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By Harilal Bhaskar
India stands at a crucial crossroads in its scientific and technological journey. With growing ambitions to become a global innovation hub, the country has witnessed remarkable progress in research and development (R&D). Yet, an overlooked obstacle limits India’s potential—the Goods and Services Tax (GST) levied on scientific infrastructure usage and research consumables. Reforming GST policies to exempt research-related goods and services is essential to democratise access to scientific facilities, accelerate innovation, and strengthen collaborations between academia and industry.
Publicly funded research centres, universities, and startups rely on expensive, cutting-edge scientific equipment—from electron microscopes to high-throughput sequencers and specialised chemical analysers. These instruments drive innovation across healthcare, agriculture, clean energy, and manufacturing. However, each time researchers book lab time or procure consumables like reagents or chemicals, they face GST ranging from 5-18%, significantly inflating operational costs. For many early-career scientists and small startups with limited resources, these costs are prohibitive.
Consider a startup developing biodegradable plastics. Each experiment requires multiple rounds of chemical testing involving reagents and equipment use. When GST applies to every purchase and booking, costs can double their budget, forcing reduced experimentation frequency or delayed tests. Such financial barriers stifle creativity and slow the trial-and-error essential for breakthroughs. In healthcare, teams working on affordable diagnostics for diseases like tuberculosis face similar challenges. The constant taxing of consumables and testing delays innovations reaching patients.
Beyond individual labs, these GST charges have systemic consequences. High rates on scientific infrastructure usage discourage frequent access, leading to underutilisation of national laboratories and public research facilities. Instruments bought with taxpayer money often sit idle because smaller players cannot afford the cost.
Micro, small, and medium enterprises (MSMEs), the backbone of India’s innovation-driven economy, are disproportionately impacted. Imagine an MSME working on solar panel technology trying to optimise efficiency. Repeated testing is critical, but taxing every material and lab session makes this financially unsustainable. This hinders locally made products and delays market entry. Consequently, India’s research ecosystem skews toward well-funded institutions, widening disparities in access to science and technology. This opposes India’s vision of inclusive innovation, where every capable mind—regardless of geography or financial backing—can contribute to progress.
Leading research economies have recognised that lowering financial barriers catalyses innovation. The US and many European countries exempt essential research materials from sales taxes or offer subsidies for lab usage. Asian powerhouses like South Korea, China, and Singapore go further, providing tax credits and full exemptions for corporate R&D. Israel’s vibrant startup ecosystem benefits from tax relief on scientific infrastructure and consumables, accelerating product development. These countries know that accessible, affordable scientific infrastructure fuels entrepreneurship, attracts global collaborations, and produces discoveries.
India risks falling behind if it does not align tax policies with these global best practices. GST reform would spur domestic innovation and invite foreign researchers and companies to collaborate with Indian institutions.
Removing GST on scientific infrastructure and research consumables is not merely a financial adjustment—it is a structural reform that could transform the research ecosystem. Such a policy would make lab access affordable for early-stage researchers and MSMEs, encouraging more experiments and faster learning cycles. It would also strengthen industry-academia partnerships by lowering costs for joint research in public labs. Utilisation of costly national equipment would increase, maximising returns on public investment.
On the regional end, equitable access to advanced technology across regions and institutions would be promoted, democratising innovation opportunities. Patent filings and startup formation could also see a boost by reducing barriers to prototype development. Finally, such a policy will enhance India’s attractiveness as a global R&D destination, drawing talent and investment.
Complementing GST reform, India should adopt digital platforms to monitor and manage scientific infrastructure usage nationwide. An integrated online booking system and anonymised analytics would reveal demand patterns and equipment underutilisation. Data-driven governance would enable targeted investments—upgrading high-demand instruments and phasing out obsolete ones. Transparency would build public trust and ensure optimal use of government resources. Moreover, tax incentives could be linked to startups co-developing technologies within government labs, fostering faster transition from research to market-ready innovations.
India’s scientific ambitions cannot be achieved without supportive fiscal policies removing unnecessary obstacles. Exempting research-related goods and services from GST is a strategic reform that can unlock the nation’s full innovation potential. By making scientific infrastructure accessible and affordable, the government empowers researchers, MSMEs, and startups to explore ideas freely, collaborate effectively, and bring homegrown innovations to life.
Science and technology are public goods whose benefits ripple across society. Reforming GST to support R&D growth is not just a tax policy change — it is a bold step toward a more inclusive, dynamic, and globally competitive India.
The writer is Chief Operating Officer and national coordinator, I-STEM.
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