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

Finance Minister Nirmala Sitharaman on Tuesday urged Indian industry to look beyond scaling up businesses and instead focus on building businesses that are innovative, resilient, well-managed and able to compete globally.

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

Sitharaman calls for “Imagined in India” products.

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

“Our ambition must shift from ‘Made in India’ products to ‘Imagined in India’ products not only manufactured here but also conceived, designed and technologically developed here and then marketed globally,” she said.

She urged companies to increase spending on research and development either through their own facilities or in collaboration with academic institutions. Such investments, she said, would help improve existing products, encourage innovation and lead to the creation of more intellectual property in India.

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

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

The “benchmark” must match 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 market scale, entrepreneurial energy and institutional capacity to aim much higher. Execution will determine how successfully we transform these strengths into enduring national capabilities,” she said.

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

She said that companies should not only focus on becoming bigger but should also work towards being more competitive, innovative, credible and resilient enough to support India’s growth in the coming decades.

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FM emphasizes corporate governance, industry and government involvement

Sitharaman said that corporate governance should not be viewed only as a set of external rules and argued that companies must also establish strong internal standards.

She said trust between businesses needs to be built through consistent behavior, not simply expected from the other side.

“Businesses need to engage constructively with government and regulators. Legal remedies will always be available, but not every disagreement needs to start with litigation. There is considerable value in getting involved early, putting evidence on the table, engaging in serious consultations and working towards a solution before differences become disputes,” she said.

Businesses, she added, should also offer more transparency and predictability and remain open to listening. A developed economy, she says, should allow for disagreement without every difference becoming hostile.

Focus on management skills and family businesses

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

She called for management education and short hands-on programs for founders and start-up employees covering areas such as hiring, delegation, financial discipline, customer management, compliance and creating organizational systems.

Family businesses would also benefit from hands-on programs focused on succession planning, governance, professionalization, conflict management and delegation, she said.

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