Indian consumer companies are increasingly highlighting innovation, technology and localisation as important growth drivers, but their spending on research and development (R&D) remains relatively low.
An Economic Times analysis of 20 large companies across the FMCG, automobile and electronics sectors found that average R&D spending increased to 0.9% of sales in FY2025-26, from 0.5% five years earlier. Much of the increase came from automobile and electronics companies.
ITC, Britannia and Tata Consumer Show Limited Growth
Several major consumer companies have maintained relatively modest R&D budgets.
ITC’s R&D expenditure declined to around 0.2% of sales in FY26, compared with 0.3% in FY21, despite spending ₹213 crore during the latest fiscal year.
Britannia’s R&D spending remained around 0.26–0.27% of sales, while Tata Consumer Products stayed at roughly 0.25%. Asian Paints also remained at around 0.4% during the period.
The figures indicate that higher emphasis on innovation does not necessarily translate into a comparable increase in R&D expenditure.
Electronics Companies Show a Wider Gap
The difference is particularly visible in consumer electronics.
Samsung Electronics India spent about ₹37 crore on R&D in FY26, against sales of approximately ₹1.12 lakh crore. LG Electronics India spent ₹125 crore against revenue of ₹24,605 crore, while Hyundai Motor India reported R&D expenditure of ₹68 crore against sales of ₹68,990 crore.
One reason is that global companies often conduct core product development at their overseas parent companies. Indian subsidiaries may focus more heavily on localisation, manufacturing and software-related activities.
India Wants to Move Beyond Manufacturing
Industry executives argue that stronger domestic R&D will be necessary if India is to move from being primarily a manufacturing base towards developing products, technologies and intellectual property.
Dixon Technologies Executive Chairman Sunil Vachani said R&D spending needs to increase as India’s exports expand and the country moves towards becoming a products-oriented economy.
A recent BCG-CII report cited by ET also found that India’s leading listed consumer-durables companies invest less than 1% of revenue in R&D, compared with roughly 1–4% among global peers.
Government Creates R&D Funding Push
The government is attempting to address the broader funding gap through a ₹1 lakh crore Research, Development and Innovation Fund, designed to encourage private-sector R&D and deep-tech development.
India has also set an objective of increasing overall national R&D expenditure to more than 1% of GDP, compared with around 0.65% currently.
The challenge for consumer companies will be translating higher investment into locally developed products, intellectual property and technologies while managing rising costs and competitive pressures.
