Indian drugmakers could see excise duty on drugs restored to 8% from the present 4%, but they are hopeful research & development could attract some tax sops in the Union budget on February 26.
Industry players and analysts expect tax sops for R&D to push investments in the sector.
Sudhir Singhi, chief financial officer, Aurobindo Pharma, said the government might restore the excise duty on drugs to 8% from the present 4% offered as part of the first economy stimulus package in December 2008, to ease the effects of a debilitating global financial crisis.
Drugmakers are expecting R&D to be a major bet in terms of easing regulation to boost the sector in the country.
"The government should increase the weighted tax deduction on R&D activities up to 200% from the present 150%," said Dishman Pharma's Managing Director JR Vyas.
"This will prove to be a major boost for domestic R&D activities," said Sundeep Bambolkar, director-finance and operations, Indico Remedies Ltd.
Bambolkar also wanted complete income tax exemption on exports to be extended to pharma companies
"The industry has been pressing for additional sops on R&D and exports fronts. We can expect some announcement in this regard," said another sector analyst.
