Key Points

  1. India's industry must increase R&;amp;D spending from 0.6% of GDP to 3% of GDP to compete in the FTA-driven market.
  2. Indian companies must attract talent back to the country and create centres of excellence to improve product quality and competitiveness.
  3. The government has concluded several major trade agreements, including CETA with the UK, CEPA with Oman, and a free trade agreement with New Zealand, which will open up new markets for Indian exports.

What India's Industry Must Do to Compete

India's industry is facing a significant challenge as free trade agreements (FTAs) open up markets on both sides. Boston Consulting Group India chairman Janmejaya Sinha has warned that Indian companies must increase their R&D spending, attract talent back to the country, and improve product quality to compete in the FTA-driven market.

Sinha stressed that the industry and government must recognize the scale of change ahead and take necessary actions to prepare for the competition. He pointed out that India has concluded several major trade agreements in recent years, including CETA with the UK, CEPA with Oman, and a free trade agreement with New Zealand, which will open up new markets for Indian exports.

The chairman emphasized that Indian companies must enhance their R&D spend from 0.6% of GDP to 3% of GDP and create centres of excellence to improve product quality and competitiveness. He also highlighted the need to attract talent back to the country, similar to China.

At a Glance

Main CompanyBoston Consulting Group India
Chairman Janmejaya Sinha made the comments in an interview.
Trade AgreementComprehensive Economic and Trade Agreement (CETA)
Signed with the UK in July 2025, providing near-zero-duty access for about 99% of Indian exports.
R&D Spend0.6% of GDP
Current R&D spending in India, which needs to be increased to 3% of GDP to compete in the FTA-driven market.
GDP Growth Rate9%
Potential growth rate for India if it pivots now and prepares for FTA-driven competition.

Behind the FTA-Driven Competition

Behind the FTA-Driven Competition

Sinha's comments highlight the need for Indian companies to adapt to the changing market dynamics driven by FTAs. The agreements will open up new markets for Indian exports, but also increase competition for domestic companies.

The chairman's emphasis on R&D spending and talent attraction suggests that Indian companies must invest in innovation and human capital to remain competitive.

The government's efforts to conclude trade agreements and promote exports are a positive step, but Sinha's warnings underscore the need for industry and government to work together to prepare for the FTA-driven competition.

Preparing for a 9% Growth Rate

Indian companies must take the following steps to prepare for FTA-driven competition:

  • Enhance R&D spend from 0.6% of GDP to 3% of GDP.
  • Attract talent back to the country and create centres of excellence.
  • Improve product quality and competitiveness.

By taking these steps, Indian companies can position themselves for a 9% growth rate and remain competitive in the FTA-driven market.