Union Budget 2012: Pharmaceutical industry seeks higher expenditure on R&D

NEW DELHI: The pharmaceutical industry in its pre-budget wish-list has asked the Finance Minister Pranab Mukherjee to incentivise the sector to promote higher spending in research and development.

The industry has also sought a reduction in taxes and duties on life saving drugs and active pharmaceutical ingredients (API) to provide a fillip to its growth.


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Besides, the wish-list of the industry forth upcoming Union Budget also figured in enhancing export incentive on drug shipments in order to compete with China.

Another major demand of the industry was to exempt all life saving drugs from custom duty which is at 5 per cent at present and rationalize the duty on formulations by reducing it from 10 to 5 per cent.

Pawan Chaudhary, Chairman & Managing Director (CMD), Venus Remedies says that the industry expects impetus for research as R&D expenditure in India is still on lower side and for a sustainable growth India needs more and more R&D.

Most of the pharma companies have their subsidiaries or arms overseas and are subject to international tax. Chaudhary feels that the time has come to bring clarity on the transfer pricing regime by introducing advanced pricing mechanism and safe harbor rules.

He further adds that no increase in excise and service tax rates would benefit pharma companies.