Transfer Pricing Associates

India's Strong Position on Intangibles

post Tuesday April 17, 2012



According to a study done by Global Intangible Trackers in 2007, part of the London based Brand Finance institute, India has the third highest estimated intangible assets component in the world, estimated at 74% of total enterprise value, followed by China (58) and UAE (55%).  The world average is around 68% of total enterprise value.  

The high intangible asset component percentage can be attributed to India’s place as frontrunner in the world software industry, as well as, to their growing healthcare, personal care, pharmaceutical and biotechnology industries.  In the 6-year period from 2001 to 2007, India’s intangible assets component in the world has grown by 18% (from 56% to 74%).  

India is expected to exceed the US and Switzerland, and take the place of the country with the highest value of intangible assets in the world. The increasing value of intangible assets as measured by the study in 32 different countries uses information from over 11,000 firms and shows the importance of intellectual capital.

The top 5 industries with the values of intangible assets above 90% are advertising, internet, software, health care services and cosmetics/personal care.  Forest products, paper and automobiles are on the lowest end, with under 30% of the total enterprise value.

Source: SME Business Services Limited


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