Topic- Research &

Development in
INDIA

R&D
IN
SUBMITTED TO-
INDIA SUBMITTED BY-
COMMERCE
Meenakshi 8027
DEPT
Prabhjot 8030
 What is the meaning of
RESEARCH AND DEVELOPMENT ????
??
R & D means->
Discovering new knowledge about

PRODUCT

PROCESSES

SERVICES
 CONTINUED
and then applying that knowledge to
create new and improved products,
processes, and services that fill
market needs.
 INNOVATE

DO THE NEW
FEW EXAMPLES-
EARLY MAN
INVENTED
WHEEL & FIRE
TELEPHONES
MOBILE
PHONES
DEFINITION OF R&D BY
Organization for Economic Co-operation and D
evelopment

R & D refers to-

"creative work
undertaken on a
systematic basis in order
to increase the stock of
knowledge, including
knowledge of man, culture
and society, and the use of
this stock of knowledge to
devise new applications"
 PRIMARY TYPES OF
R&D
BASIC APPLIED
RESEARCH RESEARCH

DEVELOPMEN
T RESEARCH
NEED FOR R&D
1.
To achieve economic
development
Continued

2.
To create new and
improved technology
continued

3. To meet present
Competition
continued
4.
To increase company’s sales
and profit
Continued

To become a global player

WORLD’S BEST R&D COM
PANIES
IBM
APPLE
General Electric
3M
TOYOTA
DUPONT
MICROSOFT
GOOGLE
GENETECH
DOW CHEMICAL
WHAT IN-HOUSE R&D CENTER’S?
These are those centers who are
conducting R&D functions within the
geographical area of their country.
Benefits available for "In-house R&D Center
s" of companies….
Duty free import of specified goods
150% of the total expenditure whether Revenue or
Capital in nature Weighted Deduction in Income Tax
for 3 years & more.

Commercial R&D companies eligible for 10yrs tax

holiday
Other benefits–excise duty waiver for 3 yrs
,custom and excise duty exemption , state
subsidy
continued

IT sector can avail 150% weighted

deduction on R&D

Income tax exemption @ 125% to

Donations made to approved
Scientific and Industrial Research.
Financial and other incentives To R & D C
entre

off of revenue expenditure on

R&D;  

Write off of capital expenditure on

R&D in the year the expenditure
incurred;
Continued
Weighted tax deduction of 125% to the
sponsor of sponsored research
programmes in universities, IIT’s and
approved national laboratories.

Weighted tax deduction @ 150% on

R&D expenditure incurred in the
approved in-house R&D centre of All
manufacturing companies minus small
negative list
SOME INPORTANT POINTS RELATED
TO R&D EXPENSES

•R&D costs are usually expensed as incurred.

• Research and development spending is often listed as

a separate item in a company's financial statements.
Manufacturing units having “In
House
R & D Centre” can avail benefit
s of weighted deduction of Inc
ome Tax if :-
1 The R&D Centers is holding
recognition.
continued
2 The R&D Centers is exclusively engaged
in research and development in any
areas :
1.Bio-Technology
2.Drugs
3.Pharmaceuticals
4.Seeds Manufacturing Industry
5.Electronics Equipment
6.Computers
7.Telecommunication Equipment
8.Chemicals
9.Automobiles & automobiles components
10.Aviation Aerospace
11.Non-ferrous Metals etc……
“MAJOR SECTORS IN R&D”

Indian auto industry

Pharmaceuticals and
Biotechnology  

Chemical Industry

Electronics, IT and Telecom

 Contribution of various sec
tors

1. Auto industry

• Fourth largest market for passenger cars in Asia

• Second largest manufacturer of two-wheelers
worldwide
• Fifth largest manufacturer of commercial vehicles
worldwide
• Largest manufacturer of tractors and three-wheelers
worldwide
Maruti Suzuki India to expand researc
h and development

MARUTI suzuki is planning to increase R&D

strength to 1000 people by march,2010 , currently
it is 720 people.
Maruti for new Research and Development facility
in Harayana

Maruti Suzuki India plans

to set up a new Research
and Development (R&D)
centre that will include a
testing track in the same
premises in Harayana.
NEW DELHI: Luxury car maker Mercedes-
Benz India plans to revamp research and d
evelopment (R&D)

By increasing headcount to 1200 engineers

from 1,000 in its Bangalore facility.
 TATA MOTORS

Their annual expenditure on

R&D is approximately 2% of
their turnover.

They have also set up two in-house

Engineering Research Centres
 "India is emerging as one of the promi
nent destinations for global automakers
to set up their R&D centers."

Reasons being-

Lower costs of operation.

Availability of talent, especially in

I.T space.
continued

Ability to carry out tests over diff

erent [and tough] terrains and we
ather conditions and a potentially
large domestic market that can j
ustify the R&D investment.
Pharmaceuticals Sector
Investments by govt in PHARMA SEC
TOR
 Indian government has announced to
invest nearly Rs 2,500 Crore and a si
milar amount from private players to b
oost up research and development (R
&D) activities and to promote innovati
on in the pharmaceutical sector.
At present, a total of Rs 2,000 Crore i
s spent in research and development
activities in India.
 RANBAXY LABORATORY

50% of the R&D investment in the country was done in

the pharma sector. "Ranbaxy Laboratory alone contribute
s 10% of the total R&D carried out on India".
Ranbaxy spent about 7% of its $1 billion sales during 2004
(calendar year) on R&D, while Dr. Reddy's Laboratories spent 14% of its sa
les of $446 million in the
fiscal year that ended last March.
Electronics, IT and Telecom
LG India to spend Rs 400 cr on R&D
 Tata DoCoMo Plans R&D Unit In India

DoCoMo, is planning to set up a new global

research and development (R&D) centre in
India. DoCoMo has altogether five R&D centres
across the globe – two in Japan and one each in
the US, Europe and China.
Nokia has three R&D centres in
India

one each in Bangalore, Mumbai and Hyderabad.

The centers are focused on next-generation packet-
switched mobile technologies and communications
solutions to enhance corporate productivity.
Dell opens new R&D center in India

Dell inaugurated new R&D facility in Bangalore,

that can house up to 1,000 staff.
The new facility is in line with Dell's plans to make India a hub
for the development of enterprise products such as servers,
storage, and software.
SHARE OF R&D IN
INDIA
OUT
ON march OFminister
12th,2008 S&T “GDP” “Kapil Sibal”
Informed Rajya Sabha-:

R&D spending as
percentage of GDP in
India is only 0.8%.
Foreign R&D centres in India: Is there
any positive impact?

MNC has both positive and negative impact

on host countries .

Positive impacts are-

Foreign R&D centres
can contribute to the host
country’s innovation system
through their linkages with the
host country’s institutions
Continued

competitiveness among the local

firms,

local firms can have access to high

technology through
partnership/collaboration.

 Setting up of specialized training

centres;

 More job opportunities

Negative impacts-
brain drain-
Migration of human resources

Greater competition to domestic firms

Share of Public & Private
sector
in R&D as %age of GDP i
n INDIA
20%

PRIVATE SECTOR

PUBLIC SECTOR
80%
Share of R&D in other countries out of GDP and compa
rison with India IN 2006

1.03
2.47
AMERICA
CHINA
JAPAN
3.5 INDIA
1.61
Why INDIA is lacking in R&D
Spending???
 ADVANTAGES
COMPANY GROWTH.

 HIGHER PROFIT MARGINS.

 UTILISATION OF EXCESS
CAPITAL.
Thanks