India must move from ‘Made in India’ to ‘Imagined in India’: FM Sitharaman

Finance Minister Nirmala Sitharaman on Tuesday said India is at a “structural inflection point” as rising incomes and upward mobility are set to reshape the country’s next phase of consumption. Addressing the 53rd National Management Convention of the All India Management Association (AIMA), she said businesses need to look beyond affluent urban consumers and tap demand emerging from working families across rural and semi-urban India.

Sitharaman called on companies to increase R&D spending, either through in-house capabilities or collaborations with academia, and said India’s ambition should move from “Made in India” to products that are “imagined in India”—with design, engineering, patents, software and technology developed domestically and taken to global markets.

She also called for greater professionalisation of startups and family-owned businesses, saying the next challenge is not merely creating more companies but building enterprises that can scale, institutionalise and endure. India now has more than 2.3 lakh DPIIT-recognised startups, with more than 120 having crossed the $1 billion valuation mark, she said.

Sitharaman said India’s consumption base is anchored not only in formal urban markets but also in agriculture, construction, transport and informal enterprises. “If corporate India pursues premiumisation for the urban tier alone, growth will lose its structural durability,” she said. The AIMA convention, held on September 21-22, is themed “Transforming for Tomorrow: Growth with Resilience.”

India’s growth story rests on domestic capacity

Sitharaman said resilience should not mean economic isolationism, but building sufficient domestic capacity to absorb global shocks without disrupting national development. She noted that while global growth has slowed below 3%, India’s GDP growth is approaching 8%, with the latest quarter performing stronger than most forecasts.

She also highlighted the recent upgrade of India’s sovereign rating by Japan Credit Rating Agency (JCR), which raised the country’s long-term foreign- and local-currency issuer ratings from BBB+ to A- with a stable outlook on September 2. JCR also raised India’s country ceiling to A.

The Finance Minister said India’s infrastructure and investment push was creating the foundations for stronger private-sector activity. Gross fixed capital formation rose above 34% of GDP in the first quarter of FY27 and grew about 12% in real terms, while manufacturing capacity utilisation climbed to 75%, she said.

Sitharaman added that the government’s capital expenditure has been raised to more than ₹12 lakh crore in FY27, while effective capital expenditure, including grants to states for creating capital assets, has crossed ₹17 lakh crore.

Sitharaman calls for higher quality, R&D spending

The finance minister urged Indian companies to focus on quality, innovation, and greater investment in research and development as the country seeks to move from being a manufacturing base to a source of globally competitive products and technologies.

India’s gross expenditure on R&D is currently 0.83% of GDP, compared with 2.7% for the OECD, 2.6% for China, and 3.5% for the US, she said. The domestic private sector accounts for only 36% of India’s R&D spending, significantly below the more than 70% contribution in leading advanced economies.

Sitharaman further urged industry to strengthen corporate governance, build trust with regulators, improve management education and develop capabilities in areas including geopolitical risks, supply chains, climate, data, regulation, and technology.