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FSII recommends making India global seed production hub & pushes for 200% deduction of R&D expenditure in the seed industry

The income tax deduction for the in-house R&D has been reducing over the last few years, it said. Through an amendment as per Finance Act 2016, the weighted deduction was reduced to 150% effective from April 1, 2017 through March 31, 2020 and it indicated a further reduction to 100% from April 1, 2020.

, ET Bureau|
Last Updated: Jan 16, 2020, 07.38 PM IST
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Currently the seed export from India is around Rs 1000 crore , while the global seed trade is about Rs 1 lakh crore.
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New Delhi: The Federation of Seed Industry of India (FSII) has urged the Centre to restore the 200% income tax deduction (under the section 35 (2AB) of the Income Tax Act, 1961) for the in-house Research and Development (R&D) expenditure in seed industry in the upcoming budget.

The income tax deduction for the in-house R&D has been reducing over the last few years, it said. Through an amendment as per Finance Act 2016, the weighted deduction was reduced to 150% effective from April 1, 2017 through March 31, 2020 and it indicated a further reduction to 100% from April 1, 2020.

The Act 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 research and development (R&D) facility as approved by the Department of Scientific and Industrial Research (DSIR).

Shivendra Bajaj, executive director, FSII said, “As compared to developed economies, R&D investment in India is very low and stands at around 0.7% 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.”

Countries like Chile, Argentina and South Africa dominate the global seed trade as they have positioned themselves as suppliers of reliable quality of seeds, added Bajaj. 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.

Currently the seed export from India is around Rs 1000 crore , while the global seed trade is about Rs 1 lakh crore. By 2028, India can aim for at least 10% share of this trade, which is approximately Rs 10,000 crore, said Bajaj.

Further, to make India an export hub, FSII recommends that a conducive policy support should be provided by the government. "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 however, registration should be mandatory for seed produced for both domestic and export markets. 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,"said Bajaj.

Further, a dry port facility for quick movement of seeds should be built closer to the production centre such as Bangalore, Coimbatore, Hyderabad, Aurangabad, Ahmedabad, he said.
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