The recent amendment in India's statute books to allow a product patent regime would affect neither the domestic prices of drugs nor their exports, Commerce Minister Kamal Nath said here Friday.

Addressing an impressive gathering at the annual meeting of the World Economic Forum, Kamal Nath sought to allay fears of a surge in domestic prices of medicines and said 97 percent of the drugs in India were off patents.

"The 12 anti retro-viral drugs, most used for AIDS and manufactured in India, cannot be patented as they are pre-1995 inventions. India will continue to manufacture, use and export them without hindrance," the minister said.

Kamal Nath, who is leading a 50-member Indian delegation to this picturesque Swiss ski resort that has become the networking hub for global business, was discussing the implications of the agreement on trade-related intellectual property rights (TRIPS) on the Indian healthcare industry.

"The global market for generic drugs is currently estimated at $40 billion and the expiry of patents on drugs worth $60 billion during the next five years offers huge opportunity to India," he told the session on "India Meets Doha."

India, Kamal Nath said, would take centre-stage in drug development in the near future, adding the country's $10 billion pharmaceutical industry currently ranked fourth globally in terms of volume and thirteenth in terms of value.

He said there were about 300 large and medium-sized pharma companies in India and 5,500 smaller ones, adding the country also accounted for the largest number of drugs approved by the United States Food and Drug Administration (FDA) outside America.

The minister, however, underscored the need for more spending on research and development, saying India accounted for less than 0.25 percent of the global outlay on such activity.

"But with higher patent protection, it is expected that more and more medical research would take place in India, given the cost advantage and large pool of technical and scientific talent in India," Kamal Nath said.

"India, in fact, is already emerging as a low cost centre for medical research. Many multinational firms from Europe and America have tied up with local Indian multinationals to carry out research for new molecules."

In this regard he mentioned the names of home grown companies such as Nicolas Piramal, Cipla, Dr. Reddy's Laboratories, Ranbaxy Laboratories and Wockhardt.

Kamal Nath said India has not only world-class talent with requisite training but also some well-equipped manufacturing and research laboratories. There were synergies in the IT, biotechnology and medicine fields, he added.

"For a new drug to come to the market, the average cost is $810 million and takes 10-15 years in the Western countries. The global pharmaceutical industry, therefore, desperately needs strategies to bring down the cost."

The minister accordingly suggested outsourcing to India as an option that is gaining strength, adding it would provide cost benefits to giant pharma companies and a huge opportunity for smaller international firms.

"The first steps into drug Discovery have already been taken by many pharma companies in India through in-house research as well as partnership with global players," Kamal Nath said.

"The patent law in India - complying as it does with international norms for intellectual property - establishes India's credibility and enormous strength in basic research and drug discovery."

Science and Technology Minister Kapil Sibal, Rajasthan Chief Minister Vasundhara Raje and some of India's top industrialists and business leaders are part of the Indian contingent here.

N.R. Narayana Murthy, chief mentor of Infosys Technologies, along with Microsoft co-founder Bill Gates, was among the co-chairs of one of the high-profile meetings inaugurated by British Prime Minister Tony Blair Jan 26.