Budget 2013: OPPI seeks tax benefits for contract manufacturing and R&D activities

NEW DELHI: Organisation of Pharmaceutical Producers of India ( OPPI) has asked the Finance Minister P Chidambaram to give tax benefits to units engaged in the business of R&D or contract manufacturing in budget 2013.


OPPI feels that while India provides an attractive low cost destination to outsource R&D activities, there is a need for impetus to such activities in the form of tax and fiscal benefits.

Tax benefits should be provided by way of profits linked incentives, proposes OPPI. Further, exemption of income generated from the utilisation of intellectual property should also be provided in order to provide an incentive for R&D in India, says OPPI.

According to OPPI, R&D is a segment which can go a long way for growth of the Indian pharma sector. Contract Manufacturing is another segment which is a growth driver for the sector. However, both these segments remain unattended by the government. Currently, the only tax benefit available for R&D activities is in the form of weighted deduction for in-house R&D.