New Delhi: FMCG giant Nestlé India paid more than Rs 1,024 crore as royalty to its Switzerland-based parent entity Société des Produits Nestlé S.A. in FY26, reflecting higher sales and continued use of the global group's technology, brands and intellectual property.
Royalty Payment Rises Nearly 14 percent
According to the company's latest annual report, Nestle India paid Rs 1,024.5 crore as general licence fees, commonly known as royalty, during FY26. This was 13.9 per cent higher than Rs 899.41 crore paid in FY25.
The company also paid Rs 102.47 crore as withholding tax on royalty payments during the year, compared with Rs 89.71 crore in the previous financial year.
Why Nestle Pays Royalty?
Nestle India pays royalty to its parent company for access to the Nestlé Group's technology, product formulations, trademarks, research capabilities and intellectual property.
The arrangement allows the Indian arm to manufacture and market products while benefiting from global innovations and technological developments across various product categories.
Currently, the company pays royalty at 4.5 per cent of its net sales.
Shareholders Had Rejected Higher Royalty Proposal
Last year, shareholders rejected a proposal to gradually increase royalty payments by 0.15 percentage points annually over five years. If approved, the royalty rate would have risen to 5.25 per cent of net sales.
The proposed increase was scheduled to begin from July 1, 2024, but failed to receive the required shareholder approval.
The annual report stated that there was no material change in the terms and conditions of the licence agreement during FY26.
Strong Revenue Growth Continues
Nestle India reported revenue from sales of Rs 23,071.46 crore in FY26, registering a growth of 14.2 per cent over the previous year.
The company markets several well-known brands, including Maggi, Nescafé, KitKat, MILKMAID and Cerelac.
Workforce and Expansion Plans
The number of permanent employees stood at 8,382 in FY26, slightly lower than 8,419 in FY25. Employee median remuneration increased by 7.3 per cent during the year, higher than the 4.9 per cent rise recorded in the previous fiscal.
Nestle India is also continuing its capital expenditure programme and is currently setting up its tenth manufacturing facility in the country.
The remuneration ratio of Chairman and Managing Director Manish Tiwary to employees stood at 134:1. He assumed the role on August 1, 2025.
