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R&D activities in pharma may get tax boost in Budget

Annually, India exports pharmaceutical products worth $ 10 billion

Press Trust of India  |  New Delhi 

Finance Minister Arun Jaitley may accord enhanced tax incentives for research and development (R&D) activities in the pharmaceutical sector in the forthcoming to be announced on February 28.

In its proposals, the Commerce Ministry has sought "weighted average tax benefit of 400 per cent for R&D activities for the sector", a senior official told PTI..

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"There is an urgent need to boost R&D in the pharma sector. India is the hub of generic medicines. It contributes significantly to the country's total exports," the official added.

Annually, India exports pharmaceutical products worth $ 10 billion. The market size of the is around Rs 1 lakh crore.

The need for special financial package for the pharma sector has been highlighted in various fora.

The pharma sector is a capital intensive sector. Besides R&D expenditure, regulatory requirements require large funds, an expert said.

"All quality investments should be treated on par with R&D to provide incentives to the industry," the official added.

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First Published: Sun, February 15 2015. 11:17 IST