Internationalization of R&D (IRD)

Dr A R Kidwai

Member of Parliament (Upper House) India

INDIAS S& T POLICY ON INTERNATIONALIZATION OF R&D

TO PROMOTE INTERNATIONAL SCIENCE AND TECHNOLOGY COOPERATION TOWARDS ACHIEVING THE GOALS OF NATIONAL DEVELOPMENT AND SECURITY AND MAKE IT A KEY ELEMENT OF INTERNATIONAL RELATIONS. SCIENTIFIC RESEARCH AND TECHNOLOGICAL DEVELOPMENT CAN BENEFIT GREATLY BY INTERNATIONAL COOPERATION AND COLLABORATION.

INTERNATIONALIZATION TREND IN GLOBALISING R&D

R&D SPENDING ABROAD BY US AND OTHER DEVELOPED COUNTRIES RISING FASTER THAN DOMESTIC SPENDING. IBM AND HEWLETTPACKARD SPENDING 30% ON R&D OUTSIDE USA. 100 FOREIGN COMPANIES OF JAPAN, GERMANY, UK, FRANCE AND SOUTH KOREA HAVE ABOUT 250 R&D FACILITIES IN USA. MORE THAN 100 R&D CENTERS SET UP IN INDIA BY MNCs.

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EMPHASIS NOW SHIFTING TO EXTERNAL TECHNOLOGY ACQUISITION TO COMPLEMENT INTERNAL EFFORTS. FOR SUCCESS IN GLOBAL MARKET THE MOST IMPORTANT FACTOR IS TECHNICAL SKILLS TO PRODUCE SUPERIOR PRODUCTS AT COMPETITIVE RATES. CONVENIENT MECHANISM FOR TECHNOLOGY TRANSFER INSIDE AND ACROSS COUNTRIES. FREE AND FLEXIBLE MOVEMENT OF R&D PERSONNEL.

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SUITABLE TAXATION AND RELATED ARRANGEMENTS IN RESPECT OF R&D. SUITABLE/APPROPRIATE LEGAL FRAMEWORK FOR FACILITATING COLLABORATIVE R&D AND DISPUTE SETTLEMENT.

INDIAS S&T AGREEMENT

S&T AGREEMENTS WITH MORE THAN 50 COUNTRIES. S&T AND IPR AGREEMENTS WITH FRANCE, EU AND RUSSIAN FEDERATION. JOINT R&D PROGRAMS ON MATERIAL SCIENCE, CELLULAR AND MOLECULAR BIOLOGY. LASER AND ELECTRO-OPTICS INFORMATION TECHNOLOGY MEDICAL SCIENCES AND HUMAN GENOME RESEARH. GEOPHYSICES

WHY R&D ALLIANCE WITH INDIA ?

US GIANT GE HAS A LARGE R&D SET UP IN INDIA. ITS CEO OBSERVED INDIA IS A DEVELOPING COUNTRY, BUT IT IS DEVELOPED COUNTRY AS REGARDS ITS SUPERB SCIENTIFICINFRASTRUCTURE. IT IS FOR THIS RERASON THAT WE WANT TO SHIFT A PART OF GES DEVELOPMENT EFFORT TO INDIA. LOW COST OF R&D.

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INDIA IS THE SECOND LARGEST WORLD MARKET. TEHREFORE, THE COMPANIES THROUGH THEIR PRODUCTS SALE EARN MORE THAN WHAT IS SPENT BY THEM ON R&D AND THEIR PRODUCTION CENTER IN INIDA. INDIA ALLOW FOREIGN INVESTORS 100% FOREIGN OWNERSHIP AND FULL REPATRIATION OF CAPITAL AND PROFITS. INDIA HAS ALSO ACCEPTED R&D PROGRAMS UNDER THE CHAPTER ON TRADE IN SERVICES OF WTO.

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INDIA HAS A LARGE POOL OF ENGLISH SPEAKING SKILLED MANPOWER. INDIAS TELECOM INFRASTRUCTURE IS COMPARABLE TO THAT IN MANY COUNTRIES. INDIAS GEOGRAPHICAL LOCATION ENABLES 24X7 SERVICE OFFERING. GOOD REGULATORY FRAMEWORK. MORE THAN 100 R&D CENTERS SET UP IN INDIA BY MNCs.

R&D ORGAINZATIONS
ORGANIZATION STRENGTH CSIR LABS AND RES. ICAR AGRI. UNIV. R&D INST. ICMR R&D INST./CENT. NUMBER

1.

118

SCIENTISTS 10, 934

1.

43 89 26

SCIENTISTS 6,281

1.

SCIENTISTS 732

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1.

1.

1.

DBT R&D INST. DRDO R&D INST. DAE. R&D INST. DOS ISRO 10,000

8
52 17

SCIENTISTS 700
SCIENTISTS 6,500 SCIENTISTS 5,000

SCIENTISTS

INSTITUTIONS OF HIGER EDUCATION (2001)

1.

1.

HIGHER EDUCATION NUMBER STRENGTH UNIVERSITIES 253 FACULTY 411,628 COLLEGES 13,150 STUDENTS 8,399,433 SC STUDENTS 1,670,273 ENGINEERING EDUCATION HIGHER EDUCATION &RES. IITs 7 FACULTY 2,500 STUDENTS 23,000 ENGG.COLLEGES STUDENTS 463,965 DEGREE 1347 DEGREE 262,882 DIPLOMA 1228 DIPLOMA 201,093

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1.

MEDICAL EDUCATION MEDICAL COLLEGES 189 3,181

STUDENTS 18,168 PG STUDENTS PG DIPLOMA

1,316

INDIAN SOFTWARE INDUSTRY

EXPORT EARNINGS IN 2003-04 US $ 12.7 BILLION GROWTH RATE 26% DESPITE SLOWDOWN. EXPORTS TO 95 COUNTRIES. MAJOR COUNTRIES: USA, UK, GERMANY, FRANCE, JAPAN, CHINA HONKONG, TAIWAN AND SOUTH KOREA. THE CLIENTS INCLUDE MORE THAN 250 OF FORTUNE 500 COMPANIES.

ESTIMATED EXPORTS FOR 2008

SERVICES US $ IN BILLION __________________________________________ IT SERVICES 23 SOFTWARE PRODUCTS 8 IT-ENABLED SERVICES 15 E-BUSINESS 4 TOTAL 50

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The above data shows how development of software industry in India has greatly contributed to promotion of specialized services in sectors of finance, banking solutions, security knowledge, management and customer relation services where expertise is sought from India by overseas countries.

SOTWARE ADVANTAGE INDIA

LOW COST QUALITY MANPOWER HIGH QUALITY WORK DELIVERY. WELL-DEVELOPED INFRASTRUCTURE SUPPORT TO AID CONNECTIVITY AND DATA TRANSFER. GROWTH OF INFORMATION TECHNOLOGY ENABLED SERVICES (ITES)

INDIAN PHARMA POLICY- 2002

100% FOREIGN INVESTMENT AUTOMATICALLY PERMITTED. FOREIGN TECHNLOGY AGREEMENTSAUTOMATIC APPROVAL THROUGH RESERVE BANK OF INDIA. ABOLITION OF INDUSTRIAL LICENSING FOR ALL BULK DRUGS, INERMEDIARIES AND FORMULATIONS.

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DRUG CONTROL RESTRICTED ONLY TO ESSENTIAL DRUGS TO DEAL WITH DISEASES LIKE TB, MALARIA AND DIABETES (INSULIN). THE ONLY EXCEPTIONTHE DRUGS BASED ON DNA TECHNOLOGY HAVE TO BE CLEARED FOR POTENTIAL HEALTH AND ENVIRONMENTAL RISKS.

EMERGING TRENDS

FOREIGN DIRECT INVESTMENT (FDI) PERMITTED UP TO 100% THROUGH AUTOMATIC ROUTES. INDIA AGREED TO IMPLEMENT A PRODUCT PATENT REGIME WITH EFFECT FROM 1ST JUANUARY 2005 AS PER WTO AGREEMENT. MNCs HAVE STARTED STRENGTHENING THEIR BUSINESS IN INDIA. THEY HAVE INCREASED STAKES IN EXISTING VENTURES OR SET UP NEW WHOLLY OWNED SUBSIDIARIES (e.g. PFIZER)

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INCREASED FOCUS BY INDIAN PHARMA COMPANIES ON R&D. R&D CAN BE PERFORMED IN INDIA AT 15-20% OF THE COST IN EUROPE OR USA. ON DOLLAR BASIS THE COST ADVANTAGE IS ABOUT 10-15 TIMES. THE INDIAN COMPANIES ARE PURSUING CONTRACT MANUFACTURING FOR SUPPLY OF BULK DRUGS/INTERMEDIATES FOR MNCs.

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WITH LOW COST OF PRODUCTION, INDIA HAS BECOME A BASE FOR OUTSOURCING DRUGS. INDIAN COMPANIES SETTING UP SUBSIDARIES ABROAD OR SEEKING STRATEGIC ALLIANCES TO EXPLORE TREMENDOUS OPPURTUNITIES IN THE GENERICS MARKET EXPECTED IN THE NEXT 5-10 YEARS.

INDIA--A GLOBAL HUB FOR TESTING AND DEVELOPMENT OF NEW DRUGS

PHARMA INDUSTRY TODAY TAKES $300-700 MILLION AND 10-15 YEARS TO INTRODUCE A NEW DRUG IN THE MARKET. A LARGE POOL OF WELL QUALIFIED AND SKILLED MANPOWER AVAILABLE AT LOW COST. AVAILABILITY OF LARGE NUMBER OF PATIENTS WITH ALL FORMS OF DISEASES. ALSO PATIENTS AVAILABLE WHO HAVE NOT RECEIVED ANY OTHER MEDICAL TREATMENT.

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CLINICAL TRIALS COST HALF OR ONE THIRD OF A DEVELOPED COUNTRY AND TAKES MUCH LESS TIME TO COMLETE. REGULATIONS PERMIT TESTING OF NEW DRUGS WITH NECESSARY PROTECTIVE MEASURES.

BIOTECHNOLOGY IN INDIA

SKILLED MANPOWER GRADUATES 3,000,000 POST-GRADUATES 70,000 Ph.Ds 1,500 CONVENTIONAL BIOTECH. COMPANIES 110 MODERN BIOTECH. COMPANIES 60 BIOTECH ASSOCIATED INSTITUTIONS RESEARCH INSTITUTEIONS 241 INDUSTRIES 328

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CONSUMPTION OF BIOTECH. PRODUCTS IN 1999

US $ 1.79 BN.
US $ 3.72 BN. US $ 4.27

PROJECTED CONSUMPTION IN 2005 PROJECTED CONSUMPTION IN 2010 BN.

MAIN ACTITIVITES AND POTENTIAL

RICH BIODIVERSITY-INDIA HAS 7.76% OF TOTAL MAMMAL SPECIES 12.6% OF BIRD SPECIES, 11.7% OF FISH AND ROUGHLY 6.0% OF TOTAL FLOWERING PLANTS PRESENT IN THE WORLD WITH EXCELLENT AGRO-CLIMATIC CONDITIONS. THIS IS A GREAT RESOURCE FOR RESEARCH AND DEVLOPMENTAL ACTIVITIES IN BIOTECHNOLOGY. FOCUS GENOMICS, RECOMBINANT DNA, TRANSGENICS. STEM CELL RESEARCH AND NEW DRUGS DEVELOPMENT.

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VACCINE

MARKET VALUED GROWTH RATE

AROUND US $ 100 Mn.

20%

DIAGNOSTICS

ANIMAL HEALTH
ENZYMES

MARKET DEMAND US $ 50 Mn. DEMAND GROWING RAPIDLY BIOTECHNOLOGY MARKET RAPIDLY GROWING 70% REQUIREMENT IMPORTED MARKET GROWING WITH INCREASING AWARENESS

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PHARMA INDUSTRY

FERMENTATION INDUSTRY

TODAY 40-45% OF ALL DRUG ORIGINATE IN BIO-TECHNOLOGY BUT IN THE NEXT DECADES BIOTECHNOLOGY WILL HAVE A MUCH GREATER ROLE ON THE PRODUCTION OF DRUGS AND PHARMACUETCALS. MODEST FERMENTATAION INDUSTRY MAINLY BREWERIE, ANTIBIOTICS AND CHEMICALS BUT GREAT POTENTIAL IN THE AREAS OF FOOD PROCESING, PHARMA AND CHEMICALS.

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FOOD PROCESSING INDUSTRY

INDIA IS THE LARGEST PRODUCER OF MILK AND SECOND LARGEST PROCUCER OF FRUITS, VEGETABLES AND FOODGRAINS. BUT PROCESSING IS LIMITED TO ONLY 2% OF FRUITS AND VEGETABLES AND 15% MILK. THUS, TREMENDOUS SCOPE FOR THE DEVELOPMENT OF PROCESSING OF MILK FRUITS &VEGETABLES, MEAT, FISH AND FOODGRAINS

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AGRI-BIOTECH.

CHARACTERS. TRANSGENICS DROUGHT

-GENETICALLY ENGINEERED SEEDS AND PLANTS HAVE A MARKET OF US $ 250 Mn.. -DEVELOPMENT OF TRANSGENICS FOR QUALITY AND -DEVELOPMENT OF WITH RESISTANCE TO AND OTHER ABIOTIC STRESSES. -TISSUE CULTURE FOR PROPAGATION OF

PLANTS.

-DEVELOPMENT OF MEDICINAL AND

OTHER AROMATIC PLANTS.

ADVANTAGE INDIA

NO INDUSTRIAL LICENCE REQUIRED FOR FOODS EXCEPT ALCHOHLIC PRODUCTS. NATIONAL POLICY TO INCREASE FOOD PROCESSING FROM PRESENT 2% TO 10% BY 2010. INVESTMENT OPPORTUNITIES: UPTO 51% FOREIGN EQUITYAUTOMATIC APPROVAL. UPTO 100% EQUITY ALLOWED ON APPROVAL UNDER FOREIGN DIRECT INVESTMENT (FDI) SCHEME EXCEPT MALTED FOOD, ALCHOHOLIC BEVERAGES. CUSTOM DUTIES SUBSTANTIALLY REDUCED ON PLANT AND EQUIPMENT, RAW MATERIALS AND INTERMEDIARIES.

CHEMICALS PESICIDES AND ALLIED INDUSTRIES

INDIA IS SELF-SUFFICIENT IN MEETING LOCAL DEMANDS. CHEMICAL INDUSTRY IS HIGHLY HETEROGENIOUS COVERING SECTORS LIKE ORGAINIC, INORGANIC CHEMICALS, DYESTUFF, PAINTS , PESTICIDES, ETC. THE PESTICIDE INDUSTRY HAS DEVELOPED SUBSTANTIALLY CONTRIBUTING TOWARDS AGRICULTURE AND HEALTH.

PETROCHEMICALS INDUSTRY
RAPID STRIDES IN TERMS OF PRODUCTION AND CONSUMPTION (FIGS IN KT) CATEGORY 1997-98 1998-99 1999-2000 (Actual) (Actual) (Actual) Prod. Cons. Prod Cons Prod. ________________________________________________ SYNTHETIC 1246 1257 1379 1420 1525 FIBRE POLYMER 2016 2398 2189 2719 2805 SYNTHETIC 62 105 54 106 55 RUBBER SYNTHETIC 251 245 282 272 320 DETERGENTS

EXPORT OF CHEMICALS
STEADY GROWTH IN EXPORTS OF CHEMICALS DURING THE LAST THREE YEARS . 1996-97 199798 (US $ IN MILLIONS)
________________________________________________________ DYES AND DYE INTERMEDIATES 388.8 445.6 BASIC ORGANICS & INORGANICS 416.2 439.0 CHEMICALS INCLUDING AGROCHEMICALS