India’s 2007–08 Budget

The Indian government released its fiscal 2007–08 (starting April 1) budget on February 28. The budget contained favorable news for instrument companies and their customers. The annual budget for the Ministry of Science and Technology rose 46% to Rs3,271 ($74.0 million). Within the Ministry, the Department of Science and Technology received a 58% increase in its budget to Rs1,526 ($34.5 million), the budget for the Department of Scientific and Industrial Research rose 38% to Rs1,070 ($24.2 million) and the Department of Biotechnology’s budget grew 36% to Rs675 ($15.3 million).

For instrument providers, the government has reduced the customs duty on scientific equipment for private research organizations from 7.5% to 5%, bringing it in line with the custom duty for scientific equipment paid by public research organizations. In addition, the government added 15 products to its list of scientific equipment that will be subject to a “concessional rate” of 5% customs duty when imported for pharmaceutical and biotech R&D. The majority of the 15 items are life science instruments including LC/MS systems, DNA analyzers, electrophoresis systems, microarray readers and chips, and “proteomic analyzers.” Both policies make it less expensive for researchers to import laboratory instruments and thus, should stimulate sales of foreign-made instruments and lab equipment.

Pharmaceutical and biotech R&D also will also benefit in other ways from the new budget. The government extended its 150% weighted average tax break for biopharmaceutical R&D by five years to 2012. It has also eliminated a 12.24% service tax on clinical trials, boosting the country’s competitive advantages in that area.

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