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Indian pharma hopes for policy-level clarifications & simplifying APA procedures in Union Budget 2025
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Nandita Vijayasimha, Bengaluru
January 18 , 2025
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Indian pharmaceutical industry, which is a significant contributor to the country’s economy, has outlined its expectations for the Union Budget 2025 which will be presented in Parliament on February 1 by finance minister Nirmala Sitaraman. Industry leaders are advocating for policy-level clarifications and simplified procedures, particularly in the realm of Advance Pricing Agreements (APAs), to ensure a more business-friendly environment.
Representing the sector of research-based global pharmaceutical companies in India, Anil Matai, director general, Organisation of Pharmaceutical Producers of India (OPPI), said the need of the hour is policy-level clarifications, such as expanded exemptions for life-saving drugs and oncology medications from import duty which are vital for reducing treatment costs. Simplifying APA procedures, including timelines for swift case resolution are also important. Sharing APA authorities’ search processes for better negotiations and ensuring timely renewals without procedural redundancies will also help improve efficiency and ease of doing business.
"To strengthen India's healthcare ecosystem and drive inclusive growth, the upcoming budget must prioritize increased public spending on health initiatives. This includes expanding coverage under the Ayushman Bharat scheme to missing middle, upgrading existing Centers of Excellence, establishing new ones, and enhancing primary healthcare infrastructure,” he added.
Furthermore, expansion of the scope of Section 115BAB of the Income Tax Act, 1961 to companies solely engaged in pharmaceutical R&D and providing a 200% deduction rate on R&D expenditures will encourage innovation in the pharma space. Also, mandatory timelines for disposing of appeals particularly by the Income Tax Appellate Authorities and removing turnover criteria for safe harbour provisions for R&D will also encourage innovation and investment. These recommendations are essential to build a robust, equitable, and patient-focused healthcare framework for India’s future,” said the OPPI chief.
From a clinical research perspective, Sanjay Vyas, president and managing director, Parexel India said that India's pharmaceutical and clinical trials industry is experiencing rapid growth, positioning itself as a key global player. As discussions around phase 1 clinical trials intensify, one key area of focus could be expanding government research grants and financial incentives to include private contract research organizations (CROs). Currently, these grants are limited to academic institutions, but extending support to private CROs will encourage their active involvement in early discovery and clinical research.
Building upon the foundation laid by previous initiatives, the Union Budget 2025 could prioritize targeted incentives for AI in research and development, which will accelerate innovation in drug discovery, clinical trials, and personalized patient care. Also, continued efforts in the establishment and maintaining a single, unified regulatory authority for biopharmaceuticals to simplify compliance, minimise delays, and enhance the ease of doing business will foster growth and attract greater investment in the sector, said Vyas.
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