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).
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: