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Home » Indian Import Duty Cuts Not Big Win for Drug Multinationals
Indian Import Duty Cuts Not Big Win for Drug Multinationals
Leading drug companies operating in India, including multinational firms, have welcomed a reduction in import duties from 20% to 15% in the country's latest budget. However, many have been left wondering if other budget changes will offset any significant improvement in operating conditions for the industry.
The cuts amount to a reduction in India's corporate tax rate to roughly 33%, although other measures, including changes to the deprecation rate, will offset much of this improvement. Local companies claim that as the industry is not currently capital-intensive, measures reducing import duties on nine items of drug industry equipment to 5% will affect relatively few firms, or at least those who do not already have such machinery.
Further, local companies have noted that budget tax breaks on R&D will only last for a further two years, and will be unlikely to provide anything other than a short-term boost to discovery work, in which timeframes are clearly longer than many more traditional business activities in the Indian drug sector.
KEYWORDS Daily International Pharma Alert
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