The Indian Biotechnology sector is one of the major knowledge based sectors in India and is contributing significantly to shaping India's rapidly growing economy.
Biotechnology is a recent development in the field of science and technology. Biotechnology as the name suggests is the combination of biology and technology and is an applied science. It is concerned with variety of subjects including biochemistry, genetics, microbiology, chemistry and engineering. Biotechnology has wide areas of application in agriculture, animal husbandry, development of medicines and vaccine, treatment of prolonged disease, pollution control and waste management and ecological conservation, energy production and conservation and many more.
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.
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).
Biotechnology in India is based on a network of nearly three hundred national laboratories and about an equal number of universities. The national laboratories operate under various departments or agencies of the Government of India, predominantly the Council of Scientific and Industrial Research (CSIR), the Indian Council of Agricultural Research (ICAR), the Indian Council of Medical Research (ICMR), the Department of Science and Technology and the Department of Biotechnology, among others. All of them have contributed to the emergence of biotechnology as major technological area in the country.
The biotechnology sector in India is expected to achieve 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 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.
Investments, together with outsourcing techniques and exports, are crucial for growth in the biotech sector.
According to data released by the Department of Industrial Policy and Promotion (DIPP), the drugs and pharmaceuticals sector has attracted foreign direct investment (FDI) worth Rs 54,780.65 crore (US$ 8.81 billion) between April 2000 and September 2013.
Some of the major investments in the sector are as follows:
The Government of India has set up the Department of Biotechnology under the Ministry of Science and Technology in 1986. Public funding in the science and technology sector has been on the rise by 8 times in the last 20 years. The Indian government also provides several fiscal initiatives including relaxed price control for drugs, removal of foreign ownership limits, subsidies on capital expenses, and tax holidays for R&D spending.
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.
Besides the central government initiatives, individual states are also doing their bit to promote the biotechnology industry. Karnataka takes the lead and the state's revised biotech policy offers many fiscal incentives and concession to prospective investors in the industry.
Some of initiatives taken by the Government to further promote the sector are as under:
India's biotechnology industry is expected to play a key role in sustaining future growth. The advancements in various sub-sectors of the industry, such as bio-pharmaceuticals, agri-biotech, bio-informatics, and bio-services are expected to address some of the nation's key challenges such as food scarcity, energy deficit and unmet medical needs.
With the growth in the customer base and more investments taking place in the biotech sector, the biotech industry is expected to grow to around Rs 440,000 crores (US$ 70.84 billion) by the year 2020.
India, with a share of over 2 per cent in the global biotechnology industry, is set to become one of the world's largest biotechnology hubs, especially due to the rapid development of the contract research outsourcing (CRO) and the contract research manufacturing markets in the country. It needs to build the country's R&D infrastructure, encourage public private partnerships, and lay down efficient regulatory frameworks to help the industry grow.
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.
Exchange Rate Used: INR 1 = US$ 0.016 as on December 16, 2013
References: Press Information Bureau (PIB), Media Report, Department of Industrial Policy and Promotion (DIPP), Department of Biotechnology