Jan 17, 2020
Indian seed industry has urged the govt for rising weighted tax deduction for in-house research and development (R&D) doings from 100 per cent to 200 per cent as was the case before the financial year 2016-17.
In a pre-budget recommendation, Federation of Seed Industry of India (FSII), a lobby group for big Indian and multinational seed firms, urged the government to restore the 200 per cent tax deduction which was prevalent in the past so that India can emerge as a big player in the global seed market.
“The income tax deduction for the in-house R&D has been reducing over the last few years. Through an amendment as per Finance Act 2016, the weighted deduction was reduced to 150 per cent effective from April 1, 2017 through March 31, 2020 and it indicated a further reduction to 100 per cent from April 1, 2020”, FSII said.
This applies to the eligible companies engaged in the business of bio-technology or in any business of manufacture or production of any article or thing that incurs any expenditure on scientific research (excluding the cost of land) on in-house R&D facility as approved by the Department of Scientific and Industrial Research (DSIR).
According to Shivendra Bajaj, FSII Executive Director, as compared to developed economies, R&D investment in India is very low and stands at around 0.7 per cent of GDP. It cannot be ignored that R&D is critical for new technology development, innovations and to achieve the goal of $ 5 trillion economy. The government will have to encourage higher R&D investment to address emerging challenges of climate change, stagnant yields, increase food production and nutrition needs of the country.
Now seed export from India is around Rs. 1,000 crore while the global seed trade is about Rs. 1,00,000 crore ($14 Billion). By 2028, India can aim for at least 10 per cent share of this trade, which is approximately Rs. 10,000 crore, he said.
Bajaj thinks, countries like Chile, Argentina and South Africa dominate the global seed trade as they have positioned themselves as suppliers of reliable quality of seeds. India too has a well-developed seed industry, varied agro climatic conditions, seed production expertise and the necessary infrastructure which can make India a global seed export hub.
For this to happen, India needs to develop a conducive policy support. For instance, varieties such as custom production of both GM and non-GM seeds and production of export-oriented seeds should be exempted from registration. Export of seed produced from India should be freely allowed without any delays and there should be time bound approvals from National Biodiversity Authority (NBA) for export of these Indian varieties.
A national policy on seed exports should be developed for a smooth process between Central government, State governments, NBA, Genetic Engineering Appraisal Committee and ports. A special cell under the Ministry of Agriculture should be formed to deal with export promotion and facilitation.
It is also crucial to create a Seed Export Promotion Council with representatives from the Centre, States, industry, scientists and other stakeholders. Export zones with adequate infrastructure should be set up closer to dry ports, where export- oriented processing and packing facilities can be set up by the industry, the FSII statement said.