Introduction

The biotechnology sector of India is highly innovative and is on a strong growth trajectory. The sector, with its immense growth potential, will continue to play a significant role as an innovative manufacturing hub. The sector is one of the most significant sectors in enhancing India's global profile as well as contributing to the growth of the economy.

India is among the top 12 biotech destinations in the world and ranks third in the Asia-Pacific region. India has the second-highest number of US Food and Drug Administration (USFDA)–approved plants, after the USA and is the largest producer of recombinant Hepatitis B vaccine. Out of the top 10 biotech companies in India (by revenue), seven have expertise in bio-pharmaceuticals and three spCSIalise in agri-biotech.

India has no dearth of talent in biotechnology, as a number of institutions, both government and autonomous, provide the necessary opportunities for the students seeking to obtain a degree in this sector. The Government of India has provided adequate scope to this sector by providing facilities for Research and Development (R&D) in the field of biotechnology.

Market Size

The Indian biotech industry holds about 2 per cent share of the global biotech industry. The biotechnology industry in India, comprising about 800 companies, is growing at an average rate of about 20 per cent. The Indian biotechnology sector is expected to grow from the current US $5-7 billion to US $100 billion by 2025, growing at an average rate of 30 per cent, as per Union Minister for Science and Technology Mr Harsh Vardhan.

Biopharma is the largest sector contributing about 64 per cent of the total revenue followed by bioservices (18 per cent), bioagri (14 per cent), bioindustry (3 per cent), and bioinformatics contributing (1 per cent).

The high demand for different biotech products has also opened up scope for the foreign companies to set up base in India. India has emerged as a leading destination for clinical trials, contract research and manufacturing activities owing to the growth in the bioservices sector.

Investments

India's biotech sector has attracted significant amount of attention over the past two decades. Several global companies have aggressively joined hands with Indian companies due to India's strong generic biotechnology potential. Some of the recent investments and developments in this sector are as follows:

• Canada's Centre for Commercialisation of Antibodies and Biologics (CCAB) has partnered with Zydus Cadila to manufacture antibody-based cancer treatments
• Shantha Biotechnics Private Limited has started building a facility to manufacture Insuman, an insulin product to treat diabetes. French pharmaceutical company Sanofi SA, which acquired Shantha Biotechnics in 2009 through its vaccines division, Sanofi Pasteur SA, is investing Rs 460 crore (US $69.31 million) to build the facility that, at full capacity, will produce 60 million Insuman cartridges annually, company executives said.
• Hyderabad headquartered vaccine manufacturer Indian Immunologicals Limited (IIL), part of the National Dairy Development Board, is setting up a new vaccine manufacturing facility in Puducherry involving an investment of Rs 300 crore (US $45.20 million). This is the fourth facility for IIL, which currently has two facilities in Hyderabad and one in Ooty.
• Bristol-Myers Squibb and Syngene International, the contract research subsidiary of Biocon, have announced a five-year extension of their drug discovery and development collaboration in India.
• The Bhabha Atomic Research Centre (BARC) through its Centre for Incubation of Technologies (BARCIT) has signed a Memorandum of Understanding (MoU) with M/s Veena Industries, Nagpur, for incubation of technology for biodegradable and edible films for food and pharmaceuticals packaging.
• Aurobindo Pharma announced that its Board of Directors have approved the proposal for setting up a Joint Venture (JV) with Tergene Biotech, a vaccine development company based in India. Tergene is currently working on development of the Pneumococcal Conjugate Vaccine (PCV) through use of novel vaccine technology compressing time and cost, thereby, making such vaccine available at an affordable cost.

Government Initiatives

A Network of Technology Centres and promotion of start-ups by Small Industries Development Bank of India (SIDBI) are among the steps taken by the Government of India to promote innovation and entrepreneurship in the agro industry proposed by the Ministry of Micro, Small & Medium Enterprises (MSME) in a new scheme. The Government of India has taken several initiatives to improve the biotechnology sector in the country as well as offer enough scope for research in this field. The Department of Biotechnology (DBT) along with other government funded institutions such as National Biotechnology Board (NBTB) and many other autonomous bodies representing the biotechnology sector, are working together in order to project India as a global hub for biotech research and business excellence. Some of the recent major initiatives are as follows:

• The Government of India aims to scale-up the number of start-ups in biotechnology sector to 1,500-2,000 over next two to three years from 500 currently.
• The Government of India is planning to launch a venture capital fund of Rs 1,000 Crore (US $154.3 million) under the department of pharmaceuticals, to support start-ups in the research and development in the pharmaceutical and biotech industry.
• The Government of Karnataka plans to raise Rs 50 crore (US $7.69 million) for a biotechnology-dedicated fund in addition to the existing Semiconductor Fund of Rs 100 crore (US $15.39 million) in order to engage with the emerging technology and biotech space in the state.
• CSIR-Institute of Himalayan Bioresource Technology (CSIR-IHBT) has signed an MoU with Phyto Biotech to formalise transfer of technology, for production of unique autoclavable super oxide dismutase (SOD) enzyme, used in cosmetic, food and pharmaceutical industries for end applications.
• DBT has announced the Indo-Australian Career Boosting Gold Fellowships under which it will support the researchers to undertake a collaborative research project at a leading science institute or university in Australia for a period of up to 24 months.
• DBT has allocated Rs 4.6 crore (US $0.69 million) to the University of Agricultural Sciences (UAS) to support a national multi-institutional project titled 'A value chain on jackfruit and its products'.
• Under the 12th Five Year Plan, the Government of India plans to strengthen regulatory science and infrastructure, which involves setting up of Biotechnology Regulatory Authority of India (BRAI) and a central agency for regulatory testing and certification laboratories.
• Foreign Direct Investment (FDI) up to 100 per cent is permitted through the automatic route for Greenfield and through the government route for Brownfield, for pharmaceuticals.
• National guidelines have been laid down to ensure that research with human stem cells is conducted in a responsible and ethical manner and complies with all regulatory requirements pertaining to biomedical research in general and of stem cell research in particular.

Provisions of 2015-2016 Union Budget:

• The Government of India has allocated Rs 7,288 crore (US $1.09 billion) in the Union Budget 2015-16 for conducting research, after an increase of Rs 1,793 crore (US $269.70 million) compared to the Budget of 2014-15
• Service tax exemption for services provided by operators of common bio-medical waste treatment facilities to a clinical establishment by way of treatment or disposal of bio-medical waste or processes incidental thereto.
• Refund of customs duty paid at the time of import of scientific and technical instruments, apparatus, etc. by public funded and other research institutions, subject to submission of a certificate of registration from the Department of Scientific & Industrial Research.

• DeprCSIation allowance on plant and machinery has been raised to 40 per cent from 25 per cent.
• Customs duty exemption on goods imported in certain cases for R&D.
• Customs and excise duty exemption to recognised Scientific & Industrial Research Organisations (SIRO).
• 150 per cent weighted tax deduction on R&D expenditure.
• A three year excise duty waiver on patented products.
• 100 per cent rebate on own R&D expenditure.
• 125 per cent rebate if research is contracted in publicly-funded R&D institutions. Joint R&D projects are provided with spCSIal fiscal benefits.
• The setting up of a venture capital fund to support small and medium enterprises.
• Promoting innovations through Biotechnology Industry Partnership Programme (BIPP), Small Business Innovation Research Initiative (SBIRI),
• Biotechnology Industry Research Assistance Council (BIRAC) and biotech parks.

Road Ahead

With the country offering numerous comparative advantages in terms of R&D facilities, knowledge, skills, and cost effectiveness, the biotechnology industry in India has immense potential to emerge as a global key player.

India constitutes around 8 per cent of the total global generics market, by volume, indicating a huge untapped opportunity in the sector. Outsourcing to India is projected to spike up after the discovery and manufacture of formulations. Hybrid seeds, including GM seeds, represent new business opportunities in India based on yield improvement.

India currently has a marginal share in the global market for industrial enzymes that is estimated to reach about US $4.4 billion by 2015. Hence, there is an opportunity in focused R&D and knowledge-based innovation in the field of industrial enzymes, which can innovatively replace polluting chemical processes into eco-friendly processes that also deliver environmental sustainability. Another interesting field of study is the area of bio-markers and companion diagnostics, which will enable to optimise the benefits of biotech drugs.

India has all the ingredients to become a global leader in affordable healthcare. If there is an annual investment of US $4.01 billion to US $5.02 billion in the next five years, the biotech industry can grow to US $100 billion by 2025, with a 25 per cent return on investment, and set a growth rate of 30 per cent year-on-year.

Exchange Rate Used: INR 1 = US $0.0151 as on November 15, 2015

References: Press Information Bureau (PIB), Media Reports and Press Releases, Department of Industrial Policy and Promotion (DIPP), Department of Biotechnology.

Disclaimer: Council for Start-up India is not responsible for any errors in the information.