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August, 2012


The Indian biotechnology market accounts for around 2 per cent of the global market and ranks amongst the leading twelve biotechnology industries globally. The sector is the third largest in Asia, after Japan and South Korea.

Exports continue to account for the largest share in the revenues of the Indian biotechnology industry, reflecting the continued focus of Indian biotech companies on international markets. While segments such as bio-pharma, bioinformatics and bio-services represented substantial chunk of the export market, bio-industrial and bio-agriculture generated a major share of revenues serving the domestic market.

Western India's domination of the Indian biotech industry continues, accounting for the largest share in the industry in terms of revenues. However, the southern region, with biotech hubs such as Bengaluru and Hyderabad, represent the largest in the country when it comes to the number of companies.

Over 350 companies operate in the biotechnology sector in India. Leading the suite include Biocon, Serum Institute of India, and Panacea Biotech.

Market Size

The biotechnology industry in India has been growing at a compound annual growth rate (CAGR) of 19 per cent rate over the last five years, according to a report by Ernst & Young. The industry size stood at US$ 4 billion for FY 2010-11. It is expected to reach over US$11.6 billion by 2017, according to a new report Global Industry Analysts, Inc. The market will be driven by foreign investment, growing R&D and infrastructure investment, an emerging contract research market, drug discovery and growth in manufacturing outsourcing to India.

Growth is also expected to emanate from indigenous factors such as rich biodiversity, increasing size of population, rising incidence of lifestyle diseases, large pool of skilled scientists, substantial infrastructure facilities, and supportive governmental policies.

The biopharmaceutical industry constitutes 60 per cent of the biotech industry in India and grew at 21 per cent y-o-y to reach US$ 2.3 billion in 2010-11, which is approximately 15 per cent of the Indian pharmaceutical industry in value terms. Vaccines, insulin, erythropoietin and monoclonal antibodies have been the mainstay of the biopharma segment.


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$ 41.21 million) in the month of May 2012.

The industry saw three mergers and acquisitions (M&A) deals worth US$ 139.5 million in the month of July 2012.

Some of the major investments in the sector are as follows:

  • Novozymes and the Holck-Larsen Foundation have joined hands to set up a scientist exchange programme between India and Denmark. The programme will run from 2013 to 2019, and each year 25 scientists will participate in exchange visits
  • Abbott Laboratories plans to establish its research and development (R&D) centre in India in collaboration with Syngene, a contract research subsidiary of Biocon Ltd, to develop nutrition products in India
  • MSD, the Indian unit of US-based pharmaceuticals major Merck, plans to set up a laboratory for developing vaccines with an investment of Rs 750 crore (US$ 134.70 million). The lab is set to come up at Delhi's Jamia Millia Islamia University campus and will focus on developing vaccines pertaining to various diseases prevalent in tropical countries
  • Nova Specialty Surgery has raised Rs 300 crore (US$ 54 million) from Goldman Sachs and existing investor New Enterprise Associates, to expand its network of centres and fertility clinics in India
  • Gilead Sciences Inc will work with three Indian drug makers to promote access to a chunk of its portfolio of approved HIV-fighting treatments in developing countries