Low R&D spending in India

Indian companies have been found to spend a meager 0.3% of net sales on R&D in FY23, while the ratio of gross expenditure on R&D to GDP in the country is just 0.64%. In comparison, China spends nearly 2.5% of GDP on R&D, and the US spends nearly 3.4%. However, there are discussions about potential underestimation of R&D spending due to incomplete data collection and challenges in accurately categorizing R&D expenses. Companies in the tech sector, like Amazon, also face difficulties in separating and reporting R&D expenditures accurately. The low R&D spending in India raises concerns about the country's innovation potential and its impact on economic growth.