The government should reduce the high rate of import duty currently levied on analytical instruments used in chemical and pharmaceutical laboratories to make these products affordable to the Indian industry, according to Graeme Cullinan, Asia Pacific sales manager of Hach Ultra Analytics, a leading US based company.

He said that the current import duty of 48 per cent on analytical instruments is too high for many companies. The total incidence of duties comes to 53 per cent which includes 4 per cent octroi and 1 per cent customs clearance charges. "The duty needs to be reduced to a maximum level of 10 per cent. This will enable our Indian customers to buy quality instruments at far more affordable rates," he said.

Hach Analytics has captured a market of $ 1.5 million, controlling a large share of the Indian market, said Cullinan. Major pharmaceutical companies like Cipla, Ranbaxy, GSK, Serum Institute, Zydus Cadila and Dr. Reddy's Labs are some of the key clients using Hach's range of instruments in the country.

On the one hand, Indian government is taking encouraging steps like economic liberalization, readying up for product patent regime post 2005, encouraging biotechnology and R&D in the country. On the other hand, it is still showing protectionist approach like imposition of huge import duty, he added. "If India has to benefit from its rich source of scientific talent and be a hub for quality R&D, it should have quality scientific infrastructure like systems and instruments in its place. This will be possible only when more MNCs are encouraged to operate here, for which government will have to show leniency in duty structure," said Cullinan.

Hach Ultra Analytics was formed globally after the integration of five different companies viz. HIAC, Met One, Polymetron, Orbisphere, and Anatel in January 2003. Hach has offices in USA, Switzerland, Germany, and South Africa, Japan and Singapore.

Except Polymetron, all other member companies of Hach import instruments into the country. Polymetron indigenously makes its range of products from Forbes Marshall, an Indian company.

Anatel, HIAC and Met One make their products in US and Orbisphere in Switzerland. Met One controls about 70 per cent of Airborne Particle Counters market in India, HIAC controls 40 per cent of Liquid Particle Counter (LPC) market. LPC is used for testing injectibles. Anatel controls 75 per cent of on-line Total Organic Carbon Analyzers (TOC) market in India. TOC Analysers are used for online testing of purified water and water used in injections.

The marketing, distribution, maintenance and quality assurance of Anatel, HIAC and Met One range of products is done by Mumbai-based Measuretest Corporation. "We organize in-house seminars for the large pharma companies, as well as regular lectures with the Pharmaceutical Engineers Group of the Indian Drug Manufacturer's Association," said Sheesh Gulati, CEO of Measuretest.

Hach Ultra has no immediate plans of setting up a manufacturing base in the country. "The Indian market size is not that large to set up a manufacturing base here right now. Regarding the future, let us look at the turn of events in terms of government policy and demand for our products," said Cullinan.

Cullinan also said the future for their instrument sales in India looked very bright, and expected at least a 10 per cent growth rate annually.