India was the seventh-largest country in terms of research and development (R&D) investments in 2012, with R&D investments expected to increase to US$ 45.2 billion in 2013. The country is the largest exporter of IT products and has the third largest pharma sector with a fast growing contract research segment. India’s pharmaceutical industry, which accounts for about 1.4 per cent of the global pharmaceutical industry in value terms and 10 per cent in volume terms, is expected to remain a major R&D growth driver.
The Government of India plans to involve the private sector in R&D mainly for sectors like vaccines, drugs and pharmaceuticals, super computing, solar energy and electronic hardware. The government offers 200 per cent deduction for capital and revenue expenditure incurred by manufacturing companies with in-house R&D. Income tax exemption of 125 per cent to 175 per cent on donations made to universities, colleges and other scientific associations.
India is increasingly seen as a product development destination. Companies across sectors (such as IT, consumer electronics, personal devices, medical electronics, telecom and automobiles) are now offshoring complete product responsibility including complex services like product management.
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