BIOTECHNOLOGY IN INDIA: GROWING FAST, EXPANDING SLOW

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Picture Courtesy:  THE HINDU

Context

The biotech sector needs to overcome funding, infrastructure, and regulatory hurdles to achieve global leadership and scale innovation.

What is the Biotech Sector?

Biotechnology (biotech) is a high-growth, knowledge-based industry that uses living organisms, cells, or biological processes to create innovative products and technologies for human and environmental benefit, integrating biology, genetics, and engineering.

Examples  

Biopharmaceuticals

• Vaccines: India is the largest global producer.
• Biosimilars and generics: Produces affordable versions of complex biological drugs.
• Gene therapies and diagnostics: Develops advanced tests and personalized medicine.

Bio-Agriculture

• Genetically modified (GM) crops: Creates higher-yield, pest/disease/drought-resistant crops.
• Bio-fertilizers and bio-pesticides: Provides eco-friendly alternatives to chemical products.
• Climate-resilient crops: Engineers crops to withstand extreme weather.

Bio-Services

• Contract Research and Manufacturing Services (CRAMS): Provides research and manufacturing support.
• Clinical trials: Conducts trials for new drugs and medical devices.
• Biotechnology parks and incubators: Supports biotech startups with facilities and mentorship.

Bio-Industrial

• Biofuels: Converts biomass into renewable fuels (e.g., second-generation ethanol).
• Biopolymers and enzymes: Produces sustainable alternatives to plastics and chemical catalysts.
• Waste management: Uses microorganisms to treat waste and create byproducts.

Bio-IT

• Bioinformatics: Uses computational tools to analyze biological data (e.g., DNA sequences).
• Genomics and data analytics: Analyzes genetic data for research, drug discovery, and healthcare.

Status of Indian Biotech Sector

Market Size & Growth

Sector is rapidly growing, from 500 startups in 2018 to over 10,000 in 2025, supported by 94 incubators. This growth is driven by affordable R&D, a diverse talent pool, and digital integration. (Source: The Hindu)

Government aims for a $300 billion bioeconomy by 2030, with initiatives like the BioE3 Policy.

Global Leadership in Vaccines & Generics

India supplies over 60% of global vaccine doses and is a major provider of generics, known as the "Pharmacy of the World." The Oxford-AstraZeneca-SII collaboration during COVID-19 exemplified this.

Companies like Serum Institute of India and Bharat Biotech are global leaders in affordable vaccines, while MedGenome drives precision medicine breakthroughs.

Why Does India's Expansion Face Challenges?

Funding Challenges: Growth Stalled After Early-Stage Success

India’s biotech sector has witnessed a rise in early-stage startups, but struggles to secure growth and late-stage funding necessary for commercialization and scale-up.

Late-stage funding deficit

• In 2023, Indian biotech scale-ups received only $3 billion, compared to China’s $12 billion. (Source: The Hindu)
• Lack of capital in later rounds restricts the ability to fund Phase II/III clinical trials and build GMP facilities, leading to value leakage as promising startups are acquired by global players.

Low R&D expenditure

• India’s Gross Expenditure on R&D (GERD) remains at 0.6% of GDP (2024), far behind China (2.4%), USA (3.5%), and Israel (5.4%). (Source: timesofindia)
• The low investment limits high-risk, long-term innovation needed for frontier biotech solutions.

Infrastructure Inadequacies: Fragmented and Uneven

India has expanded its incubator network, yet infrastructure remains fragmented and unequally distributed across regions.

Fragmented facilities

• India hosts over 95 bio-incubators, but only a few provide end-to-end facilities for advanced R&D and GMP-grade manufacturing.
• Startups must often move between multiple cities to complete product development cycles, causing delays and duplication of costs.

Regional disparities

• As per the India BioEconomy Report 2024, five states — Maharashtra, Karnataka, Telangana, Gujarat, and Andhra Pradesh — contribute over two-thirds of total bioeconomy output.
• Eastern and northeastern states account for less than 6%, indicating uneven development and limited biotech penetration.

Ecosystem fragmentation

• India’s biotech ecosystem is often described as “wide but not deep.”
• Many incubators lack pilot-scale purification systems, fill-and-finish suites, and regulatory affairs expertise, essential for scaling biotech innovation.

Talent and Workforce Gaps: Abundance without Specialization

India’s large human resource base is offset by a skills mismatch and brain drain in specialized biotech domains.

Skilled labor shortage

• Only 51.25% of Indian youth were considered employable. (Source: Economic Survey 2023–24)
• Acute shortage exists in bioinformatics, bioprocess engineering, and regulatory compliance roles.

Brain drain

• More than 7.6 lakh Indian students went abroad for higher studies in 2024, according to Bureau of Immigration data shared in the Lok Sabha.
• Many biotech PhDs and researchers relocate due to limited domestic research opportunities and lower compensation.
• Specialized talent in CRISPR process engineering, GMP data integrity, and AI-driven biostatistics remains scarce.

Regulatory and Policy Constraints: Complex and Outdated

India’s regulatory framework has not evolved fast enough to match the speed of biotech innovation.

Outdated frameworks

• Existing laws are not fully equipped to handle AI-based therapeutics, CRISPR gene editing, or cell and gene therapy products.
• This creates uncertainty for innovators and investors.

GM crop hesitation

• Prolonged regulatory hesitation over genetically modified crops has slowed agricultural biotechnology, despite their potential to boost productivity and resilience.

Initiatives Taken by the Indian Government to Boost Expansion

BioE3 Policy & Vision 2030

The BioE3 Policy and an ambitious vision to create a $300 billion bioeconomy by 2030 provide a strategic roadmap and foster a conducive policy environment.

Startup India & BIRAC

The Startup India initiative, coupled with funding and mentorship from the Biotechnology Industry Research Assistance Council (BIRAC) (an industry-academia interface under DBT), supports early-stage biotech startups.

Production Linked Incentive (PLI) Schemes

PLI schemes for pharmaceuticals and medical devices incentivize domestic manufacturing, attracting Foreign Direct Investment (FDI). India permits 100% FDI in many biotech segments.

Bio-RIDE Scheme

Strategic thrust into biomanufacturing and biofoundry capabilities, aiming to establish India as a global hub for advanced biotech production.

National Biopharma Mission

Supports product development in biopharmaceuticals, including vaccines and biosimilars.

What Can Be Done to Accelerate Expansion?  

Consolidate and Deepen the Ecosystem 

Instead of dispersing resources across many fragmented incubators, India needs to consolidate efforts into a few robust clusters.

Establish Good Manufacturing Practice (GMP) in biotech hubs, jointly funded by the government, multinationals, and development finance institutions, pooling downstream equipment and expert services.

Bridge the Financing Gap

Create a dedicated biotechnology fund. This fund could provide matching equity or venture debt for companies that have demonstrated proof-of-concept but are not yet market-ready for large-scale investment.

Utilize blended-finance structures to attract institutional capital from insurance companies and pension funds, offering partial guarantees to cushion scientific risks.

Streamline Product Development through Late-Phase Trial Hubs

Establish a network of specialty centers within All India Institute of Medical Sciences (AIIMS) hospitals. These centers would dedicate ward space, imaging suites, and integrated electronic-health-record (EHR) systems exclusively for industry-sponsored clinical trials.

Harmonize ethics committees and centralize laboratories to reduce trial delays, ensure data integrity, and reassure international regulators.

Address Talent Challenges through a Reverse Brain Drain Initiative

Implement policies like tax holidays, relocation grants, and soft loans to attract post-doctoral scientists and top AI talent back to India.

Develop micro-credential courses in critical niche areas (e.g., CRISPR process engineering, GMP data integrity, AI-driven biostatistics) to ensure the workforce remains competitive and future-ready.

Way Forward for India’s Biotech Revolution

India's biotech revolution must be inclusive, ethical, and globally competitive. The path forward requires leveraging existing strengths and addressing systemic weaknesses.

Global Biomanufacturing Hub

Build on India's vaccine success to become a world leader in biomanufacturing for a wide range of biologics and advanced therapies, with the Bio-RIDE scheme as a critical driver.

Precision Medicine "For All"

Develop affordable, India-specific precision medicine solutions that cater to the country's diverse genetic and disease profiles, making advanced healthcare accessible to the masses.

Green Bio-economy

Link bio-agriculture and bio-industrial applications to rural development, promoting climate-resilient GM crops, sustainable biofuels, and biomaterials.

Ethical Governance and Public Engagement

Establish robust ethical guidelines for emerging biotech (e.g., gene editing, AI in healthcare) and actively engage with the public to build trust and ensure responsible innovation.

Strategic International Collaboration

Pursue partnerships with global leaders for knowledge sharing, technology transfer, and co-development of solutions for global public good.

Conclusion

The Biotech sector is growing, driven by innovation, government support, and global demand, despite challenges in funding, infrastructure, and regulations. To lead globally, India must enhance biotech hubs, attract investment, update regulations, and develop skilled professionals.

Source: THE HINDU

PRACTICE QUESTION Q. India’s biotechnology sector is thriving in innovation but struggling in scale. Analyze the key structural bottlenecks hindering the sector's transition into a global biomanufacturing hub. 250 words