Finance Minister Arun Jaitley may accord enhanced tax incentives for research and development (R&D) activities in the pharmaceutical sector in the forthcoming Budget to be announced on February 28.
In its Budget proposals, the Commerce Ministry has sought weighted average tax benefit of 400 per cent for R&D activities for this sector.
Annually, India exports pharmaceutical products worth USD 10 billion. The market size of the industry is around Rs 1 lakh crore.
The need for special financial package for the pharma sector has been highlighted in various fora.
The pharma sector is a capital intensive sector. Besides R&D expenditure, regulatory requirements require large funds, an industry expert said.