It is the third big investment the firm is making in India in less than three months.
The new $8m (€5.8m) R&D centre, located near AMRI's existing chemistry plants, will provide additional space for the company's laboratory-scale Indian operations.
The new facility includes labs for conducting early-stage research such as custom chemical synthesis and analytical chemistry, while scale-up labs for preparing both preclinical and clinical trial supply of pharmaceutical active ingredients (APIs) are expected to open later this year and in 2008, respectively.
Those larger laboratories will be used to develop methods to produce APIs and intermediates.
During the first phase of the expansion, the new R&D centre will add around 100 new staff to the company's operations in Hyderabad, which currently has 35 scientists.
Furthermore, infrastructure has been added at the new site to allow a second facility to be built in the future, which would more than double the workforce.
"In addition to expanding our capabilities in India, this new research facility increases our capacity to provide customers with a flexible range of drug discovery and development services out of Asia - all with the same quality they have come to expect from AMRI around the world," said Chairman, CEO Thomas D'Ambra.
The company, which has suffered of late from sub-optimal profitability at its large scale manufacturing facility in Renhsselaer, New York, is increasing its stakes in India where it recently signed a deal to acquire two pharmaceutical production sites for $11m - one in Aurangabad and the other in Navi Mumbai.
"We look forward to achieving synergies between these new development laboratories and our large scale manufacturing facilities," added D'Ambra.
AMRI has been investing heavily in its early-stage and small scale capabities as they are the highest performing segments of its business, since its royalties earning from global sales of Allegra have substantially decreased in the past couple of years due to the launch of a generic version by Barr and Teva Pharmaceuticals in the US in 2005.
Since then the company has been increasingly relying on its contract services business which performed relatively well in the second quarter, generating $39.9m, up 4 per cent compared to $38.4m in the same quarter last year. The business includes discovery services, small scale manufacturing and large scale manufacturing services.
The best performer of the contract business was the development and small scales manufacturing segment which generated a $10.6m in the quarter, a 25 per cent increase compared to the second quarter of last year. The company said the improvement resulted from "continued strong demand for this type of services".
Sales in the discovery services segment also increased, by 6 per cent to $9.7m, a jump attributed by the company to "higher demand for these services in the US and Singapore".