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.
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: