Indian pharma firms seek govt tax reliefs, incentives to spur innovation
By: Admin
July 06, 2024
Categories: Income Tax News|News
4 Min Read
India’s Pharmaceutical Sector Seeks Government Support to Boost Innovation
India’s pharmaceutical industry, renowned globally as the ‘pharmacy of the world’ for its production of affordable generic drugs, is now poised to shift gears towards innovation. As Prime Minister Narendra Modi’s government prepares to announce its federal finance budget, expectations are high within the industry for policies that will stimulate research and development (R&D) in novel drug development.
Tax Incentives and Financial Assistance
Key stakeholders in India’s pharmaceutical sector are advocating for substantial tax incentives to foster innovation. They propose income tax exemptions spanning 5 to 10 years for new molecules developed domestically. Such incentives, they argue, would incentivize pharmaceutical companies to invest significantly in R&D aimed at developing complex drugs beyond the traditional generic offerings for which India is known.
Bharat Biotech’s Chairman highlighted the potential impact of such incentives, emphasizing that they could catalyze innovation at a grassroots level. Bharat Biotech itself made headlines with the development of Covaxin, India’s first indigenous COVID-19 vaccine, underscoring the country’s capacity for pioneering pharmaceutical research.
Challenges and Opportunities in Drug Development
Experts emphasize that for India to sustain its global leadership in pharmaceuticals, it must expand its focus from generic drugs to innovative, high-value medicines. This shift requires substantial investment in R&D, clinical trials, and regulatory compliance. The current landscape positions India as the world’s third-largest drug manufacturer by volume, trailing only the United States and China. However, to continue this growth trajectory and enhance global competitiveness, the industry seeks targeted government support.
Policy Framework for Innovation
Industry leaders advocate for a supportive policy framework that includes measures beyond tax incentives. These include insurance coverage tailored for novel drugs, which would mitigate financial risks associated with high-cost R&D and clinical trials. Furthermore, harmonizing regulatory standards for manufacturing and clinical trials is critical to reducing bureaucratic hurdles and ensuring a conducive environment for innovation.
Policy Framework for Innovation
Industry leaders advocate for a supportive policy framework that includes measures beyond tax incentives. These include insurance coverage tailored for novel drugs, which would mitigate financial risks associated with high-cost R&D and clinical trials. Furthermore, harmonizing regulatory standards for manufacturing and clinical trials is critical to reducing bureaucratic hurdles and ensuring a conducive environment for innovation.
Government Initiatives and Industry Expectations
Since 2020, the Indian government has implemented various incentives to promote domestic manufacturing across sectors, but these have not yet included novel drug development. Pharmaceutical manufacturers are optimistic that the government will review and expand these incentives to encompass innovative drug research
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