Union government is now gearing up to ensure that the pharma industry gets an exemption in income tax for research and development (R&D), said Union minister for chemicals and fertilizers Ananth Kumar.

The country needs to provide an additional focus to R&D to drive innovation. This is the need of the hour and the first step in this direction is to ensure that we give total exemption for R&D in pharmaceuticals, Kumar said while inaugurating the Indian Pharma and India Medical Expo 2016 in Bengaluru.

“R&D is the backbone of the pharma industry. Now India needs to ensure that innovation is in place to drive its drug discovery efforts,” he added.

“The pharma industry during its dialogue with the government has been insisting for this. We are now working to ensure that the captains of the pharma industry can have a dialogue with the Union minister for finance Arun Jaitely to put forth this request on not just income tax exemption, but also subvention in interest rates and also setting right the anomalies of inverted tax structure which is affecting the sector. This meeting will be well before the Union Budget 2016,” the minister said.

We need to create an eco system in research and development. Currently, India is weak in pharma research and development but not in terms of expertise but the drug discovery efforts needs a fillip, noted Dr. VK Subburaju, secretary, DoP.

The research in India is happening in silos. For this the DoP is now looking to collaborate with the industry and related research centres in the country including Indian Council of Medical Research, department of biotechnology and private research institutes to have an update on the developments in this area, said Dr. Subburaj.

The pharma industry experts noted that if the government kept a tab on the research activities and remain updated by sharing this information with the industry, it would enable faster technology transfer among others.

“There is a need to innovate and we need to provide cost competitiveness in the generic formulations. Therefore the focus should be on incentives for innovation through Pharma Park infrastructure,” said Pankaj R Patel, chairman, Zydus Cadila.

Airing his views on the importance of R&D for Indian pharma, Dr. Habil Khorakiwala, founder-chairman, Wockhardt, said that every fifth global researcher was an Indian. The country had the scientific acumen but required the necessary infrastructure.

Incidentally the Association of Biotechnology Led Entrepreneurs had been insisting annually to allocate Rs.500 crore from R&D cess accessible by the Technology Development Board to stimulate the bio-pharma sector. It had also called for weighted tax deductions to be applicable for clinical trials and R&D.