Association of Biotechnology Led Enterprises (ABLE) has insisted that the new government should ensure a transparent regulatory framework for the Indian biotechnology sector which is currently a $7.5 billion industry.
In the forthcoming Union Budget in mid July, ABLE wants that government should focus on bio manufacturing infrastructure, investment in R&D and rational tax structure.
“India has all the capabilities to become a global leader in affordable healthcare. With all the support, we could achieve global leadership in providing affordable health care with innovative drugs, quality food and feed for all” said Dr P M Murali, president – ABLE.
In its 20 point list to the government, ABLE’s key recommendations are to make bio-manufacturing the next big opportunity after generics for India. Invest $4-5 billion each year which is Rs.24,000 to 30,000 crore in the next 5 years to grow the biotech Industry to $100 billion by 2025 with a 25 per cent return on investment and set a growth rate of 30 per cent year on year.
It has called to allocate Rs.500 crore annually from the R&D cess accessible by the Technology Development Board to stimulate Human Resource Development, high-end institutional development in biotech, stimulating incubators, ignition grants, start-ups and small businesses, and collaborative efforts in cutting-edge technologies with business of all sizes on one hand and national and international academia on the other.
The Corporate Social Responsibility (CSR) funds to stimulate public-good and socially- relevant research in collaboration through partnership with the Biotechnology Industry Research Assistance Council (BIRAC) of the Department of Biotechnology (DBT). All such contributions to BIRAC should be fully-tax exempt. As of now only incubators in academic institutions are eligible for availing CSR funds for promoting innovation. This was passed as a government order last year. This should be extended to all incubators and science/biotech/knowledge parks, whether they are part of academic institutions or not.
DBT fund allocation to be increased by Rs.50 crore annually to further develop the International Centre for Genetic Engineering and Biotechnology (ICGEB) into an India-led hub for high-end application oriented research partnership stretching from Africa and West Asia to Japan and the Pacific.
On the tax front, ABLE has pressed for elimination of service tax to the CRO industry or reduce the same for overseas clients paying in foreign currency. Weighted tax deductions should be applicable to outsourced clinical trials and R&D, preparations of dossiers, foreign consulting/legal fees for NCE (New Chemicals Entities) and ANDA (Abbreviated New Drug Applications) filings with the US FDA and Patent defending charges.
The government needs to encourage specific venture capital funds and creation for biotechnology including pharmaceuticals companies. It has called for SEBI registered bio-technology funds to be eligible for the weighted average tax deduction under Section 35 (2AB).
Incentivize Investment Bankers to list biotech companies on SME exchanges. Allow a tax holiday for a period of 10 year for indigenously developed bio pharma drugs. Mandate that only India manufactured drug products be eligible for weighted premium and tenders. Extend 100 percent tax free status for Biotechnology special economic zones (SEZs). Current tax incentives of 200 per cent weighted deduction should be increased to 300 per cent with a validity of 10 years. Create technology parks similar to IT/ITES parks, with tax and duty benefits.