Developments in the Biotechnology Sector in India
The Government of India has increased its focus over the country’s biotechnological sector by enabling its growth at a compounded annual growth rate (CAGR) of approximately 20 per cent since the past decade. This industry in India has reached an estimated level of Rs. 20,441 crore (US$ 3.8 billion) in value over the past many years and it has been predicted that it shall even reach Rs 55,300 crore (US$ 10.4 billion) within the next few years. At present, given the increased availability of skilled manpower, improved infrastructure as well as the presence of strong regional markets, forecasts project that attaining a much more ambitious growth rate of approximately 30 per cent, taking the industry to a value of Rs 5,50,000 crore (US$ 103.7 billion) by 2025, is actually a real possibility to consider. This ambitious and increased rate of growth has been made possible only due to the robust performance of all the sub-sectors of the Indian biotechnology industry, like the bio-pharmaceuticals, bio-services, agri-biotech, bio-industrial and the bio-informatics industry. As of today, bio-pharmaceuticals makes up for the largest sub-sector of the industry, while the agri-biotech industry has been the fastest as far as growth is concerned. Moreover, if we look at the top 10 biotechnology companies in India by the revenue earned by them, atleast six of these specialise in bio-pharmaceuticals and four specialise in the agri-biotech industry.
India has always been one of the world’s leading manufacturers of vaccines, comprising of over fifteen companies that currently manufacture for more than 50 brands in total. Furthermore, India is fast becoming the preferred destination for contract researches as well as manufacturing services (CRAMS) because of the availability of skilled manpower at low costs along with a large number of patients and a very strong support received from the government. As a result of this, this industry has grown at a CAGR of more than 50 per cent in the past decade and is expected to reach a market size of US$ 7.6 billion soon.
Estimated Growth opportunities within the industry
- While it has been difficult to earmark exact estimates, experts have been able to determine the market to grow at a CAGR of 30 to 35 per cent in the near future. Because of this extreme rate f growth within this sector, India’s contribution within the global clinical trials (which also includes all pre-clinical trials comprise of approximately 80 per cent of the domestic contract research market) is expected to increase from 3 to 5 per cent soon.
- India’s most noteworthy achievement within the agri-biotech industry over the past decade has been the successful cultivation of genetically modified Bt. Cotton. The success of this project has resulted in various kinds of socioeconomic benefits to India. This cultivation of Bt Cotton in India now exceeds 10 million hectares which and has significantly increased the yield, while also, simultaneously decreasing the use of pesticides by approximately 50 per cent. The advantages which accrued from this development led to the benefit of more than seven million small scale farmers who had been living below the poverty line prior to this innovation.
- India’s biotechnology industry is well in need of some major assessment as to the factors contributing to its growth in order to ensure sustainable development as well. As for the current boom in biotechnology in India and the advent of global biotechnology players, several initiatives have been taken by both the government and the private sector to propagate this extreme growth in our country. This is clear from the increased government funding for the Department of Biotechnology (DBT) by nearly four times.
- Not only has the government increased its funding within this sector but has also added additional funds from the private sector which has resulted in the formation of numerous biotechnology parks and Special Economic Zones (SEZ) across the country, targeted specifically at incubating biotech companies and propagating research. By the end of 2011, India had 26 operational biotechnology parks with key clusters emerging in Andhra Pradesh, Karnataka, Tamil Nadu, National Capital Region (NCR), Maharashtra, Gujarat, and some parts of Rajasthan.
Initiatives undertaken by the Government and the Regulatory environment
The Government of India has begun to provide grants and forming investment friendly policies in order to accelerate the biotechnology industry’s growth. The government has now allowed 100 per cent foreign direct investment (FDI) through the automatic route to produce drugs and pharmaceuticals and set up the Department of Biotechnology (DBT). The department is a part of the Department of Science and Technology (DST) and is responsible for making policies related to the biotechnology industry.
This department has been instrumental in accelerating the growth of the Indian biotechnology industry, with specific focus on human resources and infrastructure development as well. The government has also proposed the formulation of the Biotechnology Regulatory Authority of Indi which would be an independent legal body constituted for the management of the production, research, transport, import and usage of organisms and other modern biotechnology products in the area. They have also established the Biotechnology Industry Research Assistance Council for assisting with high end innovation in the industry through the provision of adequate infrastructure facilities along with various other essential services. Amongst their other initiatives, the government has established a venture fund of Rs 12,100 crore (US$ 2.3 billion) for financing the new drug discovery projects as well.
Schemes and Subsidies provided by the Indian Government
The Biotechnology Industry has emerged as a very important part of the Indian bio-economy which has resulted in an incredible boom for the economy in general. The previously estimated value of this industry was USD 44.47 billion in 2017 with a staggering growth rate of 6.8% from 2016 onwards. Furthermore, the projected target for the government is to reach the market size value of USD 100 billion by the year 2025. At present, the Indian biotech industry constitutes about 3% of the global market share and is the third largest in the Asia-Pacific region. The DBT along with BIRAC has been instrumental in the implementation and delivery of the flagship programs of the Government of India, such as ‘Make-in- India’ and ‘Startup India’ schemes for this sector.
Make in India (MII)
The “Make-in-India” initiative is a flagship program which had been launched on September 25, 2014 by the Government of India. Due to the reason that India’s biotechnology industry is still in the growth phase wherein the opportunities are immense, this sector was chosen as one of the champion sectors in the Make-in-India initiative. Due to this fact, the DBT had entrusted the responsibility of the growth of this industry to BIRAC for the establishment of the Biotechnology Industry Facilitation Cell.
The following major activities had been undertaken under this scheme:
- There is a Make-in-India Cell established for ensuring a wider dissemination of the Government programmes and other information which is relevant to the establishment and the growth of startups, SMEs and companies.
- Post the successful completion of the Make-in-India program 1.0, the facilitation cell at BIRAC under the guidance of the DBT has formulated the Make-in-India Action Plan 2.0.
- Hence, this Make-in-India Facilitation Cell at BIRAC is also involved in all of the communication and outreach activities for the dissemination of various initiatives of DBT and BIRAC alike.
- Furthermore, a strategy meet had been organized in July 2018 in order to discuss the road map for achieving the $100 Billion Bio-economy of India by the year 2025. The DBT & BIRAC have already begun implementing the recommendations and suggestions for improvements.
- Boosted with the goal of promoting Make-in-India, BIRAC & the Kalam Institute of Health Technology (KIHT) had partnered to facilitate all start-ups, entrepreneurs, researchers, academicians, incubation centres & SMEs within the area of testing & standardization of all medical devices. Their Cell specifically monitors Start-up India and the Make-in-India action plan mandated activities while promoting the respective scheme coordinators.
Start-up India Initiative:
Another major flagship initiative established by the Government of India is the Start-up India initiative, intended to build a strong eco-system for nurturing innovations and start-ups all over the country in order to drive sustainable economic growth and generate
large scale employment opportunities within the country. The Government has aimed to empower start-ups to grow through innovation and design through the imlementation of this initiative.
Activities under the Start-up India Initiative:
- At present 35 Bio-incubators have been established all across India with world class facilities and technology.
- The First International Incubator which is the “Clean Energy International Incubator” has been established under Mission Innovation by DBT & BIRAC. Moreover, start-ups from about 23 participating EU countries can now potentially come & incubate in India and likewise start-ups from this incubator can also go to the partnering countries while facilitating access to global opportunities. At present, the department is supporting 4 Bio-clusters (NCR, Kalyani, Bangalore and Pune)
- The ACE Fund and he SEED fund have been launched in order to provide capital assistance to start-ups and act as a bridge between promoters’ investment and venture and angel investors.
- BIRAC Regional Center has established 3 regional centres and 2 Bio connect offices for the purpose of facilitating this industry better.
- FIRST (Facilitation of Innovation and Regulations for Start-ups and Innovators) HUB is a body which has been created at BIRAC for resolving the queries of start–ups, entrepreneurs, researchers, academicians, incubation centres, SMEs etc. The first Hub has even acquired representations from CDSCO, ICMR, DBT, BIS, NIB and BIRAC along with KIHT. This brings stakeholders to a single platform together.
- Lastly, the DBT has been instrumental in organizing national workshops for the facilitation of the resolution of all the regulatory concerns faced by the innovators. Within these workshops the regulators are reaching out to innovators now, in order to help them resolve their regulatory issues and handhold them to get market authorization.
Investments, Joint Ventures and Partnerships
The drugs and pharmaceutical industry has in itself attracted approximately Rs 9,000 crore (US$ 1.7 billion) worth of investment over the previous decade and more than Rs 17,500 crore (US$ 3.3 billion) in recent times in the form of FDI. As per the data provided by the European Business and Technology Centre, a lot of the large scale investments made in the Indian biotechnology sector are as follows:
- The UNICEF had awarded a three year contract of Rs 1,223 crore (US$ 230.6 million) to Panacea Biotech Ltd, to provide the UNICEF with the EasyFive vaccine. These vaccine provide immunity against a set of paediatric diseases in children.
- Alexandria Real Estate has made an investment of Rs 588 crore (US$ 110.9 million) for the setting up of an R&D and biotech incubation facility in Gujarat after having applied for 25 acres of land in 2009.
- The Defence Research and Development Organisation (DRDO) further planned to invest Rs 349.2 crore (US$ 65.8 million) for customising its biotechnology products for common use.
- Moreover, Biocon acquired its previously formed joint venture Biocon Pharmaceuticals from its partner CIMAB, based in Cuba, through buying a 49 per cent stake in CIMAB in 2010.
