Nestle India shareholders have decisively voted against a proposal to raise royalty payments to its Swiss parent company, Nestle S.A., the company announced late on Friday. The rejected motion sought to increase the royalty fee from 4.5% to 5.25% of net sales, net of taxes, through annual increments of 0.15%.

In compliance with Indian regulations on related party transactions, controlling shareholders were excluded from the vote. The proposal faced significant opposition, with 70.8% of public shareholders voting against it, according to a recent filing.

The decision highlights growing concerns among shareholders about the financial implications of higher royalty payments on Nestle India's profitability and shareholder value. The proposed increase was intended to cover the costs associated with continued use of Nestle S.A.'s intellectual property, brand value, and technological expertise.

This development comes amidst broader scrutiny of multinational corporations’ royalty structures in India, as investors increasingly push for greater transparency and more equitable financial practices. Nestle India, known for popular brands like Maggi, KitKat, and Nescafe, will now have to reconsider its strategy for balancing local and global financial obligations.