-on-year and amounting to 3.9 per cent of the company's standalone net sales. Reliance Industries was the second biggest spender at ₹4,682 crore in FY26, up 0.9 per cent year-on-year, equivalent to just 0.9 per cent of RIL's standalone net sales. Tata Motors Passenger Vehicles was third at ₹2,836 crore in FY26 on a standalone basis, up 35.8 per cent year-on-year, spending 4.9 per cent of its net sales. The pharma industry is most R&D-intensive, with listed pharma companies spending 6.2 per cent of their net sales on R&D in FY26, while the IT services sector lags significantly at just 0.58 per cent of total net sales.
Despite these efforts, Indian companies remain significantly behind global peers in innovation metrics. According to the United Nations World Intellectual Property Organization (WIPO) database of 2024, TVS Motors filed the highest number of patents among Indian companies at 283 during the three-year period of 2022-24, followed by Jio Platforms at 202 and UPL Ltd at 63. In comparison, Huawei Technologies topped the global list with 20,783 patents filed, followed by Samsung Electronics at 12,951 patents and Qualcomm Inc at 11,113. The overall R&D budget of Indian companies remains small compared to global majors. According to the Organisation for Economic Co-operation and Development (OECD) database, global corporate R&D spending is dominated by multinationals from the United States, Europe, Japan and China, with Alphabet Inc topping the chart with R&D spending of $61 billion in 2025, followed by Meta at $57 billion and Amazon at $55 billion. In China, Huawei topped the list as it spent $25 billion on R&D in 2024.
