India is fast emerging as a global research and development (R&D) hub. Around 30 per cent of the top 1,000 global R&D spending organisations have centers in India. The total R&D spending is estimated at US$ 41.3 billion in FY12 as compared to US$ 38 billion in FY11. The country aims to increase its R&D spending to 2 per cent of gross domestic product (GDP) in the 12th Five-Year Plan (2012-17).
The share of knowledge intensive production in India’s GDP increased from 8.6 per cent to 14 per cent during 2005-10, a compound annual growth rate (CAGR) of 17.2 per cent. During FY06-11, patent applications increased at a CAGR of 9 per cent from 24,505 to 34,000, design applications increased at a CAGR of 6 per cent from 4,949 to 6,500, whereas trademark applications rose at a CAGR of 16 per cent to 179,317. Growing IP application activity indicates increased in-house R&D and innovation.
The Government of India (GOI) has initiated setting up of Centres of Excellence (CoEs) in various areas based on the public-private partnership (PPP) model for technology development and transfer, scientific research, human resource development and economic outreach.
India has a very favourable tax regime for R&D. The Government provides 200 per cent deduction for capital and revenue expenditure incurred by manufacturing companies with in-house R&D.
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