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Indian Biotechnology Industry: an overview

August, 2013


Biotechnology deals with the application of biological knowledge and techniques pertaining to molecular, cellular and genetic processes to develop significantly improved products and services. The applications of biotechnology range from agriculture, industrial and medical biotechnology.

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.

In fact, India has been ranked among the top 12 biotech destinations worldwide and third largest in the Asia-Pacific region.

The sector can be divided into the segments of bio-pharmaceuticals, bio-services, bio-agriculture, bio-industrial and bio-informatics. Nearly 64 per cent of the biotech companies operate in the bio-pharma sector, followed by the bio-services (18 per cent), bio-agri (14 per cent), bio-industrial (3 per cent) and lastly the bio-informatics sector (1 per cent).

Market Size

The biotechnology sector in India is expected to achieve a revenue of US$ 11.6 billion by 2017, growing at a compound annual growth rate (CAGR) of 22 per cent, according to a recent report by Ernst & Young (E&Y). The key growth drivers of the US$ 4.3 billion industry include strong domestic demand for biotech products, growth in contract services, focus on research and development (R&D) initiatives and strong government support for the sector.

Revenue from biotech exports reached US$ 2.2 billion in FY13, accounting for more than half (51 per cent) of total industry revenues. During FY05 and FY13, revenue from exports increased at a CAGR of 25.1 per cent to US$ 2.2 billion from US$ 0.4 billion.

Bio-pharma export revenues contributes more than 64.5 per cent to total export revenues in the biotech industry; exports from this segment grew at 25 per cent to US$ 1.4 billion in FY13. The bio-informatics sector reported maximum growth (more than 33 per cent) in export revenues in FY13.


Investments, along with outsourcing activities and exports, are key drivers for growth in the biotech sector.

Foreign direct investment (FDI) up to 100 per cent is permitted through the automatic route for manufacturers of drugs and pharmaceuticals.

According to data released by the Department of Industrial Policy and Promotion (DIPP), the drugs and pharmaceuticals sector has attracted FDI worth Rs 54,321.68 crore (US$ 8.15 billion) between April 2000 and June 2013.

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

  • Bharat Biotech launched the world's first clinically proven conjugate Typhoid vaccine 'Typbar-TCV', which offers long-term protection and can be given to children as young as six months
  • Roselabs Biosciences Ltd has set up fully integrated pre-filled syringes (PFS) manufacturing unit in Ahmedabad with an investment of Rs 400 crore (US$ 60.04 million)
  • A modern computational systems biotechnology laboratory has been set up at the Biotechnology Department of Sri Venkateswara College of Engineering, Sriperumbudur
  • Roselabs Biosciences Ltd plans to raise about Rs 100 crore (US$ 15.01 million) over the next 18 months through private equity (PE) from a global investor in pharmaceutical sector for in-house research and development (R&D) of active pharmaceutical ingredients (APIs)
  • Biocon has launched a new biologic that could treat patients with psoriasis
  • Biocon has entered into an agreement with Mylan for the global development and commercialisation of Biocon's generic insulin analog products (long lasting insulins), which has a global addressable market of US$ 11.5 billion

Government Initiatives

The Indian Government’s increased focus on the country’s biotechnology industry has enabled it to grow at a CAGR of approximately 20 per cent over the past decade. The biotechnology sector in India has reached an estimated size of Rs 20,441 crore (US$ 3.06 billion) in value over FY12, and is forecasted to reach Rs 55,300 crore (US$ 8.30 billion) by 2015. However, given the availability of skilled manpower, improved infrastructure, and the presence of strong regional markets, analysts project that attaining an ambitious growth rate of approximately 30 per cent, taking the industry to a value of Rs 5,50,000 crore (US$ 82.57 billion) by 2025, is a possibility.

Some of initiatives taken by the Government to further promote the sector are as under:

  • Karnataka Biotechnology and Information Technology Services (KBITS) has signed two MoUs with Scottish Development International (SDI) and Georgia Department of Economic Development at Bangalore India Bio
  • Association of Biotechnology Led Enterprises (ABLE) and US-based Washington Biotechnology and Biomedical Association (WBBA) have signed a MoU to enable co-operation in the field of biotechnology
  • The Government of India has disbursed Rs 205 crore (US$ 30.77 million) as scholarships for women scientists under the Women Scientists Scholarship Scheme (WSSS), Ministry of Science and Technology
  • The Association of Biotech Led Enterprises (ABLE) is leading an Indian delegation to Biotechnology Industry Organisation (BIO) International Convention, to be held at Boston, US. ABLE plans to showcase biotech parks established (and under establishment) in various States to attract global biotech industries to India
  • The Government of India plans to set up an Indian Institute of Agricultural Biotechnology at Ranchi with an investments of Rs 287.50 crore (US$ 43.16 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 prophylactics and basic and social sciences and commercialisation

Road Ahead

Vaccines and recombinant therapeutics are the leading sectors driving the biotechnology industry’s growth in India. Newer therapies are anticipated to launch in the next few years, prominent among these are monoclonal antibodies products, stem cell therapies and growth factors. The country’s huge population places it among the world’s largest markets for vaccines.

Protein and antibody production and the fabrication of diagnostic protein chips is 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.

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.

Exchange Rate Used: INR 1 = US$ 0.0150 as on August 30, 2013

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