India stood sixth in terms of the most ‘innovative’ countries in General Electric's Annual Global Innovation Barometer in January 2013. It was the eight-largest country in terms of research and development (R&D) investments in 2013, with R&D investments expected to increase to US$ 44 million by 2014. India 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 such as vaccines, drugs and pharmaceuticals, supercomputing, solar energy and electronic hardware. The government has contributed US$ 1.1 billion public–private partnership fund to support research and development in India. It also offers 200 per cent deduction for capital and revenue expenditure incurred by manufacturing companies with in-house R&D. Income tax exemption of 125–175 per cent is also granted 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. Contract research is a fast-growing segment in the Indian healthcare industry. The country’s huge population places it among the world’s largest markets for vaccines and drugs.
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