August 17, 2021
The Bioeconomy’s contribution to the national GDP in 2020 was at 2.7% , evaluated at US$70.2bn.
By 2025, the contribution of the Indian biotechnology industry in the global market is expected to grow to 19%.
The sector is also forecasted to reach US$ 150 bn by 2025, with a CAGR of 16.4%.
India had over 4,200 biotech start-ups in 2020, about 25% more than in 2019.
Bioeconomy is a fairly recent phenomenon, which includes the production, utilisation and conservation of biological resources, including expertise, science, technology, and innovation, to provide information, products, processes and services across all economic sectors aiming towards a sustainable economy, in which the biotechnology sector plays a pivotal role. The Bioeconomy’s contribution to the national GDP in 2020 was at 2.7% of the GDP, valued at US$70.2bn.
India registered 12.3 percent growth in Bioeconomy compared to the previous year’s figure of $62.5 bn. By 2025, the contribution of the Indian biotechnology industry in the global biotechnology market is expected to grow to 19% from 3% in 2017, and is forecasted to reach US$ 150 bn by 2025, with a CAGR of 16.4%. The Indian biologics market is expected to register a CAGR of 22% from 2019 to 2025 to reach US$ 12 bn by 2025. Bio-services, which accounted for 15% of the biotechnology industry in India, is becoming a leading destination for clinical trials, contract research and manufacturing activities in the country.
Notwithstanding the biggest health crisis faced in the past century, India’s bioeconomy grew over 12% to reach $70.2 bn in 2020. Despite the challenges brought on by the pandemic, the biotech industry was able to develop innovative solutions such as diagnostics, therapies and vaccines both rapidly and on a large scale to save countless lives, by ramping up its research, innovation and manufacturing abilities. Initiatives like Start-up India, Make-in-India, Atmanirbhar Bharat Abhiyan, and Ayushman Bharat along with proper plans and policies will enable the country in realising our aspirational goal of creating a US$150 bn bioeconomy by 2025.
The government, through the Department of Biotechnology (DBT), has made gargantuan efforts in promoting bioscience research, education, and entrepreneurship. Riding on the back of a burgeoning start-up ecosystem, biotech innovation is moving forward in leaps and bounds.
In order to evolve from being the ‘pharmacy to the world’ to the hub of cutting-edge biomedical innovation and research, the Government aims to make strategic investments and provide incentives for production linked schemes, research linked schemes, start-ups and achieving global competitiveness via exports.
Introduced in March 2020, the Production-Linked Incentive (PLI) Schemes were announced to provide companies in specific sectors incentives on incremental sales from products manufactured in domestic units.
India has been a keen manufacturer of generic drugs and is now using this quality to produce specialty drugs, vaccines, and biologics. To achieve global leadership in biologics, we need to enhance the capacity, competency, and infrastructure available in the country. The PLI scheme for this sector has introduced various incentives to promote self-reliance in local manufacturing of bulk drugs, while also encouraging the biopharma industry to move up the value chain through innovation. In order to fulfil the unique needs of the biopharmaceutical industry, the government needs to fine-tune the PLI scheme to give biopharma manufacturing a much-needed boost.
The government’s support has led to the creation of a robust biotech start-up ecosystem. India had over 4,200 biotech start-ups in 2020, about 25% more than in 2019. It needs to create an environment that allows these start-ups to scale up.
Capital being the basic requirement for any start-up, the government should augment Biotechnology Industry Research Assistance Council (BIRAC) funding to `US$ 403.47mn (INR 30bn) annually. Further regulations may need to be introduced to enable biotech and other start-ups to access capital markets.
With the government’s support a robust biotech start-up ecosystem has been developed. Government incentives aim at further boosting the development of such start-ups. In fact, the expansion of bio-tech manufacturing aims to expand not only domestic markets but global ones too, which would require robust policies.
Research-linked incentives can provide the impetus to increase R&D investment.
Introducing a PLI-type scheme to grow capabilities and incentivise clinical trial service providers will restore India’s position as a global clinical studies destination.
Today, the Indian biotech industry comprises over 5,000 companies and is aligned around five major segments: BioPharma, BioAgriculture, BioIndustrial, and combined segment of BioServices comprising of BioIT, CROs, and Research Services.
India’s vision to have 10,000 biotech start-ups by 2024 and be a $150 bn BioEconomy by 2025 seems to be right on track. To achieve this vision in biotech, the country will have to act expeditiously, with the government playing an enabling role by creating a suitable physical, financial, legislative and regulatory infrastructure.