India plans to invest in domestic pharmaceutical research and manufacturing to become a global biotechnology leader by 2030. However, weak IP protection could hinder growth. Efforts include a new Biotechnology Research Innovation and Entrepreneurship Development (BIO-Ride) scheme, the National Biotech Strategy 2021-2025, and collaborations with industry players like Merck Life Science. Challenges include the need for improved R&D infrastructure and stronger IP enforcement.
Key View
- India’s government will increase investments in domestic pharmaceutical research and manufacturing to support its goal to become a global biotechnology leader by 2030.
- However, a weak IP regime will pose downside risks to the sector’s growth potential.
- India will need to promote a more conducive R&D environment to ensure a sustainable pharmaceutical sector.
India’s government will increase investments in domestic pharmaceutical research and manufacturing to support its goal to become a global biotechnology leader by 2030. On September 18 2024, India’s Union Cabinet, chaired by Prime Minister Narendra Modi, approved a INR91.9bn (USD1.0bn) outlay for the new Biotechnology Research Innovation and Entrepreneurship Development (BIO-Ride) scheme. The scheme merges two existing programs under the Department of Biotechnology and is part of India’s broader effort to become a global leader in biotechnology by 2030. BIO-Ride will focus on the following objectives:
- Promoting bio-entrepreneurship for startups through the provision of seed funding, incubation support and mentorship to entrepreneurs.
- Offering grants and incentives for advanced R&D in areas like biopharmaceuticals.
- Facilitating industry-academia collaboration to accelerate the commercialisation of biologics.
- Nurturing human resources in the biotechnology sector through an integrated program on Human Resource Development to ensure skill building of the workforce.
In 2021, India also launched the National Biotech Strategy 2021-2025 to establish India as a bio-manufacturing hub. With significant investments, the strategy aims to create new biotech products, establish a strong infrastructure for R&D and commercialisation, as well empowering India’s human resources scientifically and technologically. A major highlight of the policy is the establishment of bulk drug parks and medical device industrial parks, both of which are intended to attract investments and enhance the manufacturing capabilities in critical biotech sectors. These industrial parks are set to become hubs for biotechnology-driven industries, fostering collaborations between private enterprises, research institutions and government agencies.
In addition to infrastructure development, the policy emphasises providing financial incentives aimed at boosting both new and existing biotechnology ventures. This includes capital assistance, operational support and incentives for employment generation thus encouraging large-scale investments and fostering an innovation-driven ecosystem. At the core of the policy is the promotion of synergy between industry and academia, ensuring that R&D is aligned with industry needs. This involves creating channels for technology transfer and commercialisation and supporting start-ups that drive biotechnology solutions. The policy also aligns with national initiatives, such as ‘Make in India,’ to enhance India’s global competitiveness. In the long-term, India aims to integrate its local biotechnology efforts into the international market and drive exports as well as attract foreign investments.
The pharmaceutical industry has reacted positively to the National Biotech Strategy and BIO-ride scheme. For instance, the Head of Process Solutions at Merck Life Science India reported that, ‘by fostering innovation-driven R&D, the policy aligns with the government’s ‘Make in India’ vision by promoting the creation of bio-based products.’ In August 2024, Merck Life Science in India also entered a partnership with Hyderabad-based Aragen, the contract development and manufacturing organisation (CDMO) arm of GVK group. The collaboration is aimed at streamlining the supply of equipment and technologies required for the manufacture and process development of biotech products such as monoclonal antibodies. Additionally, according to the India BioEconomy Report published in 2024, between 2021 and 2023, the cumulative number of biotech startups in India surged from 5,365 to 8,531, a 59% increase. This rise reflects a consistent upward trajectory since 2016, with a noticeable surge post-2020.
However, a weak IP regime will pose downside risks to the sector’s growth potential. The current legal framework for IP rights protection and enforcement in India is ineffective, posing significant risks to the pharmaceutical industry. From a policy standpoint, Section 3(d) of the Patent Act undermines incentives for biopharmaceutical innovation by preventing patentability for improvements unrelated to efficacy. A major challenge for biopharmaceutical applicants seeking marketing approval in India is the opaque and uncoordinated process between federal and state agencies. Four years after a medicine’s initial approval in India, simply obtaining a license from any state drug regulator is sufficient to manufacture and market the product, causing harm to innovators, and subsequent producers. In February 2024, the US Trade Representative (USTR) issued the 2024 Special 301 Report, highlighting India as a market with burdensome formalities for IP filing and extreme delays in processing, thereby limiting fundamentals for a healthy IP environment. An unpredictable IP regime may deter innovators from entering the market at the pace required by the National Biotech Strategy. This, in turn, could limit the transfer of technology and the attraction of skilled labor, both crucial for biotechnology research and innovation.
Due to deficiencies in IP protection, we maintain our forecast for India’s pharmaceutical growth. In 2023, India’s pharmaceutical market equated to approximately INR2.7trn (USD33.2bn) in sales, experiencing a y-o-y growth of 6.8%. By 2028, we forecast the region’s pharmaceutical industry to reach INR3.7trn (USD42.9bn), posting a five-year CAGR of 6.3% in local currency terms.
India aims to transform itself into a global leader in biotechnology, capitalizing on its rich talent pool and demographic dividends. With initiatives such as the Biotechnology Industry Research Assistance Council (BIRAC) and significant financial investments, the Indian government seeks to boost innovation and economic growth in this sector. The focus is on leveraging biotechnology across various fields, including agriculture, healthcare, and environmental sustainability. However, the path to leadership is fraught with challenges that could impede progress.
A major hurdle to India’s biotech aspirations is its underdeveloped research and development (R&D) infrastructure. Though there has been an increase in funding, much needs to be done to enhance the quality and quantity of R&D outputs. The current infrastructure is often characterized by inadequate facilities and a lack of collaboration between academic institutions and the industry. This gap leads to a disconnect between innovative ideas and their practical application, slowing down the pace of scientific advancements.
Moreover, India’s intellectual property (IP) infrastructure poses significant barriers to biotech growth. The weak enforcement of IP rights often deters investments by foreign companies who fear the risk of intellectual property theft or disputes. Strengthening IP laws and ensuring their effective implementation are essential to attract international collaboration and investment. By addressing these weak links in R&D and IP infrastructure, India can better position itself as a formidable player in the global biotech arena.