'Made in India’ must give way to ‘Imagined in India’: FM Sitharaman bats for design, patents and innovation

Finance Minister Nirmala Sitharaman on Tuesday called on Indian industry to look beyond expanding the size of businesses and instead focus on building enterprises that are innovative, resilient, well-governed and capable of competing globally.

Speaking at an event organised by the All India Management Association (AIMA), Sitharaman said India’s growth ambitions would require companies to strengthen their capabilities in areas such as technology, design, research and development, while also improving governance and institutional practices.

Sitharaman said India’s next phase of growth should be driven by greater investment in research and development and the creation of intellectual property within the country.

"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," she said.

She urged companies to increase spending on R&D either through their own facilities or by working with academic institutions. Such investment, she said, would help improve existing products, encourage innovation and lead to the creation of more intellectual property in India.

India’s Gross Expenditure on R&D currently stands at 0.83% of GDP, compared with an OECD average of 2.7%, 2.6% in China and 3.5% in the US, Sitharaman said.

She also pointed to the relatively low contribution of the private sector to R&D in India. The domestic private sector accounts for 36% of R&D spending, compared with more than 70% in leading advanced economies, she said.

‘Scale’ must be matched by stronger institutions

The finance minister said Indian businesses need to combine their growing scale with better quality, stronger governance and greater technological capabilities as the country works towards the Viksit Bharat 2047 goal.

"India today has the scale of market, the entrepreneurial energy and the institutional capacity to aim much higher. Execution will determine how successfully we convert these strengths into lasting national capability," she said.

According to Sitharaman, the contribution of Indian management will ultimately be reflected in the quality of enterprises and institutions being built today.

She said companies should not focus solely on becoming larger, but should also work towards being more competitive, innovative, trusted and resilient enough to support India's growth over the coming decades.

Sitharaman stresses corporate governance, industry-government engagement

Sitharaman said corporate governance should not be viewed merely as a collection of external rules, arguing that companies must also establish strong internal standards.

She said trust between businesses needs to be built through consistent conduct rather than simply expected from the other side.

"Businesses must engage constructively with government and regulators. Legal recourse will always remain available, but every disagreement need not begin as litigation. There is considerable value in engaging early, placing evidence on the table, participating seriously in consultations and working towards solutions before differences become disputes," she said.

Businesses, she added, should also offer greater transparency and predictability and remain open to listening. A mature economy, she said, should allow disagreements without every difference turning adversarial.

Focus on management skills and family businesses

Sitharaman also highlighted the need to strengthen management capabilities across Indian companies.

She called for management education and short, practical programmes for founders and early-stage employees covering areas such as hiring, delegation, financial discipline, customer management, compliance and the creation of organisational systems.

Family-run businesses, she said, would also benefit from practical programmes focused on succession planning, governance, professionalisation, conflict management and delegation.

The finance minister also cautioned companies against designing their products and strategies only for affluent urban consumers.