Sources said the finance ministry is actively considering the proposal as part of the overall package being initiated to encourage research and development activities in the pharma sector.The list which covers various disciplines of research in the pharma sector has been prepared with the assistance of the National Institute of Pharmaceutical Education and Research (NIPER).

The premier institute for pharmaceutical education and research is involved in several collaborative research ventures with the industry.The list of items is broadly classifiable under chapter 84, 85 and 90 of the customs tariff.In order to prevent any misuse of the proposed facility, the department of chemicals and petrochemicals under the ministry of chemicals and fertilisers it has been suggested that the importer of equipment would be required to produce a certificate from NIPER about having the required R&D facilities and the R&D facilities will be inspected by NIPER under the department of chemicals and petrochemicals once a year.The move follows representation to the finance minister and minister for chemicals & fertilisers by the CEOs of several leading pharmaceutical companies.

The interactive session was recently organsised by three pharma associations i.e. Indian Pharmaceutical Alliance (IPA), Indian Drug Manufacturers Association (IDMA) and Organisation for Pharmaceutical Manufacturers Association (OPMA).Apart from various fiscal and tax benefits to the pharmaceutical industry for R&D activities, the meeting in early April requested that a list of equipment required for R&D in the pharma sector be sent of the finance ministry for considering customs duty exemption on their import.According to industry sources, the removal of customs duty along with other fiscal and tax benefits would encourage the pharma sector to invest more and more funds in the field of research and development activities.Apart from this, the industry has been clamouring for a number of incentives for the R&D activities, which includes the setting up of the R&D Fund and hike in the exemption limit from 125 per cent to 150 per cent.It may be recalled that the Indian pharma industry has already voiced the needto increase the R&D expenditure from the current levels of around Rs 300 crore (or 2 per cent of sales) to Rs 1,500 crore (5 per cent of sales) by 2005.