Statsguru: R&D remains the chink in the armour for India's companies

Rajnath Singh's ₹32,000-crore R&D push boosts defence PSUs, even as overall R&D spend among Nifty 100 firms stays low relative to revenue

Defence Minister Rajnath Singh met with officials of top defence public-sector undertakings (PSUs) on December 10 and announced an investment of about Rs 32,000 crore to strengthen their research and development (R&D) capabilities. This move is significant as defence PSUs already account for nearly 60 per cent of the total R&D expenditure of the 17 PSUs listed in the Nifty 100 index for FY25. However, overall R&D spending across all Nifty 100 companies remains relatively low when measured as a share of revenue.

 

The total R&D expenditure of Nifty 100 firms increased by 57 per cent – from Rs 20,447 crore to Rs 32,087 crore – during FY22-25. Yet, R&D outlay as a proportion of revenue increased only marginally – from 0.3 per cent to 0.7 per cent. 

 

Most of the top six sectors saw a dip in their share in the R&D expenditure by Nifty 100 companies during FY23-25. The automation, pharma, and defence sectors recorded the highest R&D shares in FY25. 

 

Reddy’s Laboratories saw its R&D expense as a share of revenue fall from 11.7 per cent in FY22 to 10 per cent in FY25. In contrast, Hindustan Aeronautics Limited (HAL) registered an increase from 7.7 per cent to 8.4 per cent, though with fluctuations during the period. 

 

Among defence PSUs, HAL and Bharat Electronics Limited (BEL) dominated R&D expenditure, accounting for 42 per cent and 21 per cent, respectively, in FY25. 

 

As of March 2025, Hindustan Unilever, TCS, and Motherson emerged as companies with the highest number of patents. 

 

Despite these developments, Indian companies continue to lag behind global peers in R&D spending, highlighting the need for sustained investment and innovation to remain competitive internationally.