Aim to spur sluggish growth of biotech sector
ABLE and DBT have put forth recommendations for the upcoming Union Budget designed to help the biotechnology industry grow significantly in the forthcoming financial year.
The growth of the Indian biotechnology sector has stagnated currently at 15% year on year and but ABLE and DBT feel that it could grow this to about 30%.
Their road map for growing the Indian biotech sector from the current $5-7 billion to $100 billion before the end of 2025 envisages Karnataka, Telangana, Andhra Pradesh and Gujarat as the key states where the biotech industry is likely to grow. With focused investments, each of these states is capable of taking a quarter of the $100 billion.
ABLE-DBT’s recommendations are as follows:
- Inclusion of global spends on R&D and patenting, pertaining to 200% weighted tax deduction on R&D. Currently only Indian spends are eligible. ABLE-DBT opines that this amendment alone will drive innovation in an exponential way.
- In all biotech/ pharma SEZs the association would like MAT to be exempted and also seek extension of the 10 years of tax holiday of biotech/pharma SEZs by another two years to accommodate regulatory approval time lines which are specific to the sector. At present, the sector is denied two years of tax holiday on account of regulatory gestation which negatively impacts ROI.
- Among the many expectations from the budget, the deployment of GST is one of the most anticipated fiscal reforms. GST implementation from coming fiscal year is possible. GST implementation is not just a tax reform but a business transformation. The pharmaceuticals sector will be significantly impacted by this change.
- The ABLE-DBT wishlist also asks for a change in listing norms for biotech companies to enable access to capital markets, requesting that revenue-less IP driven companies are provided eligilbility by SEBI. This will drive innovation and value creation of IP led companies.
- Creation of an Innovation fund of Rs 10,000 crore as declared by the Government. ABLE-DBT recommend that the R&D cess be utilised to create this fund.
- In order to realise the MAKE in INDIA vision ABLE-DBT suggest that all indigeneously made biotech products be given 15 – 25% weighted advantage over imported products in all government tenders.