Biotechnology

OUTLINE

  • India is among the top 12 biotech destinations and has the second highest number of United States Food & Drug Administration (USFDA) approved plants.
  • India has adopted the product patent regime in 2005.
  • The Indian biotech industry is expected to grow at 30.46 percent CAGR to reach USD 100 billion by 2025.
  • 5 University Innovation Clusters created and 1 regional innovation center.
  • Accelerated clearances for Green/Brownfield Projects.
  • Clear regulatory guidelines for the biotech sector.
  • Leading Public institutes and universities which produce a strong pool of skilled manpower.
  • Fast developing clinical capabilities with the country becoming a popular destination for clinical trials, contract research, and manufacturing activities.

FDI POLICY

  • 100% Foreign Direct Investment (FDI) is allowed under the automatic route for greenfield pharma.
  • 100% Foreign Direct Investment (FDI) is allowed under the government route for brownfield pharma in upto 74% FDI is under automatic route and beyond 74% is under government approval route.
  • FDI up to 100% is allowed under the automatic route for the manufacturing of medical devices.

SECTOR POLICY

  • National Guidelines for Stem Cell Research 2013:

    • The guidelines have been laid down to ensure that research with human stem cells is conducted in a responsible and ethical manner and complies with all regulatory requirements pertaining to biomedical research in general and of stem cell research in particular.
    • These guidelines apply to all stakeholders including individual researchers, organisations, sponsors, oversight/regulatory committees and any other associated with both basic and clinical research on all types of human stem cells and their derivatives

    Guidelines on Similar Biologics-Regulatory Requirements for Marketing Authorization in India 2012:

    • The Guidelines on Similar Biologics prepared by the Central Drugs Standard Control Organization (CDSCO) and the Department of Biotechnology (DBT) lay down the regulatory pathway for a biologic claiming to be similar to an already authorised reference biologic
    • The guidelines address the regulatory pathway regarding the manufacturing process and quality aspects for similar biologics
    • These guidelines also address the pre-market regulatory requirements including a comparability exercise for quality, preclinical and clinical studies and post-market regulatory requirements for similar biologics

    National Biotechnology Development Strategy 2015:

    The National Biotechnology Development Strategy 2015-2020 was launched on December 30, 2015. The Strategy intends to establish India as a world class bio manufacturing hub by:

    • Providing impetus to utilizing the knowledge and tools to the advantage of Humanity
    • Launching a major well directed mission backed with significant investment for generation of new Biotech Products
    • Establishing a strong Infrastructure for R&D and Commercialization
    • Creating India as a world class Bio-manufacturing Hub

    National Intellectual Property Rights Policy 2016 (IPR Policy 2016)

    India’s National IPR policy was released in May 2016 with an aim to:

    • Generate awareness of IP (Intellectual Property) in the country
    • To push IPRs as a marketable financial assets which will promote innovation and entrepreneurship in the country

FINANCIAL SUPPORT

  • PROVISIONS OF THE 2016-2017 UNION BUDGET:

    Tax Incentives

    • The turnover limit to avail the Presumptive Tax Scheme under section 44 AD, has been increased from USD 153846.2 to USD 307692.3. The taxpayers carrying a business will be allowed to avail this scheme for which they will have to declare profits at minimum 8% of the total turnover and they will be exempted from the requirement of maintaining any books of accounts
    • New manufacturing companies incorporated on or after 1.3.2016 to be given an option to be taxed at 25% + surcharge and cess provided on fulfilment of certain conditions
    • Lower corporate income tax has been proposed for the next financial year of relatively small enterprises
    • 100% deduction of profits for 3 out of 5 years for startups setup during April, 2016 to March, 2019. MAT will apply in such cases
    • 10% rate of tax on income from worldwide exploitation of patents developed and registered in India by a resident
    • Custom single window project have been announced and would be implemented at major ports and airports from the beginning of next financial year

    Service Tax

    • Exemption from the service tax on services provided by BIRAC approved biotechnology incubators to incubatees with effect from 1.4.2016
    • Service tax services of assessing bodies empaneled centrally by Directorate General of training, ministry of Skill Development & Entrepreneurship Development w.e.f. 1.4.2016

    OTHER INCENTIVES:

    • Refund of customs duty paid at the time of import of scientific and technical instruments, apparats, etc. by public funded and other research institutions, subject to submission of certificate of registration from the department of scientific and industrial research
    • Depreciation allowance on plant and machinery has been raised to 40% from 25%
    • Customs duty exemption on goods imported in certain cases R&D
    • Customs and excise duty exemption to recognised Scientific & Industrial Research Organisation (SIRO).
    • 150% weighted tax deduction on R&D expenditure
    • A three-year excise duty waiver on patented products
    • 100% rebate on own R&D expenditure
    • 125% rebate if research is contracted in publicly-funded R&D institutions
    • Joint R&D projects are provided with special fiscal benefits
    • The setting up of a venture capital fund to support small and medium enterprises
    • Promoting innovations through Biotechnology Industry Partnership Programme(BIPP), Small Business Innovation Research Initiative(SBIRI), Biotechnology Industry Research Assistance Council(BIRAC) and biotech parks
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