The current tax structure in the analytical industry is irrational and works as a serious deterrent for local manufacturing of lab instruments and equipments.
The government's policy of levying a lower customs duty on complete system than the components for manufacturing the end product is a blow to local production. In addition, the buyers have to shell out additional central excise duty and sales tax on locally manufactured goods making it prohibitively expensive compared to imports, KV Venugopalan, president, Indian Analytical Industry Association (IAIA) & president of Waters India told Pharmabiz
“We have been pressing the government to take a re-look at the tax structure and have also called for the same in Union Budget 2013 recommendations. There is a strong presence of multinational companies (MNCs) in the domestic market and they should be encouraged to start their manufacturing operations in India,” he added.
Creating technology parks, like IT/ITES parks, with tax and duty benefits will go a long way in supporting industry efforts in attaining self-reliance in this critical component of scientific and economic growth. “We hope the government will consider our recommendations which will help bolster the industry which is seen a fulcrum of the bio-pharmaceutical sector,” said the IAIA president.
Most of the critical components and materials essential for manufacturing high technology instrumentation are not available in India and have to be either developed or imported.
Analytical instrument industry being multidisciplinary also requires the manpower with technical skills. This is where the government should also look to revising and introducing the related educational inputs that could support the needs of the industry for research and development (R&D).
Present market for analytical instrumentation in India is valued to be around US$ 1 billion and the reality is that less than six per cent of the requirement is met by domestic manufacturing. Except may be for microscopes and few liquid handling systems most of the manufactured systems are of entry level technology and not suitable for cutting edge research which is the need of the hour. “In fact, the current scenario does not augur well for India which has made significant strides in many areas including Information technology, space research and nuclear science,” he said.
Analytical instruments development is both technology and capital intensive. A strong R&D base with multi-disciplinary capability is mandatory to develop modern instrumentation which is ahead of those currently available in the market. Indian industry being small and fragmented does not have the capability to make such investments and focussed efforts and support from Government is necessary to make any progress in this area. Close collaboration with academia, government R&D establishments and industry is essential for the success of any developmental programme, stated Venugopalan.