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R & D IN INDIA T opi c- Research & Development in INDIA SUBMIT TED T O- COMMERCE DEPT SUBMITTED BY - Meenakshi 8027 Prabhjot 8030
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Transcript of Copy of R&D
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R & DIN
INDIA
Topic- Research &
Development in INDIA
SUBMITTED TO-
COMMERCE DEPTSUBMITTED BY-
Meenakshi 8027
Prabhjot 8030
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What is the meaning of RESEARCH AND DEVELOPMENT ????
??
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PRODUCT
SERVICES
R & D means->
Discovering new knowledge about
PROCESSES
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and then applying that
knowledge to create new and improved products,processes, and services that fill market needs .
CONTINUED
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I NNOVATE
DO THE NEW
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F EW EXAMPLES-
EARLY MANINVENTED
WHEEL & FIRE
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TELEPHONES
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MOBILE
PHONES
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DE FI N I T I ON O F R&D BY Organization for Economic Co-
operation and Development
R & D refers to-
"creative work undertaken on a systematic basis in or der to
increase the stock of k nowledge,
including k nowledge of man, culture and society, and the use
of this stock of k nowledge todevise ne w applications"
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PRIMARY TYPES OF PRIMARY TYPES OF
R&DR&DBASIC
RESEARCHAPPLIED
RESEARCH
DEVELOPMENTRESEARCH
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NEED F OR R&D 1.
To achieve economic
development
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Continued
To create new and
improved technology
2.
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continuedcontinued
To meet presentCompetition
3.
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ContinuedContinued
To become a global player
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WORLD·SWORLD·S BESTBEST R&DR&D
COMPANIESCOMPANIESy IBMy APPLEy General Electricy 3
My TOYOTAy DUPONTy MICROSOFT
y GOOGLEy GENETECHy DOW CHEMICAL
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WHAT I N WHAT I N- -HOUSE R&D CENTER·S? HOUSE R&D CENTER·S?
These are those centers who areconducting R&D functions within thegeographical area of their country.
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Benefits available for "In Benefits available for "In- -househouse
R&D Centers" of companies«.R&D Centers" of companies«.Duty free import of specified goods
150% of the total expenditure whether
Revenue or Capital in nature Weighted Deduction in I ncome Tax for 3 years & more.
Commercial R&D companies eligible for 10yrs tax holiday
Other benefits²excise duty waiver for 3 yrs ,custom and excise duty
exemption , state subsidy
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continuedcontinued
I T sector can avail 150% weighted deduction on R&D
I ncome tax exemption @ 125% to Donations made to approved Scientific and I ndustrial Research.
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F inancial and other incentives F inancial and other incentives To R & D Centre To R & D Centre
off of revenue expenditure onR&D;
Write off of capital expenditure on
R&D in the year the expenditure incurred;
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Continued
Weighted tax deduction of 125% tothe sponsor of sponsored research pr ogrammes in univer sities, IIT·s andappr oved national laboratories.
Weighted tax deduction @ 150% onR&D expenditure incurred in the
appr oved in-house R&D centre of Allmanuf acturing companies minussmall negative list
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Research and development spending is often listed as a separate item in a company's financial statements .
R&D costs are usually expensed as incurred .
SOME INPORTANT POINTSSOME INPORTANT POINTS
RELATED TO R&D EXPENSESRELATED TO R&D EXPENSES
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Manufacturing units having Manufacturing units having ´In House´In House
R & D CentreµR & D Centreµ can avail benefits of can avail benefits of weighted deduction of Income Tax if : weighted deduction of Income Tax if :--
T he R&D Centers is holding recognition.1
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continuedcontinued
T he R&D Centers is exclusively engaged in research and development in any areas :
2
1.Bio-Technology2.Dr ugs3.Pharmaceuticals4.Seeds Manuf acturing Industr y5.Electr onics Equipment
6.Computer s7.Telecommunication Equipment
8.Chemicals9.Automobiles & automobiles components
10.Aviation Aer ospace
11.Non-f err ous Metals etc««
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´MAJOR SECTORS IN R&Dµ´MAJOR SECTORS IN R&Dµ
Chemical Industr y
Electr onics, IT and Telecom
Indian auto industr y
Pharmaceuticals andBiotechnology
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CONTRIBUTION OF VARIOUSCONTRIBUTION OF VARIOUS
SECTORSSECTORS
1. Auto industr y
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
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ÑMaruti Suzuki India to expand
research and development
MARUTI suzuki is planning to increase R&Dstrength to 1000 people by march,2010 , currently it is 720 people.
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ÑÑMar uti for ne w Research andMar uti for ne w Research and
Development f acility inDevelopment f acility in HarayanaHarayana
Maruti Suzuki I ndia plans to set up a new
Research and Development (R&D) centre that will include a testing
track in the same premises in Harayana.
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ÑÑTATA MOTORSTATA MOTORS
Their annual expenditure
on R&D is appr oximately 2%of their tur nover .
They have also set up t wo in-house Engineering Research Centres
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ÑÑ"India is emerging as one of the"India is emerging as one of the prominent destinations for global prominent destinations for global
automakers to set up their R&Dautomakers to set up their R&Dcenters." centers."
Reasons being-
(Lower costs of operation.
( Availability of talent, especially inI.T space.
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continuedcontinued
(Ability to carry out tests over
different [and tough] terrains and
weather conditions and a potentially
large domestic market that can
justify the R&D investment.
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((Pharmaceuticals Sector Pharmaceuticals Sector
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Investments by Investments by govt govt in in PHARMA SEC TO R PHARMA SEC TO R
y Indian government has announced to
invest nearly Rs 2,500 Crore and a similar
amount from private players to boost up
research and development (R&D)activities and to promote innovation in
the pharmaceutical sector.
y At present, a total of Rs 2,000 Crore isspent in research and development
activities in India.
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((5050%% of the R&D investment inof the R&D investment in
the country was done in thethe country was done in the
pharmapharma sector. "sector. "RanbaxyRanbaxy LaboratoryLaboratory
alone contributesalone contributes 1010%% of the totalof the total
R&D carried out on India".R&D carried out on India".
RANBAXY LABORATORY
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Ranbaxy spent aboutRanbaxy spent about 77% of its $% of its $11
billion sales duringbillion sales during 20042004
(calendar year) on R&D, while Dr.(calendar year) on R&D, while Dr.
Reddy's Laboratories spentReddy's Laboratories spent 1414% of % of its sales of $its sales of $446446 million in themillion in the
fiscal year that ended last March.fiscal year that ended last March.
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Electr onics, IT and TelecomElectr onics, IT and Telecom
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ÑÑLG India to spend RsLG India to spend Rs 400 400 cr cr
on R&Don R&D
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ÑÑTata Tata DoCoMoDoCoMo Plans R&DPlans R&D
Unit In India Unit In India
DoCoMo, is planning to set up a ne w globalresearch and development (R&D) centre in
India.DoCoMo has altogether f ive R&Dcentres acr oss the globe ² t wo in Japan andone each in the US, Eur ope and China.
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ÑÑNokia has three R&D centresNokia has three R&D centres
in Indiain India
one each in Bangalore, Mumbai andHyderabad. The center s are focused on next-generation packet-switched mobile technologies and communications solutions toenhance corporate pr oductivity.
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ÑÑDell opens ne w R&D center Dell opens ne w R&D center
in India 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.
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SHARE OF R&D IN INDIA
OUT OF G DP
ON march 12th,2008 S&T minister ´Kapil Sibalµ I nformed Rajya Sabha-:
R&D spending aspercentage of GDP inIndia is only 0.8%.
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((F oreign R&D centres in I ndia: F oreign R&D centres in I ndia: I s I s there any positive impact? there any positive impact?
MNC has both positive and negative impact
on host countries .
Positive impacts are-
ÑForeign R&D centres
can contribute to the hostcountry·s innovation system
through their linkages with the
host country·s institutions
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ContinuedContinued
Ñcompetitiveness among the local
firms,
Ñlocal firms can have access to high
technology throughpartnership/collaboration.
Ñ Setting up of specialized training
centres;
Ñ More job opportunities
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Negative impactsNegative impacts--
brain drain-
Migration of human resources
Greater competition to domestic firms
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Share of Public & Private sectorShare of Public & Private sectorin R&D as %age of G DP in INDIA in R&D as %age of G DP in INDIA
20%
80%
PRIVATE SECTOR
PUBLIC SECTOR
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Share of R&D in other countries out Share of R&D in other countries out of GDP and comparison with India IN of GDP and comparison with India IN 2006 2006
2.47
1.61
3.5
1.03
AMERICA
CHINA
JAPAN
INDIA
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Why I ND I A is lacking Why I ND I A is lacking
in in R&D R&D Spending??? Spending???
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ADVANTAGE S ADVANTAGE S
COMP AN Y G ROW T H.
H IG H E R PRO FIT MA R GIN S.
U TI L I S ATI O N O F E XC E SS C A P ITA L.
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T hanks
