innovation and patents - august 2013

7/29/2019 Innovation and Patents - August 2013

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Source: Planning Commission, Aranca ResearchNote: R&D - Research and Development

Seventh-largest R&Dinvestor

In 2012, India had the worlds seventh-largest annual R&D investment, accounting for 2.8per cent of global R&D expenditure; this is expected to increase to USD45.2 million by2013, accounting for 3.0 per cent of global R&D spending

Pharma sector drivingR&D growth

Indias pharmaceutical industry, which accounts for about 1.4 per cent of the global

pharmaceutical industry in value terms and 10 per cent in volume terms, is expected toremain a major R&D growth driver

Rapidly growingoverseas investment

Cumulative overseas direct investments by India has expanded at a CAGR of 47.4 percent to USD146 billion during FY13 from USD21 billion in FY06

Worlds sixth most

innovative country India stood sixth in terms of the most "innovative" country in General Electric's Annual

Global Innovation Barometer in January 2013


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The engineering sector is delicensed;100 per cent FDI is allowed in thesector

Due to policy support, there wascumulative FDI of USD14.0 billion intothe sector over April 2000 February2012, making up 8.6 per cent of totalFDI into the country in that period

Growing demand

Source: 2012 R&D spending estimate by Battelle, Automotive Research Association of India, Aranca ResearchNotes: IPR - Intellectual Property Rights, CoE - Center of Excellence, PPP - Public Private Partnership, TRIPS - Trade Related Aspects of

Intellectual Property Rights, NMITLI - New Millennium Indian Technology Leadership Initiative, E - Estimate, NIC - National Innovation Council

Robust demand

Rising income and evolvinglifestyles have led to higherdemand for aspirational products

Indian companies investments inR&D is not surprising given theimportance of innovation to

sustain competitive edge

Attractive opportunities

Vast opportunities in IT,pharmaceuticals, automobiles,biotechnology and agriculture

India is the largest exporter ofIT products and has the thirdlargest pharma sector with afast growing contract researchsegment

Policy support

PPP for promoting exchange ofscientific knowledge and R&D

Strengthening educationalinfrastructure

Amendments to the Patents Act(1970) to make it TRIPS-compliant

Setting up of NIC in 2010

Adoption of Science, Technologyand Innovation Policy 2013

High ratings

Establishment of CoEs in variousareas; NMITLI initiative on PPP

basis Increased investments by private

players; setting up of R&D centers

During FY0713, IPR applicationsincreased at a CAGR of 11.8 percent from 137,900 to 269,500

2011

R&Dspending:

USD38billion

2013E

R&Dspending:USD45.2

billion

AdvantageIndia


5/44

Source: Korn/Ferry International, Asia-Pacific Research center, Stanford University, Aranca Research

Notes: TRIPS - Trade Related Aspects of Intellectual Property Rights, WTO - World Trade Organisation

Indian Patentsand Designs Act

(1911) Dependence on

bulk imports

Establishmentof CSIR, DRDO,ICAR, ISRO andIITs

Patents Act (1970)

Recognition ofprocess patents only

Restricted foreignownership in Indiancompanies

Focus on reverse

engineering amongpharmaceuticalcompanies

TRIPS under WTO(1995)

Amendments to thePatents Act (1970)to make it TRIPScompliant

Reintroduction ofproduct patents

Reduction in tariffand non-tariffmeasures

Easing FDI norms

Shifting focus inpharma towardsclinical researchand new drugdevelopment

Before 1970Introductory Stage

1970 to early 1990sIndigenisation

Stage

Early 1990s to 2005Liberalisation and

Transition Era

2005 onwardsGrowth Era

Augmentation of network of

centrally-funded institutionsand universities

Increase in R&D and exportsin sectors such as IT, pharma,electronics and automobiles

Innovations in automobilessuch as Nano, the worldsleast expensive car

Focus on discovery of newchemical entities by pharma

companies Numerous innovations from

rural India

Setting up of NationalInnovation Council

Adoption of Science,Technology and InnovationPolicy 2013


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Source: Department of Industrial Policyand Promotion, Aranca Research

Intellectual

Property (IP)

Patents

Trademarks

Geographical

Indications

IndustrialDesigns

LayoutDesigns

Plant Variety

Protection

Copyright


7/44

Source: Battelle, Aranca ResearchNotes: GERD - Gross Domestic Expenditure on R&D,

R&D - Research and Development

Forecasted Expenditure of Worlds Leading R&D

Investors in 2013 (USD Billion)In 2012, India was the seventh-largest country in terms ofR&D investments, up from eighth largest in 2011

It is expected to retain this position in 2013, with R&Dinvestments increasing to USD45.2 billion from USD38billion in 2011

32

39

42

45

51

58

91

162

220

424

Brazil

Russia

United Kingdom

India

France

South Korea

Germany

Japan

China

United States


8/44

Source: Battelle, Aranca ResearchNotes: CAGR - Compound Annual Growth Rate;PPP - Purchasing Power Parity, F - Forecast

R&D Spending in India (USD Billion)Indias share of global R&D spending rose to 2.8 per cent in2012 from 2.6 per cent in 2010 and is forecasted to reach3.0 per cent by 2013

Indias R&D investment growth is likely to outpace overallGDP growth. During 201013, R&D spending (in terms ofPPP) is expected to expand at a CAGR of 11.6 per cent toUSD45.2 billion, while GDP (in terms of PPP) would

increase at a CAGR of 7.8 per cent

The Planning Commission of India expects to double thegovernments R&D spending from the current 0.9 per centof GDP to 2 per cent by 2017

33

3840

45

0.80%

0.85%

0.85%

0.90%

0.75%

0.78%

0.81%

0.84%

0.87%

0.90%

0.93%

0

10

20

30

40

50

2010 2011 2012 2013F

R&D expenditure (PPP) AS a % of GDP -RHS


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Source: Reserve Bank of India, Battelle, Aranca Research

Cumulative Overseas Direct Investment(USD billion)

Cumulative overseas direct investments increased toUSD146 billion in FY13 from USD21 billion

This has led to significant amount of technology transferthrough industrial acquisitions

For instance, Tata Steels takeover of Corus brought with itmore than 80 patents and 1,000 researchers

21

38

56

100

125

146

FY08 FY09 FY10 FY11 FY12 FY13


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Source: Department of Industrial Policy and PromotionAranca Research

Break-up of Intellectual Property Rights (IPR)Applications (FY13)

During FY13, the total patent applications stood at 269.5thousand

Trademark applications accounted for the largest share (79per cent) of total applications at 212,900

Patent and design applications accounted for 17.6 per cent(47,300 applications) and 3.4 per cent (9,200) share,respectively

18%

3%

79%

Patent-LHS

Design -LHS

Trade markapplication -LHS


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Source: Department of Industrial Policy and PromotionAranca Research

Intellectual Property (IP) applications (000)During FY0713, intellectual property rights (IPR)applications increased at a CAGR of 11.8 per cent from137,900 to 269,500

Trademark applications expanded at a CAGR of 12.8 percent over FY0713 to 212,900

Patent and design applications rose at a CAGR of 8.6 percent and 8.9 per cent, respectively, during the same period

Growing IP application activity indicates increased in-houseR&D and innovation in India 0

50

100

150

200

250

300

0

50

100

150

200

250

FY07 FY08 FY09 FY10 FY11 FY12 FY13

Patent-LHS Design -LHS

Trade mark application -LHS Total IPR applications -RHS


12/44

Source: Zinnov Consulting, The Indian R&D Landscape, 2012

Notes: CAGR - Compound Annual Growth Rate,R&D - Research and Development,

MNC R&D Centers in IndiaThe number of MNC R&D centers in India has grown at aCAGR of 16.4 per cent to 871

Around 30 per cent of the top 1,000 global R&D spendingorganisations have centers in India

Most of the centers are located in metro cities Bengaluru,Delhi, Mumbai, Chennai and Hyderabad. However, MNCshave begun spreading out to tier-2 cities after 2005

Indias robust talent pool of over 200,000 engineers hasgrown at an average rate of 9 per cent over the last fiveyears; this has been supporting increased R&D activity

191

297

517

699

780

871

Pre 2000 2002 2004 2006 2008 2011

CAGR: 16.4%


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Source: Zinnov Consulting, The Indian R&D Landscape, 2012Notes: CAGR - Compound Annual Growth Rate,

R&D - Research and Development

MNC R&D centers Distribution in India (2012)Bengaluru (erstwhile Bengaluru) has 43 per cent of MNCR&D centers, followed by Mumbai and Pune at 19 per cent

Until 2005, Tier-1 cities were the favourite destination forMNCs due to the availability of rich talent, favourablepolicies, and better quality of life

However, post-2005, MNCs have started expanding to Tier-2 cities, as they offered benefits such as higher catchmentarea, lower attrition, and cost arbitrage

Bengaluru

43%

Mumbai/Pune19%

Hyderabad13%

NCR11%

Chennai10%

Others4%


14/44

Source: Financial Express, Value Notes, Aranca Research,

Notes: R&D - Research and Development, IT - InformationTechnology; CAGR - Compound Annual Growth Rate

R&D Outsourcing in India (USD Billion)R&D outsourcing has increased at a CAGR of 33.5 per centduring 200311 to USD13.1 billion

Companies across sectors (such as IT, consumerelectronics, personal devices, medical electronics, telecomand automobiles) are now offshoring complete productresponsibility

India has become one of the most preferred location forengineering offshoring

By 2020, USD42 billion worth of work related to R&D ofproduct engineering is expected to be outsourced to India

1.3

13.1

2003 2011

CAGR: 33.5%


15/44

Source: Organisational websites, Aranca Research

Notes: R&D - Research and Development

Organisation Business description

Council of Scientific and Industrial Research (CSIR)

CSIR is Indias largest R&D organisation, with 39 laboratories and 50 field stations. In FY12, CSIR had over1,872 active patents in India, 813 in the US, 328 in the EU, 147 in Japan and 829 in other countries

It is engaged in scientific industrial R&D for economic, environmental and societal benefits for the country

Its research areas span across aerospace, biotechnology, chemicals, energy, foods, informationdissemination, leather and metals, minerals and manufacturing etc.

Defence Research and Development Organisation (DRDO)

DRDO is engaged in design and development of weapon systems and equipment in accordance with therequirements of the military services

In 2012, DRDO had a network of 50 labs and establishments to carry out research. It has over 5,000 scientistsand about 25,000 other scientific, technical and supporting personnel

Its research areas include aeronautics, armaments, combat vehicles, electronics, instrumentation engineering

systems, missiles, materials, naval systems, advanced computing, simulation and life sciences

Indian Council of Agricultural Research (ICAR)

ICAR is one of the largest national agricultural organisations in the world. It consisted of 99 institutes and 53agricultural universities across India in 2012

It is the apex body for coordinating, guiding and managing research and education in agriculture, includinghorticulture, fisheries and animal sciences in India

*This list is indicative


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India Space Research Organisation (ISRO)

ISRO is engaged in development of space technology and its application to various national tasks

The organisation has 19 centers across India to pursue R&D activities

Its research areas include communication satellites for television broadcast, telecommunications and

meteorological applications, and remote sensing satellites for management of natural resources

Indian Council of Medical Research (ICMR)

ICMR is the apex body in India for the formulation, coordination and promotion of biomedical research andone of the oldest medical research bodies in the world

The council has a fleet of 21 institutes, six regional medical research centers and five units engaged inmedical research

The councils research priorities encompass the areas of communicable diseases, fertility control, maternaland child health, nutritional disorders, and non-communicable diseases such as cancer, cardio-vascular

diseases, blindness and diabetes

Centre for Development of Advanced Computing (C-DAC)

C-DAC is a premier R&D organisation of the Department of Information Technology (DIT)

It is engaged in research in the areas of supercomputers, applied electronics, technology, applications andhealth informatics.

CDAC has filed 16 patent applications in FY11





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Indian Institutes of Technology (IITs)

It is a group of autonomous engineering and technology oriented institutes of higher education

In FY11, IITs filed the highest number of patent applications amongst all the institutes and universities in India.IIT Bombay filed 77 patent applications in 2011, an increase of 400 per cent from that in 2006

National Dairy Research Institute (NDRI)

NDRI is engaged in research, teaching and extension activities in areas of dairy production, processing,management and human resource development

Its research activities focus on improving dairy productivity, innovating milk processing technologies anddisseminating information to the various stakeholders in dairy business to make dairying a self-sustainingbusiness

In 2012, R&D activities comprised 71 in-house and 46 externally funded research projects, including 20 NAIPprojects in consortium mode with financial outlay of USD7.1 million

Indian Institute of Science (IISc)

IISc is one of the earliest instances of PPP for a research institute in India

It is engaged in research in various departments of science such as biological, chemical, electrical,mathematical, physical and mechanical sciences

In FY10, the institute filed the third highest number of patent applications amongst all the institutes anduniversities in India



http://www.ndri.res.in/ndri


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The Energy and Resources Institute (TERI)

TERI is engaged in developing solutions to global problems in fields of energy, environment and sustainabledevelopment

The important research areas include biotechnology, earth science and climate change, technology

development, social transformation, and modelling and economic analysis

Institute of Life Sciences (ILS)

ILS undertakes basic and translational research in frontier areas of life sciences

The institutes research interests are in the areas of infectious disease biology, gene function and regulation,and translation research and technology development

Indian Institute for Advanced Studies (IIAS)

IIAS is a residential centre for advanced research in humanities, social sciences and natural sciences

Its major research areas include social, political and economic philosophy; comparative studies in philosophyand religion; education, culture and arts; natural and life sciences; and national integration and nation building

Source: Organisational websites, Aranca ResearchNotes: R&D - Research and Development



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Hindustan Unilever Limited

HUL is credited with innovations in product areas such as structured bar soap, fairness cream, zero alcoholsoap, poly-coated scouring bar for dishwashing, fortified salt, instant tea, critical components for a waterpurifying device, and value-added (nature care) tea

Worldwide, HUL has over 20,000 registered patents and patent applications

The company filed 57 patent applications and was one of the top Indian patentees in FY11

Tata Steel Limited

Tata Steel undertakes research in areas such as raw materials and coke, iron and ferro alloys, steel making,coated products, materials characterisation and joining, materials modelling and product design, andrefractory technology

The company filed 42 patents in FY12, taking its IP portfolio (filed and granted patents and copyrights) from 32in FY2000 to 493

Cipla Limited

Ciplas R&D division focuses on new product development and new drug delivery systems across a range oftherapies

In FY12, the companys total R&D spending stood at USD59.2 million, a growth** of 13.6 per cent from a yearago

In 2011, Cipla filed 260 patent applications across the globe of which 13 were filed in India

Source: Organisational websites, Aranca ResearchNotes: R&D - Research and Development, Growth** - In terms of INR



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Reaper WindrowerMachine

For easy and timelyharvesting ofsoybean crop

Prevents shattering

of soybean pods dueto non-availability oflabourers forharvesting the cropin time

Hand Operated WaterLifting Pump

For convenientwater-lifting at agood discharge rateand low cost

The pump was builtin response to adearth of availablepumps that could beafforded by smallfarmers

Bamboo LatheMachine

For stripping off theouter covering ofbamboo to developa smooth surface for

making interiordecoration and utilityitems

Reduces the timeand labour requiredto do the jobmanually

Pedal OperatedWashing Machine

For washing clotheswhile exercising ona pedal machine

An affordable and

convenient way ofwashing clothes inrural India whichexperiencesfrequent powershortages

Source: Rediff Business, Aranca Research


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Source: Times of India, Economic Times, The Hindu, Defence NowNotes: ICBM - Inter-Continental Ballistic Missile, DRDO - Defence Research & Development Organisation, HSL - Hindustan Shipyard Limited

INS Vikrant

India IndigenousAircraft Carrier (IAC)

Total displacementof over 40,000tonnes

Being built byCochin ShipyardLimited

To be inducted by2014-16

Agni-V missile

Successfully testfired in April 2012

India joined an elitegroup of nationshaving ICBM

technology Indigenously

developed by DRDO

To be inducted by2014-15

Arihant ClassSubmarines

With its launch in2009, India joinedan elite group ofnations having

nuclear-poweredsubmarines

Developed by HSL

To be commissionedby 2012-13

Tejas

Second supersonicaircraft to bedevelopedindigenously byHindustan

Aeronautics Limited(HAL)

To be inducted by2015 at a cost ofUSD103.1 million


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Source: Battelle, Electronics for You, Organisational websites, Aranca ResearchNotes: PPP - Public Private Partnership, R&D - Research and Development, NMITLI - New MillenniumIndian Technology Leadership Initiative, CoE - Centre of Excellence, NIC - National Innovation Council

Policy support

PPP in R&D

Strengtheningeducational

infrastructure

Amendments to thePatents Act &Setting up of NIC

Inviting Resulting in

Growing Demand

Evolving consumer

lifestyles

Liberalisation andincreasing competition

Proximity to futuregrowth markets

Increasing Investments

Establishment of

CoEs, NMITLI initiative

Providing support toglobal projects from

India

Increasing corporateR&D investments


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Source:Aranca Research

R&D spending by top six pharma giant in FY12(USD million)

Indias pharmaceutical market is highly fragmented, with300 large and 18,000 mid-sized and small companies

The countrys pharma industry accounts for about 1.4 percent of the global pharma industry in value terms and 10 percent in volume terms

The healthcare sector in India is expected to reach USD100billion by 2015 from the current USD65 billion

This would help drive R&D growth in India; the averageR&D expenditure by Indian pharma companies is close to 6per cent of total revenues

In FY12, total R&D spending by top six pharma companieswas USD503.5 million

130 124

98

59

39 36

16

Dr.Reddy's

Labs L

upin

Ranbaxy

Cipla

Piramal

Healthcare

Wockhart

Orchid

Chemicals


24/44

PPP in R&D

Exchange of scientific knowledge between research centers, national laboratories,institutes of higher learning and the industry

The Indian Government plans to involve the private sector in R&D mainly for sectors likevaccines, drugs and pharmaceuticals, super computing, solar energy and electronichardware

The government has shell out a USD1.1 billion public-private partnership fund to supportresearch and development in India

Funded Institutions andForeign Universities

Increasing the number of Indian Institutes of Technology (IITs) to 16, establishing 3 newIndian institute of Science Education and Research (IISER) and 30 central universities

Foreign universities permitted to enter the higher education system in India by establishingtheir own campuses or joint ventures with existing universities

Tax Incentives

Government offers 200 per cent deduction for capital and revenue expenditure incurred bymanufacturing companies with in-house R&D

Income tax exemption of 125 per cent to 175 per cent on donations made to universities,colleges and other scientific associations

Source: Battelle, Electronics for You, Organisational websites, Aranca ResearchNotes: PPP - Public Private Partnership


25/44

Patents Act Amendments to the Patents Act, 1970 to make it TRIPS compliant Increased incentives to domestic firms to conduct R&D Increased likelihood of technology transfer from developed nations

National InnovationCouncil (NIC)

In 2010, NIC was set up to implement strategies for inclusive innovation in India andprepare a roadmap for innovation over 2010-20

Tasks of NIC include creating a framework to encourage innovation by central and state

governments, universities, R&D institutions and SMEs

Source: Battelle, Aranca ResearchNotes: SMEs - Small and Medium Enterprises


26/44

Source:Aranca Research

Introduction of STIPolicy 2013

In January 2013, the government of India introduced the Science, Technology andInnovation (STI) policy 2013 at the centenary sessions of the Indian Science Congressheld at Kolkata

Vision of STI Policy The STI policy is aimed at helping India become one of the top five global scientific

powers by 2020

Rising Involvement ofThe Private Sector

STI aims to boost innovation through research and development (R&D) led by the public-private partnership (PPP) mode thereby increase the investments on research anddevelopment (R&D) to 2 per cent of GDP by 2017 from current 1 per cent

Increase in HumanResources

The policy seeks to increase the number of full-time R&D personnel by 66 per cent over201317 and expand the number of publications from the current 3.5 per cent of global

share to around 7 per cent by 2020


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2013

Jan 13: DuPont is planning todouble their R&D activities in India

Jun 13: Huawei will be setting up

a new research and development(R&D) centre in Bengaluru with aninvestment of USD150 million

2012

Mar 12: Aditya Birla Grouplaunches R&D centre at NaviMumbai, developed at a cost ofabout USD52 million

Apr 12: Maruti Suzuki announcesan investment of USD500 millionto set up an R&D facility at Rohtak

Jun 25: Chinese equipment makerHuawei will invest USD2 billion toset up global R&D center

Nov 23: General Electric will

invest USD60 million to expand itsR&D facility; its is expected todevelop 30 new products by 2015

Source: India Electronic News, Moneycontrol, CNBC, Economic Times, Appliancemagazine.com,Business Standard, The Hindu, Company websites, Aranca Research



28/44

2011

Apr 11: Hitachi to invest

USD400 million to set up

R&D center in Bengaluru

May 11: ISRO announcessetting up of spacecraft

R&D center on 530 acres

land at Chitradurga

Oct 11: Saab AB and

Mahindra Satyam open an

R&D center in Hyderabad

for conducting research in

aerospace, defence andcivil security

2010

Jan 10: Huawei allocates

USD500 million investment

for R&D center in

Bengaluru

May 10: Bridgewater

opens center of Excellence

in Gurgaon for telecom

software R&D

Aug 10: Alstom earmarks

USD39 million to establish

R&D center for power

products at the Infosyscampus

2009

Jun 09: LG Electronics

doubles its annual R&D

investment outlay to

USD83 million

Oct 09: Tata DoCoMo sets

up R&D center for value-

added services (VAS) and

mobile applications

Oct 09: Hyundai sets up

R&D center at Hyderabad

at an investment of USD25

million




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Centers of Excellence(CoEs)

The government has set

up CoEs based on the

PPP model for technology

development and transfer,

scientific research, humanresource development and

economic outreach

CoEs have been set up in

the areas of telecom,

wireless technology, bio-

informatics, lasers and

optoelectronic devices and

nano-electronics

NMITLI

The programme identifies

areas for development

based on national

consultation and invites

best partners frominstitutions, academia and

private sector to play a role

in the process

NMITLI has initiated 60

largely networked projects

in diverse areas involving

85 industry partners and

280 R&D groups fromdifferent institutions with

investment outlay of

USD114 million

Centrally FundedInstitutes

The government proposes

to establish 8 new IITs, 3

IISERs, 10 NITs and 20

IIITs by 2012

These institutes together

account for over 80 per

cent of the total PhDs in

engineering in India

The institutes are also

amongst the top Indian

applicants for patents from

the institutes anduniversities category

Central and ForeignUniversities

Government is expected to

have set up 30 new central

universities by 2012

New universities in 16uncovered states

The remaining 14 new

Central Universities will be

set up as world class

centers of excellence at

different locations

Foreign universities

permitted can enter higher

education system in India

by having their own

campuses or joint ventures

with existing universities


30/44

Source: Lupin website

Note: API - Active Pharmaceutical Ingredient, CNS - Central NervousSystem, NSAIDS - Non-Steroidal Anti-Inflammatory Drugs, TB -

Tuberculosis, NCE - New Chemical Entity

Patents filed by LupinLupin is a renowned pharma player having a wide range ofquality, affordable generic and branded formulations andAPIs

Lupin has emerged as the fifth largest and among the topfive fastest-growing companies in the US

It is one of the worlds largest manufacturers of TB drugs

and has significant market share in the cardiovascular,diabetology, asthma, paediatrics, CNS, Anti-infectives andNSAIDs therapy segments

By FY12, Lupins total patent filing reached 1,024 up from600 in FY08

38

26

75

42

26

84

42

12

5

14 17

43

FY09 FY10 FY11 FY12

Formulation Patents API/Process patents NCE patents


31/44

Source: Lupin website

Note: CAGR - Compound Annual Growth RateCAGR* - Growth in INR terms

Lupin net sales (USD million)Its revenues increased from USD822.5 million in FY09 toUSD1.7 million in FY13, at a CAGR* of 25.8 per cent

Advanced market formulations comprised nearly 52 per centof its revenues in FY12

822

1,007

1,271

1,474

1,742

FY09 FY10 FY11 FY12 FY13

CAGR*: 25.8%


32/44

Source: Office of the Controller General of Patents,Designs and Trademarks 200910 Annual Report,

Company Annual Reports, Aranca Research

Indian IT Patent Applications (FY10)Infosys filed the highest number of patent applications in theIndian IT sector, followed by LG Soft India and C-DAC

Research activity for different areas is allocated amongstdedicated labs such as Software Engineering lab,Convergence lab, Security and Privacy lab, DistributedComputing lab and E-Com lab

6

6

6

7

23

SamsungIndia

Newgen

C-DAC

LG Soft India

Infosys


33/44

Source: Company Annual Reports, Aranca Research:Note: CAGR - Compound Annual Growth Rate,

* CAGR calculated on rupee numbers

Income and net profit (USD billion)During FY0613, the companys revenues increased at aCAGR* of 19.3 per cent to USD7.4 billion from USD2.2billion

During the same period, net profit expanded at a CAGR of17.8 per cent to USD1.7 billion from USD552 million

Infosys spent USD167 million in R&D expenses, up 80 per

cent from the USD92 million spent in FY10

Consequently, total R&D spending during FY13 came in at2.3 per cent of total revenue

0.0

0.2

0.4

0.6

0.81.0

1.2

1.4

1.6

1.8

2.0

0

1

2

3

4

5

6

7

8

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13


34/44

Source: Economic Times, Company Annual Reports,

Aranca ResearchNote: CAGR: Compound Annual Growth rate, * CAGR calculated in

Indian Rupee terms

Strong Research and DevelopmentIncorporated in 1933, HUL is Indias leading company bysales in the fast-moving consumer goods (FMCG) sector inIndia. British-Dutch company Unilever owns a majority stakeof 52 per cent in HUL

In 2012, Forbes recognised HUL as the world's sixth mostinnovative company; it was the highest ranked FMCGcompany in the list

Eighteen ofHULs brands featured in the 100 Most TrustedBrands 2012 survey carried out by Brand Equity

HUL was felicitated for receiving the highest number ofpatents in 2009 at the Annual Intellectual Property Awards2010

The company has over 20,000 registered patents and

patent applications worldwide

891 994

1,612

FY10 FY11 FY12

CAGR*: 34.5%


35/44

Source: Company Annual Reports, Aranca Research

Notes: FY09* represents data for 15 months (Jan 2008- march2009) as the company changed it reporting period from calendar

year to Fiscal year,CAGR* - Compound Annual Growth Rate;

CAGR is calculated in INR

Sales (USD billion)During FY0513, HULs revenues increased at a CAGR* of12.0 per cent to USD4.9 billion from USD2.6 billion

During FY12, the company spent USD336 million in R&D,up 62 per cent from the USD218 million spent in FY11

2.6 2.9

3.7

4.7

3.8

4.54.8 4.9

2005 2006 2007 FY09* FY10 FY11 FY12 FY13

CAGR*: 12.0%


36/44

Source: Company Annual Reports, Aranca ResearchNote: CAGR* - Compound Annual Growth Rate

Total Application for Patents, Design andCopyrights Filed

Tata Motors, a subsidiary of the Tata Group, is one of theleading automobile company and has presence in 129countries across six continents

Tata Motors is the leading commercial vehicle manufacturerand the third-largest passenger vehicle manufacturer inIndia

It is also the worlds fourth-largest truck manufacturer byvolume

During FY0612, the number of applications for patents,design, and copyrights filed by the company expanded at aCAGR* of 16.4 per cent to 212 in FY12

Tata Motors Tata Indica is India's first indigenouslydeveloped passenger car

Tata Nano, a USD2,100 car, is an indigenous example ofIndias innovation in the automobile segment

43 34

254

314

272

182 212

FY06 FY07 FY08 FY09 FY10 FY11 FY12

CAGR*: 16.4%


37/44

Source: Company Annual Reports, Aranca ResearchNotes: R&D - Research and Development, CAGR - Compound

Annual Growth Rate; CAGR is calculated in INR terms

Total Application for Patents, Design andCopyrights Filed

During FY0613, Tata Motors revenues increased at aCAGR* of 31.8 per cent to USD34.8 billion from USD6.2billion

The companys R&D spend expanded at a CAGR of 16.4per cent to USD323.1 million in FY12 from USD176.0million in FY07

6

8 10

1620

28

36 35

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

CAGR*: 31.8%


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Source: ARAI, Business Standard, India Law Office, Aranca ResearchNotes: IT - Information Technology, ARAI - Automotive Research

Association of India, NVH - Noise, Vibration and Harshness

Pharma and Healthcare

Contract research is a fast growing segment in the Indian healthcare industry Indian pharmaceuticals market is anticipated to expand at a CAGR of 17.2 per cent over

2011-2016 to touch USD27.3 billion Indias huge population places it among the worlds largest markets for vaccines and

drugs

Information Technology(IT)

India is increasingly seen as a product development destination Companies are now offshoring complete product responsibility including complex services

like product management

Automobiles

Research is being carried out by individual companies as well as industry associationssuch as ARAI in various areas such as structural dynamics, safety, NVH and electronics

India is the sixth largest auto market globally and is poised to become the third largest by2020


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Source: ARAI, Business Standard, India Law Office, Aranca ResearchNotes: IT - Information Technology, ARAI - Automotive Research

Association of India, NVH - Noise, Vibration and Harshness

Biotechnology

Protein and antibody production, and fabrication of diagnostic protein chips are promisingareas for investment

Stem cell research, cell engineering and cell-based therapeutics are other areas, whereinIndia will cash in its expertise

Agriculture

India has the potential to become a major producer of transgenic rice and severalgenetically modified (GM) or engineered vegetables

Hybrid seeds, including GM seeds, represent new business opportunities in India basedon yield improvement


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Automotive Research Association of India (ARAI)Survey No 102, Vetal Hill, Off Paud Road, Kothrud,Pune - 411 038Tel: 91-020 30231111Fax: 91-020 25434190E-mail: [email protected]: www.araiindia.com

Indian Society for Clinical Research (ISCR)c/o Pfizer center, 5, Patel Estate, S.V.Road, Jogeshwari(West),Mumbai-400 102Tel: 91-022 26774140, 66932028E-mail: [email protected]: www.iscr.org

The South India Textile Research Association (SITRA)13/37, Avanashi Road, Coimbatore - 641 014Tel: 91-422 2574367, 6544188Fax: 91-422 2571896Email : [email protected]: www.sitra.org.in


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API:Active Pharmaceutical Ingredient

ARAI:Automotive Research Association of India

CAGR: Compound Annual Growth Rate

CoE: center of Excellence

DRDO: Defence Research and Development Organisation

FDI: Foreign Direct Investment

FY: Indian Financial year (April to March)

So FY10 implies April 2009 to March 2010

GDP: Gross Domestic Product

GERD: Gross Domestic Expenditure on Research and Development

HAL: Hindustan Aeronautics Limited

HSL: Hindustan Shipyard Limited


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IAC: Indigenous Aircraft Carrier

ICBM: Intercontinental Ballistic Missile

IT: Information Technology

NMITLI: New Millennium Indian Technology Leadership Initiative

NVH: Noise Vibration and Harshness

PPP: Public Private Partnership

PPP: Purchasing Power Parity

R&D: Research and Development

TRIPS: Trade Related Aspects of Intellectual Property Rights

USD: US Dollar

WTO: World Trade Organisation

Wherever applicable, numbers have been rounded off to the nearest whole number


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Year INR equivalent of one US$

2004-05 44.95

2005-06 44.28

2006-07 45.28

2007-08 40.24

2008-09 45.91

2009-10 47.41

2010-11 45.57

2011-12 47.94

2012-13 54.31

Exchange Rates (Fiscal Year)

Year INR equivalent of one US$

2005 45.55

2006 44.34

2007 39.45

2008 49.21

2009 46.76

2010 45.32

2011 45.64

2012 54.69

2013 54.45

Exchange Rates (Calendar Year)

Average for the year


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innovation and patents - august 2013

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