India’s pharmaceutical industry is currently the fourth largest in the world in terms of volume. India is now emerging as a new R&D hub for pharmaceutical sector. The aggregate R&D expenditure of 20 leading Indian pharma companies increased from Rs 2067 crore in the year 2005-06 to Rs. 2207 crore in 2006-07 . Many pharma companies are forging ahead in R&D on New Chemical Entities and Novel Drug Delivery System and making it an integral part of their strategy to attain long term advantage With its growing global presence, Indian pharma can play a lead role in contributing to global R&D in the area of neglected diseases which is very often ignored by the multinational corporations due to low commercial value of these products. Hence, national policies and programmers giving priority to public health over profits may help in steering the R&D in the right direction. At this juncture, the Ministry of Science & Technology, Government of India, has proposed a bill entitled Public Funded R&D Projects (Protection of Intellectual Property) Bill, intending to promote innovation and technology of transfer through Government-funded research.