'Indian firms spend less than 1% of their net profit on R&D'

Indian companies' investment on research and development amounts to less than 1 per cent of their annual profits, as per a survey by industry chamber Assocham.

"About 45 per cent of companies operating in sectors like automobiles, pharmaceuticals and software said that they spend less than 1 per cent of their annual net profit on research and development," the survey said.

The chamber did not mention number of companies covered under the survey.

The study said R&D spending by Indian firms continues to be dismally low, compared to their global competitors.

However, the survey found out that about 27 per cent of private firms have started improving R&D spending to accelerate new product development and innovation, which will help enhance their competitiveness in the global arena.

To encourage companies to set up more such centres and expand existing ones, Assocham said the government should formulate policies that will incentivise these firms to ramp up their R&D activities.