The Indian biotechnology sector is one of the fastest growing knowledge-based sectors in India and is expected to play a key role in shaping India’s rapidly developing economy. With numerous comparative advantages in terms of research and development (R&D) facilities, knowledge, skills, and cost effectiveness, the biotechnology industry in India has immense potential to emerge as a global key player.
The Indian biotech industry grew threefold in five years to report revenues of US$ 3 billion during 2009-11, a rise of 17 per cent over the previous year, according to the eighth annual survey conducted by the Association of Biotechnology-Led Enterprises (ABLE) and a monthly journal, BioSpectrum.
India has many assets in its strong pool of scientists and engineers, vast institutional network, and cost effective manufacturing. There are more than 300 college level educational and training institutes across the country offering degrees and diplomas in biotechnology, bio-informatics and the biological sciences, producing nearly 500,000 students on an annual basis.
India is recognised as a mega bio-diversity country. Biotechnology in India offers opportunities to convert the biological resources into economic wealth and employment opportunities. Innovative products and services that draw on renewable resources bring greater efficiency into industrial processes, check environmental degradation and deliver a more bio-based economy.
In fact, India has been ranked among the top 12 biotech destinations worldwide and third largest in the Asia-Pacific region. Key segments in the Indian biotechnology industry:
The biopharma sector contributed nearly three-fifth to the total industry’s revenues at US$ 1.9 billion, a rise of 12 per cent, followed by bioservices at US$ 573 million and bioagri at US$ 420.4 million. The remaining revenue came from the bioindustrials and bioinformatics segments, US$ 122.5 million and US$ 50.2 million, respectively. Biopharma and bioservices sectors contributed 63 per cent and 33 per cent, respectively, to the total biotech exports. The bioagriculture, bioindustrials and bioinformatics sectors remained focussed on domestic operations, bringing in nearly 90 per cent of their revenues from India. While the industry, spanning bio-pharma and agri-biotech, accounted for US$ 3 billion, the equipment and ancillary segment contributed around US$ 1 billion.
India’s biotechnology sector grew 33 per cent in FY11 and is expected to reach US$ 10 billion revenue by 2015 from US$ 3 billion. ABLE has chalked out a plan to make biotech a US$ 100 billion industry by 2025. A report ‘Indian Biotechnology: The Roadmap to the Next Decade and Beyond’ has been submitted to the Union Department of Biotechnology.
Biofuels would also offer a huge growth opportunity in biotech, according to Kiran Mazumdar Shaw, Chairman and Managing Director, Biocon.
Investments, along with outsourcing activities and exports, are key drivers for growth in the biotech sector.
The drugs and pharmaceuticals sector attracted foreign direct investments (FDI) worth Rs 229.45 crore (US$ 41.63 million) in the month of May 2012.
Some of the major investments in the sector are as follows:
- India’s biotechnology company Biocon has entered into an agreement with the US-based Bristol-Myers Squibb (BMS) to further develop its IN-105, an oral insulin product
- GE Capital has picked up 7.69 per cent stake in Syngene, a subsidiary of Biocon, for Rs 125 crore (US$ 22.68 million). Syngene, a contract research organisation, is into drug discovery and development services
- ABLE and US-based Washington Biotechnology and Biomedical Association (WBBA) have signed a memorandum of understanding (MoU) to enable co-operation in the field of biotechnology
- Biocon has entered into a partnership with Manipal Education Malaysia (MEM) for an internship and graduate employment program for students of Manipal International University, who will be trained and employed in Biocon’s Malaysian factory
- Abbott Laboratories will collaborate with Bangalore-based Biocon to establish a R&D centre to develop nutrition products in India. Abbott Nutrition Centre India will work with Syngene, the contract research arm of Biocon, to develop affordable products for maternal, child nutrition and diabetes care
- MSD, the Indian unit of US-based pharmaceutical major Merck, plans to set up a laboratory for developing vaccines with an investment of US$ 150 million. The lab, MSD Wellcome Trust Hilleman Laboratories (the Hilleman Labs), is a joint venture between Merck & Co, Inc (which operates in India as MSD Pharmaceuticals) and the Wellcome Trust (a London-headquartered research charity)
The importance of the biotech market in India and its prospective growth can be identified from the steps taken by the Government of India for further development of research and entrepreneurship initiatives in the country. The Department of Biotechnology (DBT) and the various Centres of Excellence provide the backbone of furthering research activities and laying the foundation for generating knowledge and trained manpower to assist entrepreneurship programs and the biotech private industry in India.
The Union Cabinet has approved the setting up of Biotechnology Industry Research Assistance Council (BIRAC) which aims to support the innovation and provide infrastructure and services across chains in the biotechnology sector in the country. The BIRAC will address the sector needs by providing a suitable environment to promote and support high end innovation in the biotech sector. This is basically aimed at creating more enterprising opportunities for small and middle-sized companies in the sector.
Some of initiatives taken by the Government to further promote the sector are as under:
- FDI up to 100 per cent is permitted through the automatic route for manufacturers of drugs and pharmaceuticals
- The Government of India plans to set up an Indian Institute of Agricultural Biotechnology at Ranchi with investments of Rs 287.50 crore (US$ 52.17 million). The institute will be a deemed university and will have different schools to import knowledge in genomics, bioinformatics, genetic engineering, nano biotechnology, diagnostics and prophylactis and basic and social sciences and commercialisation
- A National Biotechnology Council will be created to formulate model undergraduate and postgraduate curricular in life sciences and in translational science keeping in view future needs
- As an incentive for in-house R&D, the Government also provides 200 per cent weighted tax deduction, which has been extended till 2017 in this year’s budget
- A Rs 514 crore (US$ 93.27 million) proposal by Shantha Biotechnics for setting up a brownfield bio-genetics project was approved by the Foreign Investment Promotion Board (FIPB)
India is already being globally recognised as a manufacturer of economical, high-quality bulk drugs and formulations. With a huge base of talented, skilled and cost-competitive manpower, and a well developed scientific infrastructure, India has great potential to become a leading global player in biotechnology.
Protein and antibody production and the fabrication of diagnostic protein chips are a promising area for investment. Stem cell research, cell engineering and cell-based therapeutics is another area, wherein India will cash in its expertise.
India has the potential to become a major producer of transgenic rice and several genetically modified (GM) or engineered vegetables. Hybrid seeds, including GM seeds, represent new business opportunities in India based on yield improvement.
The country offers a suitable population for clinical trials because of its diverse gene pools, which cover a large number of diseases. Cost effectiveness, competition, and increased confidence on capabilities and skill sets have propelled many global pharmaceutical companies to expand their own clinical research investment in the nation.
Some other potential areas of development include medicinal and aromatic plants, animal biotechnology, aquaculture and marine biotechnology, seri biotechnology, stem cell biology, environmental biotechnology, biofuels, biopesticides, human genetics, genome analysis, and others.