The Federation of Indian Chambers of Commerce and Industry (FICCI) has urged the center to do away with import duties on equipment, consumables and clinical trial samples used solely for the purpose of research and development by the pharmaceutical industry. The Federation wanted the duty exemption benefits currently enjoyed by the government owned research institutions to be extended to non-government R&D institutions as long as they plough back the quantum of amount thus saved into R&D activities.
The pre-budget memorandum of FICCI pointed out that such fiscal stimulus is necessary for domestic industry if it has to take on research oriented multinational pharma giants and compete in the world markets.
FICCI has noted that the government directive allowing duty free import of specified equipment worth Rs one crore per year against exports of Rs 100 crore cannot make any significant impact. Considering the huge amount involved in research and development expenditure, the notification would not have any significant impact. There is a need to increase the limit substantially for pharma industry, it suggested.
“Its surprising that the pharma industry is taken at par neither with IT industry – sunrise industry nor with textile industry – traditional industry of India. The IT industry enjoys a special treatment as knowledge based industry and granted several concessions for import of capital goods and equipment. However pharmaceutical industry is required to pay duties ranging from 30 per cent to 57 per cent even for R&D equipment,” it noted.
The federation has sought duty free sops for the healthcare sectors also. It has suggested the government to consider continuing total duty exemption for MRI, cathlab, mammography, color Doppler, ENT and ophthalmology equipment.FICCI wanted all life saving medical equipment and all diagnostic equipment for all medical fields to be made duty free. Reduction in the existing customs duty in case of medical and surgical instruments was also demanded.
Noting that 7ACA is placed under the list of concessional import duty, FICCI said that the concession was allowed in the absence of indigenous manufacturing and in a bid to make available affordably priced 7ACA-based antibiotics. “Now that domestic manufacturers are involved in this business, it is suggested that the import duty on 7ACA should be raised to 30 per cent at par with other pharmaceuticals and chemicals,” it said.