R&D Incentives


The new Industrial Policy, read with T-IDEA (Telangana State Industrial Development and Entrepreneur Advancement) Incentive Scheme 2014, has come out with an attractive range of incentives for setting up of new industrial enterprises. However, the government recognizes that the Life Sciences industry, characterized by high investments and long gestation periods, needs special focus to help sustenance and growth of the sector. Hence, certain additional incentives are being introduced to foster the development of the sector, while increasing long-term capacities to produce and commercialize new ideas. The life sciences industries will get the following special benefits in addition to the benefits available in T-IDEA 2014.

Incentives to R & D

  1. Investment Subsidy – With the objective of promoting R & D activities, the T-IDEA 2014 envisages an Investment Subsidy at the rate of 15 per cent of the fixed capital investment limited to Rs. 20 lakh. However this benefit is limited to micro and small R & D set-up within the municipal corporation limits. Now it is proposed to offer investment subsidy of 15 percent on initial fixed capital investment limited to Rs. 20 Lakh irrespective of investment category. The progress of the R & D activity will be reviewed & recommended by State Life sciences council annually and the subsidy will be equally spread over 5 year period.

  2. Lease rentals – 25 per cent subsidy on lease rentals for the plug-and-play Lab space up to 5000 square feet, leased by life sciences start ups in Genome Valley and other notified zones (both Public & Private promoted) limited to Rs.5 Lakh per annum for a period of three years.

  3. Special Financial Incentives for Research – In order to promote innovation and applied R&D in the research & academic institutions, the Government of Telangana will offer special incentives for the organizations engaged in applied research and development activities.

    1. Co-financing of industry sponsored research – Government will finance research carried out by Telangana based research institutions, with funding from private sector companies. The extent of funding will be a maximum of Rupees 25 Lakh per project per year which will be reviewed, renewed and approved by the State Life Sciences Council constituted by the Government. To be eligible for the co-financing scheme, the applicant institution should adequately demonstrate social-economic benefits to the State in terms of employment generation, manufacturing localization, benefits to allied sectors, etc.

    2. Collaborative Research Grant – The scheme aims at accelerating collaborative research for market driven product development between scientists from 2 or more Telangana based research institutions and/or academic institutions. Government would offer financial assistance to the extent of Rupees 25 Lakh per project per year towards covering scientist and technician cost, which will be reviewed, renewed and approved by the State Life Sciences Council constituted by the Government.

    3. Attracting Global Talent – To attract global talent for conduct of breakthrough research in the State, the Government proposes to handout scholarships to incentivize the joint research program of a local institution with researchers pursuing post doctoral India specific life sciences research in top 100 global institutes/universities. Government will provide financial support of not exceeding INR 5 Lakh for a period of 6 months. The scheme will also be applicable to international scientists / post doctoral fellows interested in pursuing sabbatical research work at a local research institute. The programme and engagement of the researchers should be approved by the Life Sciences Council.

Incentives for Manufacturing Activities

  1. Power – Life sciences industries/units are highly power-intensive and need assured and uninterrupted supply of electricity. Therefore, the state government declares the life sciences industries as continuous process industry and all industries manufacturing life saving drugs would be exempted from statutory powercuts .

  2. Technology Acquisition Fund – Technology development and upgradation being very critical for sustained growth in the area of life sciences, the Government will establish a technology acquisition and development fund, for acquisition of high impact technologies patented not earlier than 3 years, which can ultimately result in localization of manufacturing and further to large scale employment generation. The fund will be limited to micro and small enterprises for part reimbursement of technology acquisition costs limited to Rs. 20 Lakh for the purpose of acquiring appropriate technologies. State Life Sciences Council will approve the list of technologies every year. An annual budget of Rs. 2 Crore will be instituted. The salient features of this package are as follows :-

    1. The State proposes to develop and establish a central database of existing, new and ready to transfer technologies including their status, source and availability.

    2. Life Sciences directorate will facilitate transfer of technologies, available at regional, National and international level, to MSMEs.

    3. The acquisition of technology can be in any form including purchase of drawings and design,technology development through engaging Experts/institutions, technology development through any Research and Development Institution and/or Consultancy form or any other method.