Strategic Industries and Emerging Technologies for a Future-Ready India


- Prepared by NSAB (2013-15) Sub-group on Strategic Industries and Technologies


1. Introduction: Strategic Importance of Manufacturing and Enabling Technologies

As an emerging power, India's national security depends on the robustness and sustainability of its economic growth. Among other factors, which include its human capital, its natural and physical capital, and its scientific and technological strengths, Indian industry will also have an important role to play.
The share of industry in the country's GDP has been languishing in the range of 26%-27% (including construction) in the post-liberalisation era. Unlike other large developing economies, such as Brazil and China, India's diversified manufacturing sector is spread across its geography. This is a sound base on which India's economy can grow. But manufacturing is also under threat. Entrepreneurs find it easier to set up firms in the services sector. Investors, in turn, prefer higher returns on investment over shorter payback periods, which make long-term investments in strategic industries challenging. India's youth prefer the pay scales and glamour of the services sector. There is an urgent need to bring confidence back in the manufacturing sector. India's enterprise and talent must be channeled towards the grand challenge for India's development: growth which is inclusive and sustainable.
From a national security perspective, manufacturing matters for four main reasons:


  • Jobs: A dynamic manufacturing sector is both dependent on labour mobility and also encourages it, as workers gain and transmit skills and technical knowhow across different sub-sectors, if not industries.
  • Innovation: Around the world, the manufacturing sector is also often the fountainhead of innovation in the economy. But India spends far less on R&D than other leading economies and only a small share is accounted for by the private sector.
  • Trade balance: In India, a large share of export earnings (nearly half) is spent on importing crude oil. As a high value-added sector, manufacturing could have a dual role: exports of manufactured products could serve as the bulwark against rising import costs for raw materials; and reducing dependence on imported fuels by innovating in energy efficiency.
  • Resource security: As the manufacturing sector grows, it will need more domestic and foreign sources of energy supplies and other critical mineral resources, such as cobalt, lithium, antimony, molybdenum, copper, gallium etc., which have gained prominence in recent years.

Two important parameters affect the linkage between manufacturing and national security: indigenisation and resource efficiency. The case for indigenisation rests on creating jobs at home, developing state-of-the-art technologies, improving the trade balance, and increasing resource security by reducing exposure and vulnerability to resources. Efficiency in the use of resources - the other parameter - is important because it could increase jobs in new sectors, promote innovations, improve the trade balance, and of course improve resource security (table 1). India's efforts in growing higher value added manufacturing at home (essentially, high-tech indigenisation) would have to be accompanied by better ways to acquire and use resources efficiently (table 2). The most important national security aspect for India's manufacturing sector is resource efficiency.

Thus, a strategic industry for India is one that enables the domestic production of high value added goods and services while ensuring that the manufacturing process is efficient in managing the limited inputs available to India.



However, currently there exists no understanding within the country on exactly what should be considered as a strategic industry and the technologies needed to pursue them. As a result there is no coherent strategy at the national level on how these technologies can be brought closer to industrial development and at commercial scale.

Emerging and enabling technologies have key features: (a) knowledge intensiveness, (b) rapid innovation cycles, (c) multidisciplinary nature in cutting across many areas, and (d) immense disruptive potential.

In this study, we have attempted to identify and understand emerging technologies to which India must direct strategic attention. Through an extensive review of various studies on technology trends, CEEW carried out an in depth analysis of five emerging technologies, namely biotechnology, nanotechnology, micro and nanoelcctronics, photonics, and advanced materials. These technologies have been identified as growth enabling technologies (ETs) and disruptive in the Indian context. A distinct feature of "disruptive technologies" is their diverse and multidisciplinary applications potential by displacing older technologies, or by enabling whole new classes of products and markets. The five comprehensive knowledge-intensive technology areas are already recognised by major economies in recent times based on their potential impact on global economy. From India's perspective, all five technologies have wide-ranging applications for strategic, economic growth, and social development imperatives (Figure 1).



2. Why focus on these enabling technologies?

Biotechnology

Biotechnology refers to a group of technologies that could be broadly defined as "using organisms or their products for commercial purposes". Biotechnology is an enabling technology for industries as diverse as pharmaceuticals, diagnostics, textiles, aquaculture, forestry, chemicals, household products, food processing etc. for creating products possessing characteristics such as greater speed, efficiency and flexibility. India has a pool of nearly 380 biotech companies out of which nearly 40% operate in bio-pharma, followed by bio-services (21%), agriculture biotechnology (19%), bioinformatics (14%) and industrial biotechnology (5%) with the smallest share.
The biotechnology sector has a global market valued at USD 216.5 billion, and is expected to reach USD 414.5 billion by 2017. The biotechnology sector in India has registered a cumulative annual growth rate (CAGR) of 24.18% (FY 2002-03 to 2011-12), crossing approximately USD 4 billion in revenue, which is estimated to reach USD 11.6 billion by 2017.
The disruptiveness of industrial biotechnology alone can be seen through bio-refining outputs (fuels, chemicals, power and heat), which are estimated to yield revenue potentials of USD 80 billion for biofuels, USD 10-15 billion for bio-based bulk chemicals and bio plastics alone, and USD 65 billion for power and heat by 2020. Although there is a lot of activity in bio-pharma in India (and to an extent, agriculture biotechnology), industrial biotechnology is still largely untapped in India. As per CEEWs analysis, industrial biotechnology alone has a potential to impact or leverage approximately 14.5% of Gross Value Added (GVA) by manufacturing industries, thus offering extensive opportunities for industrial growth.


Nanotechnolog

Nanotechnology is the study of structures, materials or devices sized between 1 and 100 nanometre (10" metres). As an "enabling technology", it can be applied to realise smaller, quicker and intelligent components of products, with completely new or improved functions in early phases of the value addition chain. At the commercial level, nanotechnology impacts or is likely to impact three major industrial applications: (a) manufacturing and materials, (b) electronics and information technology, (c) healthcare and life sciences.
In 2011, nanotechnology-enabled products contributed nearly USD 1 trillion in a total global industrial value add of USD 22 trillion. This is expected to rise to USD 3 trillion by 2015, growing at an annual rate of 30% to 40%. Nanotechnology application sectors as a whole have the potential to impact up to 86% of India's total gross value added (GVA) by industries.


Micro and nanoelectronics

Micro and nanoelectronics is an expansive technology area, which impacts a range of engineering goods from the simplest components (insulators, resistors, capacitors) to modern materials (disc drives, organic materials, plasmas, semiconductors, quantum effect materials etc.) and systems (integrated circuits, printed circuit boards, multichip modules, sensors, micro-electro-mechanical systems etc.). The "use of micro components for manufacturing electronics products" and is typically associated with integrated circuits (ICs), which essentially are an inter-connected set of electronics components. Nanoelectronics, on the other hand, is defined as "nano-scale (<100 nm) manufacturing of ever-smaller and higher performance of existing semiconductor devices and advances in molecular electronics" and is considered a strategic research and application field.
Products comprising micro and nanoelectronics components and systems represent around USD 1.75 trillion in value, in turn supporting 10% of global GDP. It is recognised as the largest and fastest growing manufacturing industry. The Indian electronics market stands at USD 45 billion (nearly 2.5% of the global market) and is projected to grow to USD 65 billion by 2015. However, a matter of concern is the dwindling share of domestic value addition in manufactured goods and the high import dependency (-65%) for manufactured goods. High value added manufacturing is estimated to decline to 6.7% of total demand of the electronics sector and will result in a cumulative opportunity loss of USD 200 billion over the period 2011-15. Further, it is very likely that in the coming years, the electronics import bill would surpass the oil import bill of India.
Micro and nano electronics find application in nearly every manufacturing industry (directly or otherwise). However, their manufacture contributes a mere 2.7% out of total manufacturing GVA. This also shows the immense opportunity that lies with Indian manufacturing industries to increase their production share and boost India's dwindling industrial growth.


Advanced Materials

Advanced materials arc entirely new materials or modifications to existing materials to obtain superior performance. Advanced materials can broadly be categorised into the following groups: (a) biomaterials, (b) catalysts, (c) ceramic materials, (d) composites, (e) electronic and optical-photonic material, (f) magnetic materials, (g) metals and alloys, (h) nano materials, (i) synthetic polymers, (j) superconducting materials. These ten groups of products and materials touch our everyday lives in a significant manner.
Advanced materials offer a potential market encompassing numerous cross cutting application areas: energy generation and supply, aerospace, automotive, marine, railways, healthcare, packaging, technical textiles, and construction. It is estimated that global requirement of advanced materials will reach USD 7 trillion by 2030 from the current USD 3 trillion (2012).
India has had a focus on composites since 1962. It has seen significant growth over the last decade and is now home to more than 1200 companies involved in the manufacture of composites. Composites find application in the following sectors in India: (a) wind, (b) industrial, (c) railways, (d) automobiles, (e) oil and gas, (0 building and construction, and (g) marine. In the oil and gas sector, there lies a vast potential for composite applications in high-pressure pipes and pipefittings. Even with the high cost of raw materials, scarce availability of many essential materials (thanks to import restrictions) and lack of mechanised processes, composite industries in India are expected to continue on a strong growth trajectory, reaching approximately USD 1.8 billion by 2017. As per CEEW's analysis, advanced materials development has the potential to impact up to 40% of India's total industrial gross value added.


Photonics
Photonics deals with use of light to detect, transmit, store and process information; to capture and display ./nsab-images; and to generate energy. The photonics industry has a huge potential due to the increasing global demand for industrial laser and optical systems.
Globally, the total photonics market was approximately USD 400 billion in 2011, and is estimated to increase to around USD 620 billion by 2015. Some of the applications of photonics include: (i) telecommunications; (ii) optical computing and memories; (iii) LED technologies; (iv) display technology; (v) imaging technology; (vi) solar energy; (vii) bio photonics and medical applications; (viii) manufacturing; (ix) sensors.
Photonics influences several manufacturing industries and service sectors through various value added channels: scanning and imaging systems, data transmission, screens and displays, advanced lighting, photonic energy systems, and laser systems. In India, photonics is crucial for the development of several industry sectors, namely electronics, information technology, science, medical, sheet metal diamond, jewellery processing and automotive manufacturing. As per CEEW's analysis, 19% of industrial gross value added in India can benefit by embracing photonics. Similarly, if brought into the fold, photonics can leverage nearly 40% of the total GVA contributed by the entire services sector in India. The National Optic Fibre Network will also support areas such as education, business, entertainment, environment, health households, and e-governance services.


3. India's efforts in translating innovation into commercial products/technologies
Large base of publications in key areas of scientific research.

  • The government-supported Nano Mission has rolled out many Masters and PhD level degree programmes. However, none of them encompasses the elements of interdisciplinary approach and specialisation in specific sectors of nanotechnology.
  • The Department of Electronics and Information Technology (DeitY) has formed the "R&D in Electronics Group" to undertake sponsored R&D activities at various institutions of higher learning and R&D laboratories. The main research areas include nanotechnology, medical electronics, microelectronics, industrial electronics etc.
  • DeitY also has a dedicated capacity building programme under the Microelectronics Development Programme for which they have initiated projects in the area of analogue mixed signal technologies in various institutions
  • Frontline research institutions in photonics include: International School of Photonics (Cochin University of Science and technology, CUSAT); Tata Institute of Fundamental Research (TIFR); Society of Applied Microwave Electronics and Engineering and Research (SAMEER); Indian Institute of Science (IISc, Bangalore); Defence Research Development Organisation (DRDO); Optical Society of India (OSI); Photonics Society of India (PSI).

An established mechanism of project funding through public sector/ government - DST/DBT/ DSIR/ DRDO/ PSUs - especially to build research capacity within the country.

  • DeitY has initiated the Indian Nanoelectronics User Programme (INUP) to impart hands-on training, knowledge and expertise in the field of nanoelectronics.
  • The National Innovation Council (NIC) has a particular focus on nanoelectronics.
  • DST and the Council of Scientific and Industrial Research (CSIR) are key agencies promoting R&D in advanced materials and composites. The Technology Information Forecasting and Assessment Council (TIFAC, under DST) has introduced an advanced composites programme to provide technical guidance and financial assistance to industries for new materials, processes and products.
  • The International Advanced Research Centre for Powder Metallurgy and New Materials (ARCI) functions as a grants-in-aid institution for DST and aim to bridge the gap between conventional research institutes and high technology industries.
  • DeitY offers National Photonics Fellowships to encourage students in high quality research in photonics. The fellowships are granted to 15 students each year.

An existing set of specific centres of excellence, which have the potential to step up output given their research pedigree

  • Centres of Excellence in nanoelectronics at IISc, Bangalore and IIT Bombay.
  • DeitY is setting up Centres of Excellence at IITs in Madras, Delhi and Kharagpur.
  • Advanced Centre for Materials Science (ACMS) at IIT Kanpur.
  • CSIR labs such as Central Glass and Ceramic Research Institute (CGCRI).

Dedicated agencies such as TIFAC, NST-M1S, etc. are mandated with the task of
identifying trending technologies and monitoring outcomes of public funding.


4. Key challenges in the development of strategic technologies in India
Funding mechanisms but limited industry involvement
In India, details on expenditure on R&D projects and programmes carried out by various scientific agencies under ministries/public departments are largely not available in the public domain. A quick analysis of R&D expenditure incurred by DST in 2010-11 shows that roughly only 10% of the planned R&D expenditure is towards mission-oriented and targeted research programmes, while nearly 70% of the R&D expenditure is diluted among numerous scientific agencies carrying out research classified under non-specific headers. Moreover, India's progress in raising GERD up to a level of 2% of GDP from the current 0.88% is questionable, as a significant portion of the expenditure within the GERD is towards non-plan expenditure, which is not necessarily in support of R&D.
India spends less than 1% of its GDP as GERD, which is much lower than other major technologically advanced economies: Israel spends more than 4%, and France, Germany and the United States each spend more than 2%. Whereas industry spends more than government in R&D in other major economies, in India public sector spending is two to three times more than that of industry. The private sector's contribution remains less than one third of total GERD by India (28.9%), due to associated risks in investment and technology failure.


Biotechnology

The average cost of bringing a new drug to market is USD 1.3 billion. The Department of Biotechnology (DBT), recognised as one of the major public funding agencies had an outlay of only USD 0.22 billion over the period 2005-12, thus averaging approximately USD 31 million per annum. Those Indian companies, which have proven strengths in areas of drug discovery, most often enter into contract research agreements with foreign firms, which own the patents.


Nanotechnology

India had allocated USD 250 million under its XI FYP (2007-12) to develop a nanotechnology research and innovation ecosystem. Despite this ambitious investmcnt-led plan, India's performance in the sector has been far lower than its competitors when it comes to commercialisation of research led ideas and innovations.


Micro and nanoelectronics

The joint Centres of Excellence in Nanoelectronics at IIT Bombay and IISc Bangalore receive USD 50 million from the government. Further, at IIT Bombay, Applied Materials set up a "Nano-manufacturing laboratory" with USD 10 million as a donation. India approved the "The National Electronics Policy 2012" in October 2012, with aims to strengthen indigenous manufacturing, targets a turnover of about USD 400 billion, USD 100 billion of investment, 28 million jobs and a strong supply chain by 2020.


Advanced materials

TIFAC and Small Industries Development Bank of India (SIDBI) have jointly launched the Revolving Technology Innovation Fund (RTIF) (Figure 15) of approximately USD 5.5 million (for a period of 10 years) in order to provide assistance to start-ups and small and medium scale enterprises (SMEs) for scaling up product development, demonstration and commercialisation. Further, DST established a Composites Technology Centre in Bangalore with the support of the Karnataka government, estimated to cost around USD 3 million


Photonics

The "R&D in Electronics" group under DeitY has an Electronic Materials & Components Development (EMCD) division, which includes photonics. However, there is no dedicated funding available at specifically for this technology. Very few companies in India focus their in-house R&D in large scale manufacturing of photonics components. Most of the firms import components and assemble basic products with few jobs in the sector.


Publications but few patents

Data retrieved from patent databases in 26 countries for 2003-13 indicate that Japan and US have a robust performance across all the technology areas. India has a considerably low percentage of patent applications when compared with other countries (Figure 2).
The Indian Patent Office (IPO) has a chronic and ever increasing backlog of unexamined patent applications (123,255 pending applications as of April 2012). IPO staff experience the highest per capita workload (20 applications a month, as compared with seven in Europe and China, eight in the United States) at the lowest pay. International patent filing is a very costly affair, and usually research grants provided to universities/individuals do not include this expenditure as part of the budget.

India holds 2%-4% share of global publications in biotechnology and allied fields. India performs significantly poorer in terms of registering patents, as there were only 83 patents in bio-pharma filed by DBT-sponsored institutes/universities (2004-2010). Only ten out of these were granted and the commercialisation of patents into viable products was even lower. In other sectors of biotechnology, such as agricultural biotechnology and industrial biotechnology, the trend is similar with ten patents granted out of 63 filed during the same period.
For nanotechnology, India was placed sixth in the ranking of countries publishing actively in the field of nanotcchnology. While India's global share was very low (6%), the ranking indicates that the research efforts emanating from India have gained visibility. But India had a poor rank (14th position) globally of publications in top 1% cited journals in 2011, with a significant number of papers with citations below the world average.
During 2003-13, more than 500 articles have been published in the field of nanoelectronics and more than 20 patents have been filed under the INUP. For microelectronics, 21 patents have been filed by DeitY under the MDP.
In advanced materials, India is ranked sixth in materials science research with about 12,693 scientific papers published in the most recent five-year period. As of 2007, IITs (3376), IISc (1212) and CSIR (2516) were the top three institutes with maximum publications in the area of materials science.
However, India's share of patents in photonics during 2003-2013 is less than 0.1%.

Poor quality and standards of domestically manufactured products and materials
Indian industry, to remain competitive, relies on domestically manufactured components and other raw materials. However, in many cases the quality of raw materials does not match the international standards in terms of physical and chemical properties. This, in turn, adversely impacts the quality of final products. Technology derived novel products need to be standardised for their quality and safety in terms of their impact on society and environment. A big challenge for India is overcoming the poorly organised quality and product testing system, where voluntary quality improvements against increased manufacturing cost is not favoured by many manufacturing firms

5. Strategies for technology development and commercialisation

I. Aiding technology transitions: Outreach and matchmaking


Focus area I: Technology information portal for R&D funding and activities
A one-stop technology information portal could provide a range of information, from the perspective of potential researchers, government funding agencies, entrepreneurs, incubating entities and venture capital investors (Figure 3). By offering a one-stop portal, the database could help identify emerging areas of research, reduce doubling of effort, target limited resources more strategically, and assess the impact of R&D investments especially in facilitating more links between technology developers and industry.

Skilled graduates (and novice researchers) looking to get a foothold in the research community could get valuable information on which labs and institutes in the country are focusing on areas of their interest. In turn, government funding agencies can avoid duplication of funding by ensuring that there is no excessive investment in some areas while others lie neglected. A more rational distribution (geographic and institutional diversity) of precious public funding is also made easy as it would be easier to visualise current and past recipients and to effectively promote fledgling research institutions. In tandem with the information on output from currently sponsored research (as envisaged earlier), this would also enable high performing labs and institutes to be rewarded with continued support for the high quality of work they produce. Private entities (VCs, banks, industries) could also gauge the nature of demand for funding, the areas with potential to deliver high impact research and those commercially viable technologies that have been shelved for want of crucial funding in the final stages of product refinement and roll-out.
Focus area 2: Leverage enabling technologies across sectors and various stakeholders

The development of such an exhaustive database can be effectively taken up through a collaborative effort among existing agencies. The entities that are best suited to work jointly on developing this portal are identified in Figure 4


The Open Government Platform (OGPL) is identified as the lead agency that is tasked with the responsibility of data analytics and information dissemination to the user community. Agencies such as NSTMIS, Ministry of Statistics and Programme Implementation (MOSPI) and IPO are identified for gathering information and building the independent databases of indicators pertaining to R&D and financing, industrial output, and patents respectively. The IPO can make its database management system more robust through real time updating the application status classified as per the International Patent Classification system. NSTMIS can adopt a real time data collection mechanism by mandating individual research entities and financing agencies to provide comprehensive data for the proposed repository. The National Knowledge Network (NKN) can efficiently support the proposed system by providing the required ultra-high bandwidth network and enabling a constant updating of information by the various agencies or their representatives.



II.Financing and mitigating risk: More sources, more focus

Focus area I: Comprehensive and independent evaluation of output from R&D investments
An unbiased evaluation of the output from research (government sponsored and otherwise) will enhance the efficacy of funding and also prove to be a guiding star in determining the course of future investments in R&D. This applies at the basic and applied research stages of the technology development chain. It will also enable decision makers to factor in the constantly evolving end-goals of product development and the demands from consumers, thereby specifying output requirements in a better manner. In addition this will also enable the linking of early stage output from specific research work carried by funded institutes with advanced stage research by other specialised entities, thereby ensuring that research grants are used in a more optimised and efficient manner.
From our analysis so far, we find no specific mechanism that the government or other public agencies adopt to measure "the return" on their investments in R&D. While reputed agencies like CSIR, DBT etc. disclose the impact of their research in terms of publications and in some cases patents, the information on the commercial products being impacted by research is minimal and virtually non-existent. Without linking final impact sectors (manufacturing, services or social sectors) with outputs of research, one cannot ascertain the true value that research has brought about. This precludes informed decision making in the development of national policies, which could encourage potentially rewarding investments in newer technologies.
The National Sample Survey Organisation (NSSO) and Central Statistics Organisation (CSO), under MOSPl conduct periodic surveys to solicit data on various growth indicators (e.g. employment, gross value addition, productivity, power consumption etc.) from both manufacturing industries and services classified under the national industries classification (NIC). But we find no specific studies that provide data on technologies in use and the impact of the same. The absence of such information reduces the visibility of various technologies in vogue in industrial manufacturing.
In coordination with agencies like the National Science and Technology Management Information System (NSTMIS), the CSO/NSO must take charge of developing indicative measures of the influence of domestic R&D (both public and private funded) on national productivity and the incremental value add as a result of the adoption of these technologies. The feedback through this process will also enable more targeted investments in future, with a focus on those areas that have shown promise and in some cases ones that desperately need the funding. This would also attract private sector funding with greater likelihood, as it makes a better case for high rates of returns on investments, as evidenced by the surveyed industries.


Focus area 2: Driving R&D towards commercialisation through strategic financing
Academic and research institutes will continue to demand a lion's share of the funding from the government. A breakdown of the public sector investment (Figure 5) shows that much of the funding is in the first three stages of technology development, basic and applied research and technology demonstration. However, there is little concerted action on part of the responsible entities in allocating the scarce resource to strategic sectors.


We, therefore, propose that a stage-wise funding mechanism must be adopted by the government, whereby projects identified to reinforce enabling and disruptive technologies can be funded through government-private collaborations.

Priority for universities and institutes, which are able to collaborate actively with the private sector for conducting research (and obtaining matching funding), will promote competitive grant disbursals for targeted technology development missions. Active collaboration with strong government support will help more start-up companies to emerge from the quality research once they are backed by collaborative efforts.
Further, to promote translation of academic research into visible technology outcomes, annual appraisal of university professors and researchers must be carried out on the basis of patent outputs on par with research.


Focus area 3: Promoting private sector participation in technology development and commercialisation
For the private sector, there exist three types of risks associated with R&D, namely (a) high investments, (b) technology success and (c) market acceptance of these new technologies and the products that arise from them.
In order to encourage the start-ups and private industries to increase R&D spending, the government must don the unenviable role of a "risk supporting agency" for their investments. In such a model, government should strategically create a "Technology Risk Guarantee Fund" (TRGF), moving away from the current practice of granting soft loans, in order to support the risks faced by private entities for innovative R&D efforts. The proposed TRGF could invite private entities for royalty based cooperative grants, whereby they would be required to share profits (through a royalty) when commercialisation has been achieved. The royalty payment system must be designed i to ensure that the payments do not exceed the grant in aid including interest accrued.
This motivated risk support is expected to encourage more R&D collaborations between private and government research labs, and further able to attract VC funding for the transition from successful demonstration models/prototypes to the market development phase. It could help to achieve a GERD target of 2% of the GDP without a proportional increase in the contribution from public sources (Figure 6).


III. Effective intellectual property regime

Focus area 1: Capacity expansion of the IPO
In order to speed up patent application examination process, the IPO needs to increase its skilled manpower. A readily available pool of certified patent examiners/attorneys will help in customising the selection of technology specific human resources.

  • Outsource "prior art" searches to third party agencies: As already mentioned
    earlier, the IPO is faced with an ever increasing official backlog and extensive delays in
    patent examinations. In order to shorten the pendency period of applications, the
    Korean Intellectual Property Office (KIPO) outsources its prior art searches to third
    party vendors. Another successful model is Japan's patent process outsourcing strategy
    whereby a registered search organisation system was developed solely for the purpose
    of searching prior art documents. Under this system, Japan plans to significantly
    expand the number of registered search organisations in various technical fields. During
    2009-10, Japan's outsourcing for prior art searches increased by 5.6%.

In India, the Department of Industrial Policy and Promotion (DIPP) signed a memorandum of understanding with CSIR in order to make it an integral part of the patent application processing system as the latter has the infrastructure, competence and experience in patents search processing. However, this step has generated concerns. Under the Patents Act, an examiner or controller is not allowed to file a patent but CSIR is one of the major patents seeking institutions in India.
In order to increase the efficiency of the patent examination process and deal with pending applications, like JPO and KIPO, IPO could also initiate outsourcing of prior art searches to third party vendors, preferably independent registered entities (whether in the private sector or not) to ensure that quality matches the expected standards.


  • Increase in-house capacity: The IPO could increase its in-house capacity by hiring more trained IP professionals from institutes like the Indian Institute of Patents and Trademarks (IIPTA). The IPO should offer better pay-scale, promotions and
    compensation through incentive schemes in order to attract more and more IP
    professionals to work as patent examiners.

Focus area 2: Reorganise and restructure the IPO

Patent examiners must be given the task of examining applications based on their technical expertise and experience for an improved and more efficient evaluation system. There should be dedicated teams to take care of other administrative tasks such as checking some of the procedural formalities, quality checks, keeping track of pendency rates, conducting training sessions, etc.


Focus area 3: Fast-track IP courts for patent infringements

In India, High Courts have the power to deal with cases of patent infringement and invalidity. A separate Intellectual Property Appellate Board (IPAB) was formed in 2007 to ease down the burden of pending cases. However, in cases of patent infringement, only the high court and above remains the competent authority. Since civil courts in India are already burdened with a backlog of pending cases, patent infringements could be dealt with cither under the IPAB or separate fast track courts. This would build confidence among innovators and research community for faster redressal of their issues and also reduce the impact of false patent infringement challenges.


Focus area 4: Patent Prosecution Highway (PPH)

India should consider adopting a PPH model under which patent offices of various jurisdictions agree to share patent search and examination results in order to accelerate patent prosecution procedures. Under the US Patent and Trademark Office (USPTO), an applicant receiving a ruling from the Office of First Filing (OFF) that at least one claim in an application filed with the OFF is patentable may request the Office of Second Filing (OSF) to fast track the examination of corresponding claims. Countries operating under PPH programme include USPTO, KIPO, JPO, and EPO. This model could be highly beneficial for the IPO as it would significantly improve the speed of examination of patent applications, reduction in prosecution costs and help increase domestic patent filings.


 Focus area 5; Financial reform in the IPO

The government needs to invest more in the development of the IPO. One approach could be to allow the Intellectual Property Office to retain a fraction of the profits made by it for further development such as training, hiring, administration etc. It has been estimated that it earns a gross profit margin of 80%-90%, which accrues to the government. The overall surplus generated by the Intellectual Property Office rose from INR 148.06 crores in 2006-07 to INR 213.22 crores during 2010-11, out of which the patent office earned about 79%. Despite the profits earned by the Intellectual Property Office, the patent office fees have been increasing almost every year. More clarity is required on the reason for the hike in patent office fees, and it is necessary for the IPO to publish a roadmap that outlines the proposed reforms and targets to be achieved.


IV. Product manufacturing and quality standards

In India, the Bureau of Indian Standards (BIS) is responsible for establishing quality standards and certifying products. The product certification scheme of BIS aims at providing third party guarantee of quality, safety and reliability of products to the customer, with the IS I mark assuring conformity with specifications. BIS has many laboratories in operation in different parts of the country. The BIS laboratory recognition scheme is in line with ISO/IEC/17025:2005, and laboratories are initially assessed on the basis of the ISO standards. The National Accreditation Board for Testing and Calibration Laboratories (NABL) is the sole accreditation agency, which was established with the objective of providing government and industry with an option for third party assessment of testing & calibration labs. A laboratory wishing to be accredited by NABL has to satisfy the requirement of ISO/IEC/17025:2005 or ISO 15189.
The application of new materials must be justified properly in regard of their impact on human health to create trust among consumers/public. Proactive governance is required to address these issues efficiently by development of material safety data sheets and health specific standards for new materials during their developmental stages.


Focus area 1: Share of accredited laboratories

At present less than 1% of the testing laboratories are approved by NABL in India. As a result, accredited laboratories are also overburdened to deliver timely and efficient services. NABL should aim to increase the share of laboratories with accreditations to 5% by 2017. However, the accreditations are valid for only two years with laboratories having to apply for renewals. Many laboratories find this cumbersome, which results in several accreditations expiring or lapsing after two years. Simpler processes and temporary service tax exemptions and concessions for NABL-accredited laboratories could motivate more non-accredited laboratories to seek accreditation.


Focus area 2: Mandatory certification for five enabling technologies

In addition to boosting the infrastructure for testing and certification, strong regulations to penalise non-compliance with product quality standards must be introduced and enforced. ISI certification should be made mandatory for products using any of the five enabling technologies. Enforcement of penalties to deter the production and sale of inferior quality products, especially in biotechnology and nanotechnology, which have a direct bearing on the health sector, is a key follow up requirement. Continuous monitoring and recording of product quality data will allow the regulators to detect persistent issues and entities which arc primarily responsible for the same. Accreditation is the need of the hour. There is an ever increasing need of good quality products from India.

Current Agenda