India is the largest exporter of information technology (IT) services since 2005 and has the third largest pharma sector with a fast growing contract research segment. India had the eighth largest annual research and development (R&D) investment in the world in 2011. India offers vast opportunities in IT, pharmaceuticals, automobiles, biotechnology and agriculture. India is increasingly seen as a product development destination.
Exports of aerospace products are growing at a fast pace; space research alone accounts for about 12 per cent of gross domestic expenditure on research and development (GERD) in India.
Share of knowledge-intensive production in India's gross domestic product (GDP) has increased from 8.6 per cent to 14 per cent during 2005-2010. This has led to significant amount of technology transfer through industrial acquisitions.
The foreign direct investment (FDI) outflow from India grew at a phenomenal CAGR of 47.7 per cent from US$ 6 million to US$ 14.6 billion during 1990-2010. India has a very favourable tax regime for R&D providing deductions for donations, expenditure on R&D, customs duty benefits and various state government sops. Government also provides 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 have been made to universities, colleges and other scientific associations.
Exchange of scientific knowledge between research centres, national laboratories, institutes of higher learning and the industry and setting up of Centres of Excellence (CoEs) in various areas has been initiated, on back of increased investments by private players.
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